Tenants in common

What is tenancy in common?

Properties owned by up to four people can be owned by ‘tenants in common’ - this is when each co-owner owns a distinct share of the property.

This type of ownership is usually used by friends, family or business partners who want to buy together.

As tenants in common, you’ll typically own 50% of the property each but it’s also possible for you to have unequal shares.

If you die, you can leave your individual share of the property to anyone you’ve chosen who’s named as a beneficiary in your will.

What's the difference between tenancy in common and joint tenancy?

While these types of buying arrangements are similar, there are differences and what will suit your situation will depend on your own circumstances and needs.

Joint tenancy

Buying as a joint tenancy means you own the property equally with whoever you’re buying it with. Both owners will have to agree to selling the property and the proceeds will be split between them equally. If one tenant dies their share will automatically pass to the other owner. It’s the option usually chosen by married couples and people in civil partnerships.

Tenancy in common

If there are up to four of you, you can buy a property as tenants in common, this makes it a popular choice for friends and family who want to buy together. You don’t have to have equal shares in the property, but all joint owners have equal rights to live there. And you can choose to leave your share when you die to anyone you wish by stating this in your will.

Although you may be able to change the way you own your property later on making the right ownership decision from the start will avoid additional costs and difficulties.

What happens if one of the tenants in common dies?

If you own a property as tenants in common and one of you dies, that person’s share won’t automatically go to you or the other joint owners.

Instead, it will be passed on according to the wishes that person set out in their will. If they don’t have a will, their share of the property will be distributed in line with intestacy laws.

This makes owning as tenants in common ideal for people who want to co-own with someone but have children from a previous relationship who they want to inherit their share.

Can I change from tenants in common to joint tenancy?

Yes, you can. This is called a notice of severance, but to do this you’ll need the other joint owners to agree.

You’ll need to fill in a form called a trust deed - you might want to use a legal professional to help you do this. And if you had a trust deed already, you’ll need to update it.

Your property’s title deed may have had a restriction when you applied for a tenancy in common. For example, not allowing you to sell the property unless certain conditions are met. If this is the case, you’ll also need to complete a form to cancel this restriction.

To change from tenants in common to a joint tenancy you’ll need to send both of these forms and any other paperwork required to HM Land Registry. There is no fee for this.

Do I need a declaration of trust?

Although it isn’t required by law, it’s a good idea to have one so that everyone knows what will happen if the property is sold or if someone wants to sell their share in the future.

It’s best to have a declaration of trust drawn up at the same time you complete the purchase of your property.

Also known as a deed of trust, this legal agreement sets out:

• When and how the property can be sold
• How much money each owner has put into the property
• How much each owner is required to pay towards the mortgage
• How much notice each owner has to give if they want to end the arrangement
• Whether one or more of you has first right of refusal to buy the share of the owner that wants to leave
• How the money from the sale should be divided up