Where a property is owned by more than one person, this is referred to as ‘co-ownership’. There are two types of co-ownership:
joint tenancy
tenancy in common
Joint tenancy
If you own a property as a joint tenant:
Each joint tenant has an equal, indivisible, share in the property
You need the consent of the other joint tenant(s) in order to sell your share in the property
If one of you dies, that person’s share in the property automatically passes to the surviving joint tenant(s), regardless of the provisions of their Will - this is known as the right of survivorship.
This means that if you indicate in your Will that you would like your share in the property to pass to someone other than the surviving joint tenant(s), that provision will be ineffective. Your interest in the property will instead automatically pass to the remaining joint tenant(s) equally.
As the surviving co-owner(s) will be entitled to the property, you don’t need to do anything to transfer your share in the property to them. If there is only one surviving co-owner, that person will own the whole of the property and it will form part of their estate when they die.
Tenancy in common
In contrast, as tenants in common:
You each own a defined share in the property
You do not need the consent of the other tenants in common to sell your share; and
The right of survivorship does not apply – so your share of the property will pass in accordance with the terms of your Will.
You will therefore be able to decide, and specify in your Will, who will receive your share of the property – it will not automatically pass to the other tenant(s) in common.
Irrespective of the type of co-ownership, it is a good idea to record the shares that each of you own in the property using a Declaration of co-ownership. This is a document allowing you to set out how the property is split between you.
Changing ownership before you make your Will
You may decide you would like to change the way in which you co-own a certain property before you make your Will.
One way to get around this is to sever the joint tenancy so that going forward you hold the property as tenants in common. Severing a joint tenancy does not need to be done in writing, but it is best to do so to avoid problems in the future.
When you have severed a joint tenancy, it is important to notify the Land Registry (the public authority responsible for the registration of property and land in England and Wales) of the severance. If you do so, you will have the option of asking the Land Registry to add what is called a ‘restriction’ to the proprietorship register of the property. This prevents a surviving co-owner from selling the property without the consent of your personal representative(s). However, it is important to note that this is an exception. The general rule is that where a property is owned by tenants in common, the consent of the other tenants is not needed in order to sell a share in it.