The Differences Between Joint Tenants and Tenants in Common

A happy couple inside their home

Buying a house is always an incredibly exciting step in anyone’s life. It’s such a defining moment and arguably one of, if not the biggest purchase you’ll ever make.

So, without adding too much pressure to your decision, one of the most important elements of buying a house with another person is deciding exactly how you should buy your property. 

The two main options you for buying a house with another person are either a joint tenant agreement or a tenants in common agreement. While these two options may sound incredibly similar in name, they’re actually quite different when it comes to property ownership.

Let’s take a look at the difference between joint tenants and tenants in common in the UK.

Joint tenants vs tenants in common

The concept of joint tenants is a fairly easy one to understand as it involves owning a property with someone else in equal partnership; you will both own the same ‘amount’ of the property so you’ll have equal rights over it.

Tenants in common is slightly different to joint tenants in that it’s possible that each tenant might have a different ownership share in the property. This option is usually more suitable if you’re not buying the property with someone you have a close relationship with, unlike joint tenants who are typically people in a relationship or are close relatives.

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Advantages and disadvantages of joint tenancy

Now that we’ve established the basics of the differences between tenants in common and joint tenants, let’s take a look at the advantages and disadvantages of both.

It’s important to bear in mind that the advantages and disadvantages of both tenants in common and joint tenants aren’t always set in stone; some things might be deemed as a positive by some individuals, whereas others may disagree.

Pros of joint tenancy

  • There are usually less legal fees involved in the setting up of a joint tenancy, as fewer documents are required because both parties have equal partnership and interest in the property.
  • In the event that one person dies, the property automatically passes to their surviving tenant, which is often much more desirable for people than the situation with tenants in common.

Cons of joint tenancy

  • Similarly to tenancy in common, if one person wants to sell the property, then both parties must agree to the sale in order for it to go ahead. This can sometimes be quite a predicament to be in, especially if the sale is related to other legal proceedings such as a divorce.
  • There is no official joint tenancy agreement put in place, which is good on the one hand because it reduces the need for hassle and paperwork, but it also means that it doesn’t allow for any variation of unequal ownership. This can sometimes prove to be somewhat of an issue if one person pays for 85% of the costs of the property, for example, but they will still actually only own 50% of the property.

Advantages and disadvantages of tenants in common

Similarly to the pros and cons of joint tenants, the positive and negative aspects of tenants in common must also be carefully considered when deciding which option is best for you.

Pros of tenancy in common

  • Even though you might only own 25% of the property, for example, that doesn’t mean to say that your rights to the property are limited; you still have rights to access all the property.
  • You can sell your share of the property to anyone; there are no rules in place to prevent sales. However, this could also be seen as a negative if one person isn’t happy with whom the other person has sold their share of the property to.
  • There are no rules in place about the size of ownership when it comes to tenancy in common, so you can work it out between you and the person you’re purchasing the property with.

Cons of tenancy in common

  • While it’s not strictly a legal requirement, you should draw up a deed of trust as part of the tenants in common agreement between you and your respective tenant. This is in case your relationship breaks down and you need a plan in place to determine the financial responsibilities of each person.
  • If one person wishes to sell the property, you need to have permission from both parties in order to complete the sale which can sometimes make it a little tricky if only one person wants to sell.
  • If one of the tenants in common dies, their share of the property doesn’t automatically pass to the other person in the partnership.

What happens when one of the tenants in common dies?

Unfortunately, with a tenants in common arrangement, the full ownership of the property isn’t automatically assumed by the surviving tenant in the event of the other person’s death.

Their share of the property will be passed on to their estate, which will be sorted out in accordance with the deceased’s will.

Learn more: How to Write and Make a Will in the UK

Does a will override joint tenancy?

A will doesn’t override joint tenancy; when a person in a joint tenancy passes away, their part of the property agreement automatically passes on to the surviving person.

Should I get a will?

Having said that, it is still highly important to write a will as you will need to state how you want the assets in your estate to be distributed. This helps make sure that your belongings and money etc is passed on to the right person/people in the event of your death, such as possessions, antiques and investments.

Does tenants in common affect mortgages?

You can still get a mortgage with a tenants in common agreement, but you must be aware of all the financial responsibilities and potential complications that could come with it.

It is also important to consider other protection like home insurance and life insurance, to make sure your family are protected in the event of something happening to your property or in the event that you pass away.

Does joint tenancy and tenants in common affect credit score?

As you are essentially creating a financial affiliation with another person, and if one person has a worse credit score than the other, then it might be a better idea to get a mortgage in the name of the person with the better credit history.

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