Owning property in joint names – what you should know

When buying property with someone to whom you’re not married or in a civil partnership with, it’s sensible to consider how the proceeds of the property sale should be divided should one of you die or you separate.

If you are not married or in a civil partnership, then there is little statutory protection for you in the event of the breakdown of your relationship. In dividing your interest in a property that you own together, cohabitants are entirely reliant on the existing principles of land and trust law to determine any dispute as to ownership of property. It is therefore extremely important for co-owners to record how they own the property that they share, ideally in the form of a deed or a declaration of trust.

Co-owners should remember that it is a common misconception that by virtue of living together for a specific period of time you become entitled to the same financial provisions as if you were married or in a civil partnership.

When buying a property, co-owners are given a choice as to how they own the house, whether this is as “joint tenants” or “tenants-in-common”. When considering whether you want to own a property as joint tenants or as tenants-in-common you need to decide how you would want the proceeds of sale of the property to be divided in the event that you separate. If the answer is that you want there to be an equal division, regardless of who paid for what at the outset or during the relationship in terms of the outgoings on the property (such as mortgage payments), then owning the property as joint tenants would achieve this.

Owning the property as joint tenants also means that if one of you were to die before the other, then the survivor would inherit the deceased’s interest in the property automatically, regardless of what their will said.

If you want the proceeds of the sale to be divided unequally (or equally but you did not want your cohabitee to inherit your interest in the property when you die), then the property would need to be owned by you as tenants-in-common. If this were the case, you would need to set out in an appropriate deed whether that ownership is in equal shares or in unequal shares. When the property is sold, the net proceeds of the sale will be divided accordingly.

Jonathan is an associate, chartered legal executive in our divorce & family law team. He advises clients in connection with all family and divorce matters, including divorce and separation, nullity, civil partnerships, children, pre-nuptial/civil partnership and post-nuptial/civil partnership agreements, cohabitation and financial issues arising ancillary to separation and divorce. Jonathan is a member of Resolution (a specialist body committed to non-confrontational divorce, separation and other family problems) and is noted for his expertise in national legal guide, The Legal 500.