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Joint Tenants and Tenants In Common – What is the difference? 

Exploring Property Co-Ownership: Beneficial Joint Tenants vs. Tenants in Common

In the process of purchasing a property in collaboration with another person, it's essential to deliberate on your preferred legal arrangement for shared ownership. Your choices encompass holding the property as Joint Tenants or as Tenants in Common. Grasping the contrast between these alternatives holds utmost significance, given that each option bears distinct implications for the future.

What Are Joint Tenants?

If you elect to hold the property as Beneficial Joint Tenants this means that all the owners of the Property will hold the equity in the property together in equal shares, as a single entity. This arrangement ensures that all co-owners share the equity of the property equally, creating a unified ownership entity. When opting for Beneficial Joint Tenancy, the proceeds from the eventual sale of the property are divided equally among the owners after settling any outstanding mortgages, fees, and charges.

If one owner passes away, the surviving owner or owners will hold the whole of the equity in the property in equal shares. If only one owner remains, they will automatically assume full ownership of the property's equity. It's important to note that an individual's share in a Joint Tenancy property doesn't become part of their estate for inheritance purposes. Unless the sole owner status is achieved prior to their passing, they cannot bequeath their share through their Will.

NOTE: you can change from Joint Tenants to Tenants in Common at anytime by serving a Notice of Severance on the other owner or by agreeing to jointly serve the tenancy. 

What Are Tenants In Common?

Joint ownership as Tenants in Common entails that while property ownership is shared, each proprietor possesses a distinct portion of the property's value. Frequently, each individual's stake is equal (for instance, if there are 2 owners – 50% each), although it is feasible for ownership to be divided unevenly, like 90%-10%, 60%-40%, or any other ratio agreed upon by the proprietors.

Under the Tenants in Common arrangement, upon selling the property and finalising all financial obligations including mortgages, agency fees, and legal costs, each owner will receive their predetermined share of the net proceeds from the sale.

In the event of the passing of one owner, unlike the scenario with Beneficial Joint Tenants, the deceased owner's share doesn't automatically transfer to the surviving owners. Instead, the deceased owner's share becomes an asset that will be addressed either through a Will or according to Intestacy Rules if there is no Will.

How Should I Hold The Property?

Most married couples hold the Property as Beneficial Joint Tenants.

Tenants in Common is usually an option used when:

  • there is an unequal financial contribution made towards the purchase of the property

  • the buyers may agree to hold as tenants in common in proportions which reflect the amounts that each buyer has contributed towards the deposit

  • buyers with business considerations – the buyers may wish for one owner to own the majority share of the equity in the property

  • buyers with personal circumstance considerations for example where a buyer’s share needs to remain an asset to be distributed in accordance with that buyer’s Will due to the existence of children from a previous relationship. 

If you would like some more information about Joint Tenants and Tenants in Common or a Declaration of Trust, please get in touch with our Residential Conveyancing team on 01685 373721 or email to discuss.



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