If you’re buying a property with someone else, you will need to decide which type of joint ownership is right for you. When you own a property jointly, you can either own it as joint tenants or as tenants in common.
Which option will be best for you will depend on your circumstances. The different options give you the chance to protect your interests and ensure that your share of your property will be used in the way that you wish.
If you choose to own the property as joint tenants, then you both own the whole property together. Neither of you will own a specific share. This means that when you sell, you are each entitled to half of the proceeds. Should one of you die, the other automatically owns the whole property.
Ownership as a joint tenant means that you cannot leave your share of the property to someone else in your Will. Problems may arise with this type of ownership in later life. For example, you can’t leave your share of your home to your children.
While the other owner may intend to leave the whole property to your children when the time comes, there is no guarantee that this will happen. They might remarry, with the property going to their new spouse. They could also lose the value of the property in an unsound investment or be required to use it to pay care home fees.
Tenants in common
When property is owned as tenants in common, each party owns a specified share outright. This could be 50%, but it can also be any other division that you agree upon. For example, if one party paid the deposit from their own funds then you could agree that their share will be 75%.
On the sale of the property, the net sale proceeds will be divided according to the agreed split, which is generally set out in a Deed of Trust or Declaration of Trust at the time the property is bought.
If you own a property as tenants in common, you can leave your share in your Will to your choice of beneficiary.
How to choose between joint tenants and tenants in common
If you are happy for your share of the property to ultimately pass to your co-owner, then a joint tenancy might be the right choice.
However, if you are making unequal contributions towards the purchase price, a tenancy in common could protect your interest. It also gives you the opportunity to ensure that your share of the property is passed on to your loved ones after you die.
You can leave it in your Will, but also give your co-owner a life interest in your share, meaning they will be able to stay in the home for as long as they wish. Once they no longer need the property and it is sold, your interest would be passed on in accordance with the terms of your Will.
It is always advisable to have a Will in place to let your loved ones know how you wish your estate to be shared after your death. However, if you will be owning a property as tenants in common, it is particularly important to make a Will.
Our experienced property and Wills advocates can discuss your situation with you and advise you on the best method of property ownership. We can answer any questions you may have and ensure that the right documentation is in place to protect your assets for future generations.
Contact our Isle of Man conveyancing team
If you are thinking of buying a property on the Isle of Man and you would like one of our experienced Isle of Man conveyancing advocates to represent you, we will be happy to hear from you. To speak to one of our expert Isle of Man property advocates, ring us on 01624 665522 or email us: firstname.lastname@example.org.
Kathryn is the Head of Property at Quinn Legal
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