There are two types of joint ownership. Property co-buying and Joint equity. You can either own the property as ‘joint tenants' or as ‘tenants in common'.

Joint ownership of a house or joint equity means clubbing together or co-buying to share the deposit, joint ownership of the property, mortgage payments and house-hold bills. Or you may already own a house and want to change to joint ownership

When you opt for a joint ownership house or a joint ownership property you will need a joint ownership mortgage and a joint ownership agreement. You will need mortgage advice, so speak to a mortgage advisor who specialises in joint ownership mortgages.

Joint Tenancy and Tenancy in Common

Legally there are two types of joint ownership, joint equity or property co-buying. You can either own the property as ‘joint tenants' or as ‘tenants in common'. Do not be put off by the terminology. It has nothing to do with tenancies and applies to freehold or leasehold land.

 

Joint ownership of a house

Joint ownership, joint equity or property co- buying can be a way onto the property ladder for first time buyers and may enable you to choose the best location to live in for your circumstances.

You may consider going into joint ownership of a house or property with a member of your family, a friend, or someone you might meet through one of the joint ownership schemes.

Benefits of joint house ownership:

  • You get onto the property ladder earlier rather than renting or living at home
  • The deposit is shared between you. You won't need so much for your share.
  • The of buying a property (solicitor's fees, etc) are shared when a property is bought by joint ownership.
  • Monthly mortgage payments are shared so your outgoings are lower.
  • When you sell, if the property prices have increased, you will have a deposit for a house or flat of your own.
  • You share responsibility for the maintenance, repair and redecoration of the property so costs of running the house for you are reduced
  • You share the household bills such as utilities and council tax, again reducing your costs.

Joint house ownership - things you must be careful about

  • You need legal documents, including wills, to protect your investment, which means additional costs alongside the usual house-purchase costs
  • One or more of you may wish to sell before the other(s) are ready to move on and you may have to make alternative arrangements (such as finding a tenant) in order to pay the mortgage
  • Everyone is responsible for the mortgage, so if one person defaults, the other joint owners have to cover the additional cost.
  • The process can be bureaucratic and you will need records to keep track of payments, outgoings and a clear agreement of how costs are to be shared right from the outset.

Legal Framework for Joint ownership

Joint tenancy

Under this agreement the joint owners together own the whole property and do not have a particular share in it. If one of the owners dies the other automatically becomes the sole owner. This would be the case even if a will had been made leaving the deceased owner's ‘share' to someone other than the co-owner.

Tenancy in common

This is the opposite of joint tenancy in that the tenants in common each have a definite share in the property. For example A and B could own the property in equal shares, or A could own one fifth with B owning four fifths. This would be the most appropriate agreement where people want to own a property in separate pre-determined shares.

Under this form of ownership if one of the owners dies, his share of the property will pass on to whoever he specifies in a will, or if a will is not made, in accordance with the rules of intestacy (someone dying without leaving a will). If you are planning to make a will (and it would be wise to do so) you should have it drawn up before you sign the transfer deed that passes the legal ownership of the property to you. This way you will save the time, money and inconvenience of having to change your will.

Which form of joint ownership should you opt for?

This depends upon personal choice and your particular circumstances.

The joint tenancy is most commonly adopted between married couples where there is perceived to be no advantage in defining separate shares in the property and where it would be the intention that on the first death the property would automatically pass to the surviving spouse.

Aa tenancy in common will often be used between brothers and sisters, parents and children, unmarried couples and friends. Specific shares in the property can be identified and for each owner to be able to leave his or her share in the property to a named person other than the owner.