Veitch Penny LLP - Exeter | Crediton, Devon

English law recognises two ways in which two or more people can own and hold property jointly.  These are known as "joint tenancy" or "tenancy in common".  There are important differences between these two concepts, and all joint owners must decide which of the two alternatives is appropriate to them.
Joint Tenancy
Under a joint tenancy each owner will have an equal share in the property, and upon the death of one of them his or her share will automatically pass to the other or others.  This rule will still apply even if the deceased made a Will and purported to leave his or her share to someone else.

Tenancy in Common
Under a tenancy in common, co-owners can have either an equal share or an unequal share in the property (eg 60% to A, 40% to B).   The share of any deceased owner does not automatically pass to the survivor but will be dealt with under the terms of his or her Will or the intestacy provisions if there is no Will.

Which should we choose?
Most husbands and wives will opt for a joint tenancy because they would want the survivor of them to inherit the property automatically on the death of the first of them to die.  However, this general rule does not always apply and in the following circumstances, husbands and wives should consider whether a tenancy in common is more appropriate:

(1)    if they have substantial joint assets, in which case significant inheritance tax savings can be made by the preparation of a suitable Will coupled with a tenancy in common;

(2)    if either the husband or wife has been previously married and has children from that former marriage who are intended to benefit on their parents death.

Joint owners will normally opt for a tenancy in common if they are unrelated, (but very often a couple who purchase before marriage but with the intention of marriage or a permanent relationship will chose a joint tenancy).

Tenancy in common is also appropriate when :

(1)    the property is held as a business asset;

(2)    contributions to the purchase price, or payments of the mortgage, are made in unequal shares and the owners wish to reflect this in their joint ownership.

When co-owners decide to hold property as tenants in common, it is often sensible to set out their intentions in a separate deed known as a Declaration of Trust, particularly if the agreement between them as to ownership is complicated.