Jointly owned property – what’s mine is yours?

It’s all too easy to buy a home together when a relationship’s going well and duck the tricky question of who owns what share. No one wants to talk about splitting up!

But what you’re entitled to often depends on:

  • what you agreed at the outset; and
  • whether you recorded your agreement in a legally binding way.

What are the options for joint owners?

The two options for joint ownership are joint tenants or tenants in common. But that’s confusing because they have nothing to do with tenants and tenancies!

They should really be described as either:

  • Equal ownership (joint tenants)

    Think of an orange with the skin on. There is only one orange, the owners own it equally. If they fall out they are each is entitled to half of it, regardless of who contributed what initially; or

  • Declared ownership (tenants in common)

    Peel the skin off the orange and declare how many segments each owner has. If they fall out their shares are as agreed and the agreement will usually be recorded in a declaration of trust.

Does the type of relationship make any difference?

Yes!

If co-owners are married, they will usually deal with any property disputes in a divorce. A family court will decide how to split property and doesn’t have to follow what was agreed.

Where co-owners are unmarried, or in another family or business relationship, any property dispute usually involves trust law. Those disputes are expensive, complex and sometimes with unexpected results. A dispute could be avoided by clearly recording the agreement at the outset.

Why is this important?

A property is likely to be the most valuable asset you will ever own. If you are buying that property with someone else, you both need to protect yourselves.

This is especially important where co-owners aren’t married.

How can we help?

Our residential property team have the expertise to explain the options and guide you as to what might be best eg. whether you need a declaration of trust, a Will, inheritance tax advice or a cohabitation agreement.

For more information contact us to speak with one of our property experts.