Joint tenancy or tenancy in common?

Our lawyer Fiona McNulty answers your questions
Question: I am 29 and keen to get on the property ladder before I am 30. I am thinking of buying a flat with a colleague, two thirds owned by me and one third by him. I expect we will "cash in" and go our separate ways after about five years. What's the difference between a joint tenancy and tenancy in common, and what can we do now to make it easier when we come to sell?

Answer: Joint tenancy is where each party owns the whole of the property and when one dies the deceased's share passes automatically to the survivor. If the property is sold during the lifetime of the joint owners, the proceeds are usually divided equally, although this can alter if there is a divorce, or in the case of court proceedings regarding long-term cohabitees.

It would be advisable for you to be tenants in common in unequal shares, as you would each then own a separate and distinct share of the property. When one of you dies, his or her share passes to the person named in the deceased's will, or if there is no will, under the rules of intestacy it goes to the next of kin. If you sell the property during your lifetimes the net proceeds will be divided according to your shares in the property.

Instruct your solicitor to draft a declaration of trust confirming your shares and the terms of your agreement, which should cover matters such as responsibility for any mortgage payments, insurance, general outgoings, when you will sell, the right to an option to buy the other's share before marketing the flat, etc. You should each seek independent legal advice to protect your interests.

These answers can only be a very brief commentary on the issues raised and should not be relied on as legal advice. No liability is accepted for such reliance. If you have similar issues, you should obtain advice from a solicitor.

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If you have a question for Fiona McNulty, email legalsolutions@standard.co.uk. We regret that questions cannot be answered individually.

Fiona is a partner in the residential real estate team at Thring LLP (www.thrings.com).

These answers can only be a very brief commentary on the issues raised and should not be relied on as legal advice. No liability is accepted for such reliance. If you have similar issues, you should obtain advice from a solicitor.

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