{"id":2982,"date":"2022-03-01T19:35:53","date_gmt":"2022-03-01T19:35:53","guid":{"rendered":"https:\/\/www.yopa.co.uk\/homeowners-hub\/?p=2982"},"modified":"2022-03-01T19:35:53","modified_gmt":"2022-03-01T19:35:53","slug":"if-you-are-a-co-owner-of-a-property-what-are-your-rights","status":"publish","type":"post","link":"https:\/\/dy36-2.stage.yopa-dev.co.uk\/homeowners-hub\/if-you-are-a-co-owner-of-a-property-what-are-your-rights\/","title":{"rendered":"If you are a co-owner of a property, what are your rights?"},"content":{"rendered":"\n

Given the soaring\ncost of house prices in the UK today, which hit an average of \u00a3275,000<\/a> in December 2021, it makes sense that\nyou would split the cost of a property with someone else. Going in on a new\nhome with a spouse, family member or friend \u2013 particularly if you are going to\nbe living in the property together \u2013 is a savvy way to take that first step on\nthe property ladder. Indeed, according to Halifax,<\/a> the UK’s largest mortgage provider, the current\naverage age of first-time buyers in the UK is thirty-two, with an average\ndeposit of \u00a353,935 for a property costing around \u00a3264,140. This is a whopping\nseven times the average salary of a first-time buyer and just not an affordable\noption for many. <\/p>\n\n\n\n

In addition to\nbuying with someone else, you may also become the co-owner of a property if it\nhas been gifted to you, or you inherit it via the will of a family member or\nfriend. <\/p>\n\n\n\n

So, whether you\nbuy, are gifted or inherit a property with someone else, what are your rights? <\/p>\n\n\n\n

Below we run\nthrough the different ways you can co-own a property (based primarily on a\n50-50 split) and what these options mean in terms of your rights to the\nproperty, what you can do with it and what happens when you decide to sell. <\/p>\n\n\n\n

What are the\ndifferent types of property ownership for co-owners?<\/strong><\/h3>\n\n\n\n

When you buy a\nhome with someone else, you can register with the Land Registry<\/a> as either \u2018joint tenants\u2019 or \u2018tenants\nin common\u2019. In Scotland, property is registered with the Registers\nof Scotland<\/a> and in Northern\nIreland the Land and Property Services<\/a>.<\/p>\n\n\n\n

The type of\nownership you choose affects what you can do with the property if your\nrelationship with a co-owner breaks down, or they pass away, so make sure you\nconsider all of your options and potential eventualities beforehand.<\/p>\n\n\n\n

Joint\ntenants<\/strong><\/p>\n\n\n\n

Registering\nyourselves as \u2018joint tenants\u2019 \u2013 which is also referred to as \u2018beneficial joint\ntenants\u2019 \u2013 means that you have equal rights to the entire property. If one\nowner dies, the other owner is automatically granted full ownership of the\nproperty and a percentage of the property cannot be left to someone else in the\ndiseased party\u2019s will. As such, this type of ownership is the best option for\nmarried couples or life partners rather than friends buying a home together. <\/p>\n\n\n\n

Tenants in\ncommon<\/strong><\/p>\n\n\n\n

If you register\nthe property ownership as \u2018tenants in common\u2019, this means you can own different\npercentage shares of the property (useful if one of your stumps up more cash)\nand if one owner dies, ownership does not automatically default to the other\nowner (or owners). As such, you can also leave your share of the property to\nsomeone else in your will. <\/p>\n\n\n\n

Tenants in\ncommon is generally the best way to register a property you buy with a friend\nor family member rather than a spouse to give you more flexibility. <\/p>\n\n\n\n

If a change in\ncircumstances \u2013 such as a divorce \u2013 means that you wish to change your\nownership arrangements from joint tenants to tenants in common<\/a> (or vice versa<\/a>) this can be done so free of charge by\napplying to the Land Registry. <\/p>\n\n\n\n

If you own a\nproperty on your own and you wish to transfer ownership<\/a> to someone else so that you are joint\ntenants or tenants in common (such as a new partner who now lives in the\nproperty with you and contributes to the household) this is also possible.<\/p>\n\n\n\n

If you are\nunsure about exactly the type of property ownership you or someone else has,\nthe title deeds for the property will display this information. If you do not\nhave the title deeds to hand, then you can purchase the title register<\/a> for any registered property from the\nLand Registry. <\/p>\n\n\n\n

For properties\nwhich have not been registered with the Land Registry and there are no title\ndeeds available, our guide \u201cCan you sell a house without the deeds?<\/em><\/a>\u201d explains how to track down proof of\nownership. This could be the case for properties inherited from an elderly\nrelative for instance.<\/p>\n\n\n\n

Inheriting a\nproperty, or becoming a property trustee <\/strong><\/h3>\n\n\n\n

When you\njointly inherit a property in someone\u2019s will or it is gifted to you, you need\nto register it with the Land Registry in the usual way. <\/p>\n\n\n\n

There are also\ninstances where you may be asked to become a property trustee, which brings\nwith it certain rights and responsibilities when it comes to managing a home. <\/p>\n\n\n\n

If you are\nappointed as a trustee of a property by the\nperson who puts the property into the trust (the \u2018Settlor\u2019 or \u2018Granter\u2019 in\nScotland) this means that you must manage the property on behalf of the\nbeneficiary who is generally too young to manage their own affairs, an older\nperson requiring the provision of long-term care, or someone who does not have\nthe physical and\/or mental capacity to manage their own affairs.<\/p>\n\n\n\n

As trustee you\nrights in terms of the property and what you can do with it only extend to acting\nin the best interests of the beneficiary and these rights will be included in\nthe trust agreement. You are not able to benefit personally, financially or\notherwise, from the trust unless this is explicitly agreed in the trust\nagreement.<\/p>\n\n\n\n

More\ninformation on the different types of trust and their implications for trustees\nand beneficiaries can be found on the Government website here: https:\/\/www.gov.uk\/trusts-taxes\/types-of-trust<\/a>  <\/p>\n\n\n\n

For properties\ninherited directly or as a beneficiary of a trust<\/a>\nit is important to know that you are likely to be subject to tax<\/a>. In this case, inheritance tax and capital gains tax. <\/p>\n\n\n\n

What happens\nwhen one or both co-owners want to sell the property? <\/strong><\/h3>\n\n\n\n

If you both\nwant to sell, great, you would sell the property in the normal way and split\nthe proceeds according to the percentage of the property you own. <\/p>\n\n\n\n

If one of you\nwants to sell the property and the other doesn\u2019t this can be trickier,\ndepending on the individual circumstances and whether the owner who doesn\u2019t\nwant to sell can afford to buy out the owner who does. <\/p>\n\n\n\n

If you and your\nco-owners are tenants in common and each own a separate share of the property,\nthen you can pursue a sale by applying for an order for sale<\/a> from the court. If you are joint\ntenants then you will need to switch ownership<\/a> from a joint tenancy to tenants in\ncommon before you can apply for the order for sale. This is known as \u2018severance\nof joint tenancy\u2019.<\/p>\n\n\n\n

Regardless of\nwhich option you choose to push the sale through then you will need to seek\nlegal advice. Particularly if you are selling the property with the intention\nto divorce and need to assess all joint assets and consider custody and child\nwelfare arrangements. <\/p>\n\n\n\n

In instances\nwhere you wish to sell but the other owner no longer has the mental capacity to\nmake this decision you will need to apply to the Court of Protection<\/a> to proceed if there is no Power of\nAttorney in place.<\/p>\n\n\n\n

Remember to\nkeep your mortgage lender in the loop and speak to a broker about the best way\nto proceed if you have taken out a joint mortgage with your co-owner. There may\nbe early repayment fees depending on when you bought the property, and they\nwill also be able to provide information on mortgage options if one owner is\nbuying the other owner out of the property. <\/p>\n\n\n\n

Are there\nalternative options for parents wanting to help their children get onto the\nproperty ladder without purchasing a property together?<\/strong><\/h3>\n\n\n\n

If you want to\nhelp your children get onto the property ladder but you don\u2019t want to purchase\nthe property with them as joint owners there are other options.<\/p>\n\n\n\n

Namely:<\/p>\n\n\n\n