Buying a Property Jointly

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With a home being the biggest investment many of us make in our lifetimes, buying a property on your own can be virtually impossible. More and more people are buying a property jointly, either as a couple or with friends and family joining in.  It can be a great solution to getting on the property ladder, but buyers should take a sensible approach before committing to this big decision.

Unmarried couples buying a property jointly

If an unmarried couple buy a property (the rules for married couples are essentially different) they do not have the same protection as married couples or those in a civil partnership because their relationship is not recognised by law. In the event of a relationship breakdown, they could end up paying thousands in legal fees.  You need to give some thought to protecting your investment, particularly if both of you are contributing unequal amounts to the purchase price. Stop and think – do you want to be able to get your money back if you split up?

Buying a property with a friend or family

The thought of buying a property with your friend or family member is a great idea. You do not have to be married or in a relationship to buy a house together. Although the principals of owning a home are similar and the main benefit is that it gets both of you onto the property ladder. You would still need to decide on how you want to own the property either as joint tenants or tenants in common.  A lot of unmarried couples tend to hold the property as tenants in common. This is where each person’s share of the property is defined at the outset in equal or unequal shares.

Co-owned property and separating couples

What happens if, as a couple, you go your separate ways and one of you wants to stay in the property but the other wants to sell his or her share in it?

This depends on several different factors, for example did you buy it in joint names?  Do you both agree what would happen to the property should it be sold – does one of you stay or go? Can mortgage payments be kept up to date?

The ending of a cohabiting relationship can be stressful. Separating couples who cannot agree what will happen to the property could be left with an application to the court to try and resolve any disputes. To avoid this and the costly legal fees, you should try and come to an agreement before going to court – and even better if you can agree before buying the property what you both expect if things do go wrong within the relationship.

Jointly owned property and the death of one of the owners

You should also consider what happens in the worst case scenario – what if after buying a property jointly, one of the owners dies? When more than one person buys a property there are different ways in which it can be owned known as Joint Tenants or Tenants in Common.

Joint Tenants

If you both owned the property as joint tenants, on the death of the co-owner the property automatically passes to the surviving individual. If at the time of death, you were joint mortgage holders then the surviving individual inherits the property and the mortgage. The liability rests with the surviving individual to keep up with any mortgage repayments.

Tenants in Common

On the death of one of you, your share in the property would pass in accordance with your Will or if you had no Will to your next of kin under the intestacy rules.  Further, a restriction will normally be registered on the title register and you can specify the shares in which the sale proceeds are to be divided between you. This method is preferable if one of you is investing substantially more money in the property than the other.

Here to help

If you are planning on buying a property jointly, Uzma Saleem, in our Residential Property team will be able to guide you through the best process to protect yourself and your property.

Please note the contents of this article are given for information only and must not be relied upon. Legal advice should always be sought in relation to specific circumstances.