Joint Ownership of Property

What is involved?

When two or more people buy a property together, the type of joint ownership they choose will affect how a future sale is dealt with. If the property is sold, mortgages and charges have to be repaid, alongside any Estate Agent and Solicitors fees on the sale. Only the balance (or “equity”) can be divided between you.

Unless you contribute equally to the initial equity and mortgage, the person who paid most may wish to ensure they receive a larger share of the remaining equity if the property is sold. If so, you must tell us before your purchase to ensure you receive the right advice, and possibly enter a declaration of trust. Doing this avoids an equity division that you did not intend, if there is a divorce, dispute or death.

Why choose Freeths?

• Our experienced Residential Property team will explain everything clearly in plain English
• You can rely on us to answer your questions honestly and to be upfront about any risks
• We can advise you on the tax implications of joint ownership or the transaction itself

Call our friendly Residential Property lawyers now to find out how we can help you.

If you hold as joint tenants, the result is that if one of you died the survivor would then be entitled to the whole of the equity automatically.

Alternatively, you can be tenants in common – you each have your own share of the equity that you can leave in your Will.

Entering into a declaration of trust is especially important for unmarried couples. It is worth including who is responsible for the mortgage, utility bills and insurance. Also, consider what would happen if there was a change in circumstances: if one of you could buy the other out, or if the property declines in value and falls into negative equity. If you are contributing more, get independent legal advice.

If a third party, such as a parent, contributes money on behalf of one of the co-buyers, they should also obtain legal advice. We strongly recommend that the deed protects each person’s financial situation and interests.