Usually when you purchase a property together, you're carrying out the purchase as 'joint tenants'. This means that both of you own the whole of the purchased property.

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When there is a severance of tenancy, then you both become 'tenants in common'. This means each of you owns a percentage of the property, which is usually 50%. However, you can also define the portions. For example, if both of you purchased the property with disproportionate amounts (let's say 40% and 60% respectively), then your shares in the property can be reflected in the same way.

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Joint Tenancy

In the case of a Joint Tenancy Agreement, both parties own 100% of the property and not a share of the property.

The key characteristic of a Joint Tenancy is the question: what happens to your share in the property if you pass away? By law, your share of the property will pass to the other joint owner automatically.

Irrespective of what your Will says, your share in the property will pass to the other joint owner. The converse also applies.

If joint owners are making uneven contributions to the property, either at the outset or perhaps after the purchase through improvements, then 'tenants in common' will provide a higher degree of protection.

Tenants in Common

If joint owners own the property as Tenants in Common, then each of you will have a defined share in the property, expressed in percentage (%) terms.

If either joint owner passes away, then their shareholding will pass in accordance with the terms of their Will. If the joint owner doesn't have a will, then the shareholding will pass according to the rules of intestacy.

You should be mindful of a potential pitfall associated with Tenants in Common. If you find yourself contributing more to the initial property purchase, then you should ensure you have a Declaration of Trust' in order to safeguard your contributions. If you don't have this in place, then your contribution may be at stake should your relationship ever terminate or you die.

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If you need any support or guidance in knowing what the best option for you is, then contact us and we would be happy to help.