Joint Tenants v Tenants in Common | which is better for you?

Buying a property with someone else is a big decision, whether you're married, in a partnership, or just good friends. One of the first things you'll need to decide is whether to be Joint Tenants or Tenants in Common. These are two different ways to own property and choosing the ‘wrong’ one for your circumstances can have big consequences down the road.

The main difference between Joint Tenants and Tenants in Common is how you split up the property if you decide to sell or if one of you passes away.

Joint Tenants: 

As a Joint Tenant, you and your co-owner each own an equal share of the property. This means if you sell the house, the money goes to both of you equally, no matter who put in more money upfront. And if one of you dies, the other automatically gets their share of the property.

One way to look at it is that you both own all of it, so the default position if you separate is to slice it down the middle. Upon death, it is an asset that moves horizontally from one person to the other.

Tenants in Common:

Being a Tenant in Common is different. If you invest different amounts when buying the property, you should have some kind of agreement to clearly state how much of the property each person owns. So, when you sell, you'll get back your percentage of the money. And if someone dies, their share can be left to whoever they choose in their will, not just the other co-owner.
The way you can look at this is that you both own a proportion of it, and unless that proportion is specified, then the assumption will be 50/50. Unlike Joint Tenants, upon death property would move vertically; down into the estate, rather than horizontally to the other partner.

What you need to remember:

Joint Tenants: 

Equal shares, automatically pass to surviving tenant if one dies, can't leave your share to anyone in your will.

Tenants in Common:

Can have different share sizes, can leave your share to anyone in your will, share automatically goes to surviving tenant if no other arrangements are made.

Which one is right for you depends on your relationship and your plans for the future. Think about how you want to split the costs and the proceeds if you sell, and what would happen if one of you were to die.

Are you ready to buy a property with someone else? We can help you understand the pros and cons of being Joint Tenants or Tenants in Common and find the option that's right for your situation. Also be sure to contact our family team, as you may benefit from a Cohabitation Agreement.

Contact our team today to help guide you through the next step of your property purchasing journey: 01926 491181 or email: quotations@moore-tibbits.co.uk.