Buying a property with someone else is a major milestone – and one that can be pretty stressful too. When you’re buying with a friend or partner, things get a bit more complicated. It’s important to understand the legal terms and legal implications involved in buying property together, as these can significantly affect your rights and responsibilities. In the UK, and in many other places, you’ve got two main options to choose from: Joint Tenancy and Tenancy in Common. And we happen to know the difference as we provide end of tenancy cleaning services in London that we often deliver to people having one of those 2 types of tenancies. And getting this right is so important – especially for first time buyers who are just getting into the property market. If you don’t get it right, it can make a big difference down the line.

The main differences between joint tenancy and tenancy in common are all to do with inheritance, control and financial risk. If you want to know the essentials of making this choice, then this guide has got you covered – even if it’s your first time buying a property. Understanding the legal terms and legal implications of different ownership structures is crucial during a property purchase.

In the end, the right choice for you will depend on your own individual situation and what you’re hoping to get out of property ownership. Choosing the right ownership structure can also help you get onto the property ladder more effectively, especially if you’re pooling resources with others.

Joint Tenancy: A partnership that’s all about equal rights

Joint tenancy is often the way to go for long-term couples or friends. When you’re joint tenants, you both have an equal say in the property—joint tenants means each owner has equal ownership, holding equal shares in the entire property, with no one owning a specific part. You’re both jointly and severally responsible for the mortgage payments and any upkeep on the place.

Some key things to think about:

• Every joint tenant has the same share, so you’re both equal owners with equal shares and full rights to the entire property. Joint tenants means each co-owner has equal rights to the whole property, not just a portion.
• The right of survivorship is a big deal. If one spouse or joint tenant dies, the property will automatically pass to the surviving owners (the surviving joint tenant), regardless of what’s in the will. This means the surviving joint tenant receives the entire property without the need for probate.
• If one person can’t pay their share of the mortgage, the other person will still be responsible for paying the whole thing.
• You need to take title at the same time, using the same legal document.

Joint tenancy is commonly chosen by married couples for its simplicity in inheritance and is often preferred due to its straightforward inheritance rules. This arrangement can include up to four owners, and all owners must agree to sell or refinance the property; one party cannot act independently. Joint tenancy requires equal shares and joint control, while tenancy in common (TIC) offers individual control over shares.

Joint Mortgages – Are you ready for the commitment?

Before you even think about getting a mortgage, you need to think about the financial risks you’re taking on. Lenders will look at the credit history of all the people on the mortgage, and if one of you has a bad credit score, it can make it harder to get a mortgage. A joint mortgage is a common way for co buyers to share both ownership rights and repayment responsibilities, especially when purchasing property together. And when you’re joint tenants, you’re both responsible for the mortgage payments – so if one person loses their job or can’t pay their share, the other person will still be liable.

It’s not just about avoiding disputes – it’s about making sure you’re both on the same page about property ownership from the start. Both joint tenants and tenants in common can face disputes over property management and financial responsibilities. If you’re not careful, it can all go horribly wrong down the line.

What is Tenancy in Common?

Tenancy in common is a way of owning a property that’s different from joint tenancy. Tenancy in common involves shared ownership, where co buyers each hold individual shares of the property, which can be equal or unequal shares depending on your agreement. Each co-owner has distinct ownership rights, and this flexibility means you can leave your share to family members or other beneficiaries in your will. You might own 50/50, or you might own 70/30 – it’s completely up to you.

What are the downsides of Tenancy in Common?

The main problem with tenancy in common is that it can be a bit of a minefield. If you want to sell your share of the property, you’ll need to get permission from the other owners you’re buying with. The legal process can become more complex if circumstances change, such as changes in personal or financial circumstances. And if they don’t want to sell, you might find yourself stuck. A Deed of Trust is a legal document that outlines each party’s financial contributions to a property purchase and specifies actions to be taken in various circumstances. And if you want to get out of the tenancy, you’ll need to go through a lot of paperwork and make a declaration of trust.

Key differences between Joint Tenancy and Tenancy in Common

Joint Tenancy

• Joint tenants all own the same share of the property
• Joint tenancy requires the agreement and cooperation of all co-owners, and there can be up to four owners in a joint tenancy
• If one joint tenant dies, the other people on the tenancy automatically get the whole property
• One party cannot act independently to sell or refinance the property; all owners must agree
• You all have to take title at the same time, using the same legal document

Tenancy in Common

• Tenants in common own individual shares of the property, which may be unequal shares.
• Tenancy in common can offer added legal protection, especially in divorce proceedings or estate planning.
• When one tenant dies, their share goes to whoever they left it to in their will
• You need to get permission from the other people you’re buying with to do anything with the property
• If you want to leave the tenancy, you need to go through a lot of paperwork* There seems to be an agreement among all joint tenants that works for everyone.
• Most joint tenants are married couples, or civil partners, but it can also be a family arrangement.

Tenancy in Common

• In a tenancy in common situation, the ownership can be split up either evenly or not so evenly between the tenants.
• When one of the tenants in common dies, that deceased owner’s share in the property does not automatically pass to the surviving co owner. Instead, the deceased owner’s separate share is distributed according to their will. If there is no will, intestacy rules will determine how the share is inherited.
• Each co-owner owns their own separate share of the property – they can leave that share to whoever they want in their will, and that can be really helpful if there have been previous relationships. They can then decide who gets what share of the property.
• If one of the co-owners wants to make some changes to the property, they can usually do it without waiting for the others to agree.
• Tenancy in common is often chosen by business partners and friends who want to be able to make their own decisions about the property.

Joint Tenancy tends to work best for people who are in a long-term relationship and see their finances as one shared pool. In practice, this means they own the property equally. Tenancy in Common on the other hand is a better option if you’re investing with business partners, and one of you is putting up more of the deposit, or you want to make sure your children inherit your specific share of the property.

Can you actually change from Joint Tenants to Tenants in Common?

Yes, you can change from one to the other. Breaking a joint tenancy to become tenants in common isn’t uncommon – especially during relationship break downs or when there are inheritance issues. When circumstances change, such as relationship breakdowns or inheritance issues, the legal process for changing ownership type becomes important. A lot of the time this is because:

• People want to ensure that the property goes to their children rather than automatically going to the other joint tenants.
• If a couple splits up, they switch to tenants in common to protect their own financial interests while they’re negotiating the sale of the house.
• Tenants in common give you a lot more control over your portion of the equity – whether that’s selling it or transferring it to someone else.

Changing the way you own a property involves some pretty specific legal steps – you need to give written notice to the other co-owners, update the Deed of Trust and tell the Land Registry. If you want to change it, you and the other joint owners all need to agree on it, and the records at the Land Registry might need to be changed too. To change from joint tenancy to tenancy in common, joint owners must mutually agree to sever the joint tenancy and initiate an application to enter a Form A restriction. The joint owners must also complete and sign the relevant part of the Land Registry Form SEV. A Deed of Trust outlines each party’s financial contributions and actions in various circumstances. If you’re switching from joint tenancy to tenancy in common, the other joint owners need to agree to lift the joint tenancy – and you’ll need to sort out a Form A restriction. The process is a bit trickier the other way round – you need agreement from all the other joint owners and might need to change the terms of the Deed of Trust to go from tenancy in common back to joint tenancy.

Working out whether to go with tenancy in common or joint tenancy can be a real challenge – this guide is a good start, but you’re usually best off getting the advice of a proper lawyer before you commit to anything – things can change so quickly, and the best choice depends on your individual circumstances. And of course if you need an advice to end your tenancy – have a look at our guide on writing a notice letter to your landlord.