What is joint property and why should you care?

Joint property is a situation when a property is owned by more than one person – that is there is more than one name attached to the ownership of the property. Many different types of property can be jointly owned such as a house, building, land or bank account.

When a property has more than one name attached to it, the nature of the joint ownership is further defined. In the UK, for example, there are two ways of owning a property jointly. One is known as a joint tenancy and the other is a tenancy in common. It is very important to distinguish these two types of property ownership since it determines how that property is dealt with after the death of one joint owner.

Joint tenancy
If a property ownership is defined as a joint tenancy, on the death of one owner, the property is inherited by the surviving co-owner. This means that ownership is transferred onto the surviving name of that jointly owned property regardless of what is written in the deceased owners will. Therefore, a property that is owned by way of a joint tenancy cannot be passed through a will.

Tenancy in common
The second way of joint property ownership is a tenancy in common. When a property ownership is defined as a tenancy in common, then on the death of one owner the deceased persons share is passed on according to what is written in the deceased’s will. Therefore, if you want to pass on your share by will of a jointly owned property you have to make sure that it is owned as a tenancy in common.

How do you know whether a jointly owned property is held as a joint tenancy or tenancy in common?
If you don’t clearly define whether a property is owned as a joint tenancy or as a tenancy in common then surrounding factors are taken into account to determine the nature of the ownership. For example, a husband and wife who hold a property in joint names will generally be determined as a joint tenancy and as such if one dies the deceased person’s share will automatically go to the surviving spouse.

Similarly, a bank account held in joint names will usually be interpreted as a joint tenancy. Property held as a joint tenancy will be owned equally by the named individuals. However, if there is anything to indicate that the owners own different shares rather than each owner owning the entirety then the property is held as a tenancy in common. Words or actions that suggest that the owners own unequally suggest that the property is held as a tenancy in common.

You can find out more about joint property by clicking here.