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the difference between tenants in common and joint tenants

Published: 17/12/2021

The difference between 'tenants in common' and 'joint tenants' is about the joint ownership of a property and how the ownership is made up. 

What is a joint tenancy?

A joint tenancy is when both purchasers of the property own it equally. It usually occurs when buying a property with a spouse, family member, or someone you have a close relationship with. It's a simple partnership that requires less paperwork than the more complex options.

What are the pros of a joint tenancy?

  • Because it's simple, it requires less paperwork which means less time resulting in fewer legal fees. 
  • Right to survivorship – if one tenant dies, their share goes automatically to the other tenant. This is unique to joint tenancies. 
What are the cons of a joint tenancy?

  • It doesn't allow for more complex situations where there may be unequal financial contributions. Each tenant would own the same percentage regardless of how much they contribute).
  • An agreement from both owners is required to sell the property, and should one owner not agree; there is a legal process to gain a court order.
What is a tenancy in common?

When purchasing a property as tenants in common, the tenants can own unequal shares in the property. This is the best option if you purchase a property with someone you are not close with or buy it as an investment.

With a tenancy in common, a deed or declaration of trust is required to lay out the specifics of the property owner. These usually come into their own in the event of a breakdown in the relationship between tenants in common.

What are the pros of a tenancy in common?

  • Tenants in common are not required to own an equal share of a property. When a property is sold, the proceeds are divided using the percentage of shares in the property rather than being divided equally, allowing for unequal financial contributions, i.e., if one tenant is fronting the entire deposit or is paying a more significant percentage of the mortgage. 
  • Having a smaller share of the property ownership doesn't mean that your rights to the property are reduced. If you were to own twenty percent of a property and the other person were to own eighty percent, you still have a right to access the whole thing if you reside at the property.
What are the cons of tenancies in common?

  • The signatures of both tenants are required on the transfer deed to sell the property. However, the wording of the Deed of Trust can make it easier for a sale to be forced should the situation arise.
  • Each tenant can sell shares to anyone; it doesn't have to be to the other tenant.
  • If a tenant dies, their share belongs to their estate and doesn't automatically pass to the other tenant. If tenants want their share to transfer to a specific person, they need to specify their wishes in a Will.
Our advice is to seek good, solid legal advice before purchasing a property with either of these arrangements to help you decide which option is best in the short and long term. For further guidance, call Circa on 020 3137 7877.
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