Tenants in Common or Joint Tenants
Homeowners can either be “Tenants in Common” or “Joint tenants”.
Are you aware which one you are likely to be?
Moreover, different legal implications are surrounding the two statuses.
The terms only apply to properties that are purchased jointly.
If the relationship between the two property owners breaks down, or one should die, what happens to the property is important.
There are different circumstances for property owners in a “joint tenancy” than to those in a “common tenancy”.
Laws and Regulations
In the UK, around 65 per cent of homeowners are in an agreement as “joint tenants”.
There are equal rights and ownership over the property given to each partner.
If the case or death, the advantages for landlords who survive the partnership is that they get to own 100 per cent of the property.
In a joint tenancy, the partners cannot pass the property on to a relative or friend in their will.
When one dies, full ownership is automatically granted, and 100 per cent of the property becomes the owner of the other partner.
Tenants in Common
This is a much clearer method of investment for house owners.
However, it has not proven to be as popular.
A mere 12 per cent of homeowners in the UK can say they own their property as tenants in common.
Advantages for tenants in this situation are clear.
Tenants in common own a fixed stake in the property.
Often this will be 50/50, but it does not have to be. It has advantages for tenants in many ways.
This arrangement is often seen where one tenant cannot afford to buy the entire property on his own.
In many cases, renters can only provide to own as little as 10 or 15 per cent of the property, while the other tenant becomes the majority stakeholder.
Tenants in common is a good way of splitting the property in the event of a partnership breakdown.
All the stakes have been agreed beforehand, and the paperwork and legal documents will be signed off.
There are advantages for renters and homeowners who opt for becoming tenants in common.
Often, there is assistance from parents, some of whom may help with a small stake in the property or place down a deposit.
The tenants in common can also consider getting in renters to help boost the income this type of arrangement can yield.