History and Explanation of Joint Tenants v Tenants in Common

Many of you may or may not have heard the term Joint Tenants or Tenants in Common or someone doing something to how they own property to protect 50% of the property for loved ones.

Old England and Land

• In England, Wales and Northern Ireland, the Monarch (currently King Charles III), as head of state, owns the superior interest in all land. 
• The Monarch of the land granted rights as a ‘thank you’ to loyal lords, barons and those swearing allegiance.
• These rights were usually granted with no rents to pay to the Monarch, thus the new ‘owner’ of those rights over the land becoming a freehold tenant of the land.  Note:  Freehold and Tenant.
• Over the years, landlords parcelled up (divided) their land rights and sold or gifted them on, to the new freeholder (no ground rent payable) or leaseholder for a periodic lease of anything between 125 years and 999 years, with the land returning to the freeholder at the end of the lease period.  Leaseholder’s will usually pay a ground rent.  Sometimes a ‘peppercorn rent’ other times a substantial ground rent that has been in the news regularly with leaseholders complaining about high ground rents that they are trapped in.
• There are currently around 1m freehold titles in England alone and nearly 5m leases (mainly blocks of flats, apartments that share the land but also on many new build sites).

Joint Tenants

When you buy a property or land with another e.g., your partner, you jointly become tenants (both freehold and leasehold).  This is joint tenants.

• This means you own all the rights, and your partner also owns all the rights over the land too.  You jointly own it all and you are jointly liable for all of the debts.
• A property with a mortgage is almost always set up under Joint Tenants so that all parties are jointly and severably liable to own all the land but also pay all debts on the land.
• When the first person dies, the surviving partner already owns the whole of the land and continues to own all of the land rights.
• This means it is a simple transition of ownership on death by simply removing the deceased’s name off the land registry title.
• Downside:  If the surviving partner then needs some form of social care, the whole of the property/land can be included in the means test and you loved ones/children may not inherit all or some of the property.

Sever Joint Tenancy to Tenants in Common

• Joint owners can easily sever Joint Tenancy with a Form A Restriction submitted to the land registry.
• Imagine you draw a red line down the middle of your property.  You now own half, and your partner owns the other half.
• This is known as ‘Tenants in Common’.
• You cannot usually sever Joint Tenancy until the property/land is mortgage free.
• When the first person dies, their share if the property is disposed of by their will and surviving partner already owns their share of the land/property only.
• Usually, a ‘life interest’ trust is created by the Will of the deceased meaning the deceased leaves their share of the property in trust e.g., for children but grants a life interest for the surviving partner to continue using/have enjoyment of the other half of the property (that is now in trust for say children), rent free until they die, sell up and move or need to go into care.
• This is a simple transition of tenancy type with the Form A and then on death, say 50% of the property is transferred to the trust..
• The surviving partner still owns their share of the property, and the other half (in trust) can still be used.
• Upside:  If the surviving partner then needs some form of social care, only their share of the property/land can be included in the means test and the other share of the property is protected from any care fees means test.

You now know the history of freehold and leasehold as well as Joint Tenants v Tenants in Common.

Our Fees for 2 X New Wills and Severing Joint Tenancy: Sever Jt Tenant

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