Quite frequently when cohabitees buy a property together they will buy it jointly. There are a number of points to be aware of about this.
Firstly, they have to decide whether to buy it as “joint tenants” or as tenants in common”. The difference between the two is mainly a difference about what happens if one joint owner dies. If a property is held as “joint tenants” then when one of the joint owners dies the property belongs automatically to the surviving joint owner. And this will be independent of what the deceased joint owner says he/she wants to happen to the property in a will. It is a characteristic of a joint tenancy that the property automatically passes to the survivor. This happens as a matter of law and a will does not affect that.
On the other hand, if a property is held as “tenants in common” and one of the joint owners dies then his/her share of the property does not automatically pass to the surviving joint owner. The deceased’s share forms part of his/her estate and will pass according to the terms of any will or intestacy. So, in this case the deceased could, if he wished, leave his share in the property by will to the surviving joint owner but he is not obliged to. He could also leave it to anyone else and this might be important, for example, when each partner has children by another relationship and he/she wants his/her share of the property to pass to those children rather than the surviving partner.
In the latter case there is a choice as to what is to happen whereas in the former there is none. It is a characteristic of a joint tenancy that the property passes to the survivor in the event of death. The only way of preventing this is to hold the property as tenants in common. This is most easily done when the property is bought in the first place. It is simply a matter of telling the lawyer who acts in the purchase whether the joint owners wish to hold the property as joint tenants or as tenants in common. It is astonishing how many conveyancing lawyers never raise this subject when a property is being bought jointly.
If the property is originally bought as joint tenants but the joint owners later realise that they would prefer to hold it as tenants in common that is quite straightforward to do. One joint owner formally notifies the other that the joint tenancy is to be converted into a tenancy in common. There are certain technicalities about how this is done but basically it is quite simple. However, this can only be done while both joint tenants are still alive. If one dies before the tenancy has been “severed” (the technical term for converting the joint tenancy into a tenancy in common) then it is too late and the property will have remained a joint tenancy at the moment of death.
The second main question that two cohabitees have to decide when they buy a property jointly is whether their shares should be equal. In the above two cases, for example, if nothing further is said about the matter it will be assumed that each joint owner has an equal share in the property whether they are joint tenants or tenants in common. Sometimes this is not a sensible thing to do so it is important to be aware that some formal document should record the fact that the parties have an unequal interest in the property if that is the intention.
Sometimes, for instance, one person will provide all of the deposit and pay all the mortgage payments. Now, it is perfectly possible in such a case for the joint owners to buy the property in their joint names but it would actually be sensible in such circumstances to have a written agreement drawn up which specifies precisely what each joint owner is to receive in the event of a sale of the property. If this is not done there could well be problems at a later date and many of these problems tend to recur in situations where cohabitees own property jointly. A jointly owned property does not necessarily have to be owned in equal shares.