Moving out into a home you own with your loved ones or friends is an exciting time! But, as there always is with owning property, there are some obligations you need to be aware of. Multiple occupancy households have 2 choices when it comes to owning a property: becoming joint tenants or tenants in common. What’s the difference though?

Although they both refer to individuals holding an interest in the same property, there are certain distinctions you need to know before you enter into any agreement. Gain a clearer understanding by reading this article.

Should I Choose Joint Tenants?

LexisNexis defines “joint tenants” as: “Joint tenants share equal ownership of property and have the equal, undivided right to keep or dispose of the property.” Whether you paid more or less of a deposit or you’re paying more or less mortgage contributions than the other, you equally own the property together.

Joint tenancy is very common among romantic couples entering into property ownership together, however there is always the risk of separation. If you want to avoid the awkward situation of splitting the property down the middle even though you paid more towards it, there are other options. A Cohabitation Agreement will enable you to clearly state how your assets are owned and what should happen if separation does occur.

Another thing to note is that the rule of survivorship only applies to joint tenants. Upon the death of a joint tenant, there is a seamless transfer of ownership without going through probate so the property remains intact and accessible to the surviving co-owners. Even if you’ve stated in your Will that you wish for your ownership to be transferred, this is overwritten by the rule of survivorship.

Should I Choose Tenants in Common?

LexisNexis defines “tenants in common” as: “Tenants in common share ownership of property, but not necessarily in equal shares. On the death of one of the tenants, their share passes to their beneficiaries in accordance with their Will or intestacy.”

As the property owners, you have the power to decide how the ownership is divided, whether it is how much was contributed towards the deposit or the mortgage payments. Then, if the property is sold in the future, each owner receives the same share back from the sale. Tenants in common is more popular among family and friends purchasing property together as there are clear boundaries between individual shares and less risk of dispute.

The rule of survivorship does not apply to tenants in common, so upon the death of a tenant, the ownership will be transferred to their beneficiaries instead. It is recommended to draw up a Deed of Trust which sets out the financial interests of each party as well as what should happen in the event if the property is sold or bought out by a co-owner. This ensures shares are fully protected.

What is the Best Option for Me?

Now you know what the difference is between joint tenants and tenants in common, you may still be wondering which option is best for you. The decision should be based on whether you will be contributing equal or unequal shares with the other tenants and how you would like to organise your shares in the future.

No matter how many tenants are occupying a property, it’s always important to keep your space clean and comfortable. At Pinpoint Homes, we understand that we lead busy lives and cleaning can get pushed to the back of the queue – but we’re here to help!

From carpet cleaning to one-off cleaning or deep cleaning if you need it, we’ve got it all. Contact us today to discuss your requirements to see which service would fit you best.

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