Joint
Ownership - the methods
Beneficial
Joint Tenants
If a property is owned as beneficial joint tenants then
this means that the whole property and the proceeds of its sale belong to both
owners as one. They do not have separate shares each – they both own the
whole thing. Neither of them have a separate share which they can sell or
leave in a will. If one person dies than the survivor becomes the owner of the
whole property. This happens automatically without any further formality. This
method of ownership suits most married couples but by no means all. Even
married couples should consider their position and requirements - this can be
particularly relevant when making a will and dealing with Inheritance
Tax
planning
Tenants in
Common
This method of ownership still means that the property is
owned jointly however,
each joint owner has a distinct share. Those shares can
be either equal or unequal depending upon the agreement that is reached
between the owners. If the property is owned in this way and one owner dies,
then
that deceased owners share will pass in accordance with the terms of that
persons will or under the rules of intestacy, if no will has been made. If a
property is owned as tenants in common then it would be prudent for there to be
a separate deed setting out those shares in the property and how the proceeds
of sale would be divided if the property was sold. Such a document is usually
called a ‘Trust Deed’ or a ‘Declaration of Trust’
Click
here to go back a page to choose a trust deed to
download or click the Trust Deed button in the menu on the left
How do you find out how you own a property?
The answer to this is that you need to look at the title deeds. Most house
deeds in England or Wales have a
registered
title. This means that there will be a
record of ownership at HM Land Registry. You may have a print of the register
entries but you will need to get a copy from HM Land Registry to check up to
date information - you can do this via the Land Registry online service at
http://www.landregisteronline.gov.uk/ . Once you have a copy of the
register you will find there is a section headed
'Proprietorship
Register'.
If you look in that there may be a entry which reads something similar to -
No
disposition by a sole proprietor of the land (not being a trust corporation)
under which capital money arises is to be registered except under an order of
the Registrar or the Court
If
that entry is there,
then you are tenants in common. If it is not,
then you are beneficial
joint tenants
If
the title to the property is unregistered (which is now becoming quite unusual)
then you need to look at the conveyance to the two joint owners. The
wording is less specific than with registered land but at some point there
should be a clause which states that the property is conveyed to the
purchasers "........as joint tenants" or "..........as beneficial
joint tenants" or ".....as tenants in common". This shows the
position as it was at the date of that conveyance - it may have changed -
see below
Changing
the way you own the property
If
you are beneficial joint tenants and wish to become tenants in common (and
remember that you
need
to be tenants in common for any of the
trust
deeds to be effective) then the procedure you need to adopt depends on whether the
property has a registered title or an unregistered title.
For both
registered and unregistered
titles the first step is for one party to serve on the other a notice to say
that the joint tenancy has ended. There is no special form of words needed
for this - just a letter from one party to the other. As a guide the letter
could say something like -
'Please accept this letter as notice that the joint
tenancy in the property known as xxx is herby severed and we will henceforth
own this as tenants in common'.
This form of
notice does not have to be in any specific form - just so long as the
meaning is clear. The other party should countersign to signify that they are
aware of the notice.
Most
property in England and Wales has a registered title and if this is the case then
you need to register a Restriction at HM Land Registry. In order to do
this you have to complete a Land Registry Form RX1. This can be downloaded for
free from the
Land
Registry web site. The form is quite straightforward. When you get to the
section about the type of restriction you wish to register the wording
you need to put in is -
No disposition by a sole proprietor of the registered estate (except a trust
corporation) under which capital money arises is to be registered unless
authorised by an order of the court.
Once
the form is completed you will need to send it to HM Land Registry. There are
24 District Land Registry's around the county who each deal with different
geographical areas. You can find out which is the relevant area to you from
the listing which they have on
their
web site.
Note that with effect from 10th
November 2008 the registration of the standard joint proprietorship
restriction will be dealt with using from SEV instead of RX1. The form
is available for download for free from Land Registry web site.
If
the title is registered then the registration of the Restriction is
essential as it is this that gives notice to anyone dealing with the title
that there is a tenancy in common. If the Restriction is in place then a
buyer has to pay the purchase money to at least two trustees - if one has
died a second has to be appointed. This stops the survivor of joint
proprietors selling the property without dealing with the deceased owners
share.
If
the title to your property is not registered at HM Land Registry
then there is no title against which a restriction can be registered. Instead
a note (called a memorandum) of the change of method of
ownership (called severance of joint tenancy) should be written onto the conveyance to
the joint owners. The wording could be something along the lines
of -
Memorandum
By
a notice of severance dated the day
of 2010
and made between the parties to this conveyance the parties declared that they would henceforth hold
the property comprised herein and the net
proceeds of sale thereof upon trust for themselves as tenants in common
Once
that note has been written on to the conveyance then this serves to tell anyone
dealing with the title to the property that it is owned as tenants in common.
If it is not written on then a purchaser of the land would not be deemed to
be aware of the change in manner of ownership
Note
that neither method of changing the manner of ownership
regulates in any way the arrangement between the parties - to do this you need
to set out your requirements in a separate
trust deed
If
you are already tenants in common and wish to change the manner of ownership
to beneficial joint tenants then there are two aspects to this. The first is a
declaration as to the change of method of ownership and the second is to
withdraw the joint proprietorship restriction registered at HM Land Registry.
If the title is not registered then of course there is no joint proprietorship
restriction to withdraw
You
can download a suitable form of declaration by by clicking on the button
below. The form to
cancel the Restriction against the title at HM land Registry
is called a Form
RX3 and
it is available for free to be downloaded from
the Land Registry
|
Declaration
as to beneficial joint ownership - suitable for property with registered
title |
£10 |
 |
|
Declaration
as to beneficial joint ownership - suitable for property with
un-registered title |
£10 |
|
If
the property is in the sole name of one party but is held for the joint benefit
of two people then this too can be recorded in a trust deed. Click
here
for more information
The
documents downloaded from this web site will be in the form of a Zip file. Once downloaded it will unzip to a Word
document. You will need a zip utility to unzip the document - Windows XP
contains a built in utility. Alternatively shareware versions suitable for
unzipping a file can be obtained from the Internet - for example, click the Winzip
button at the side of this page.
The
documents available on this site have been prepared for use in England &
Wales. They may not be valid if used in other areas.
