When a property is purchased in joint names the legal ownership is held as Joint Tenants, whereas the beneficial interest can be held as Joint Tenants or Tenants in Common.
If you own the beneficial interest as Tenants in Common, each owner owns a specific share of the property. You will both agree what this percentage is at the time you buy the property, this can be 50% each or held in unequal shares. Unmarried couples, couples with children from previous relationships and investors in property will usually own a property as Tenants in Common.
Recording Your Wishes
As you each own a separate share in the property you are entitled to leave your individual share to your chosen beneficiaries when you make a Will. If you do not have a Will when you die, your share will pass to your nearest living blood relatives according to the Rules of Intestacy. It is important when buying a property to ensure your Will is reviewed and updated to reflect your wishes.
Once you have agreed how you wish to hold the property, you should advise your Conveyancing Lawyer before completion of your purchase. Your Conveyancing Lawyer will consider your circumstances and advise you of the best way to protect your interest.
When buying a property the Declaration of Trust panel in the Transfer Deed can be completed to show your intentions to hold the beneficial title as Tenants in Common together with the percentage split. The Transfer Deed will be lodged with the application to register the property into your names after completion.
Once lodged at the Land Registry the document becomes public. If you prefer to keep the details of your beneficial ownership confidential your Conveyancing Lawyer will suggest drafting a separate Declaration of Trust Deed. The Transfer will still be lodged with the application to register your ownership, however the percentage split will not be displayed as this will be contained in the Declaration of Trust.
Declaration of Trust
A Declaration of Trust will usually be charged as additional work by your Conveyancing Lawyer. When getting Conveyancing quotes you should ask if this work is an additional cost.
A Declaration of Trust can be more detailed than merely confirming the percentage denominations, for example it can include:
- Percentage split of how the beneficial ownership is held.
- Confirmation of the contribution towards the purchase price, and if one party paid more they may want this recovered prior to the beneficial division.
- How the property is to be divided should the parties separate.
- The parties’ responsibilities towards the mortgage and other outgoings.
When the property is held as Tenants in Common and registered at the Land Registry a Form A Restriction will be placed on the title to reflect there is a Trust in place and protect it. The Land Registry will not record the specific details of the Declaration of Trust on the register.
If you have any other concerns about how to hold the beneficial interest or what information can be recorded, discuss this with your Conveyancing Lawyer as soon as possible to enable your wishes to be properly recorded. It is important to formally record an agreement to avoid any potential disputes in the future.
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