Monthly Archives

August 2017

The Different Types of Joint Ownership

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Joint Ownership

Couple Joint Tenants

 

Joint ownership of property is one of the most misunderstood areas of law by persons purchasing a property or indeed making a will. Time and time again we ask how a property is owned or how it is intended to be owned the answer is “jointly”. But what does jointly mean in terms of property ownership and why should you care?

There are two types of property ownership; property can be held as either joint tenants or tenants in common. How you choose to own the property can affect both how the net sale proceeds are divided (if they are divided at all!) and/or what happens to your interest in the property in the event of death.

Joint Tenants

If a property is held as joint tenants there is a presumption that the property is held in equal shares by the property owners. The other distinguishing feature is that the right of survivorship automatically applies – this means that in the event of the death of one of the property owners the deceased share will pass automatically to the surviving co –owner(s) of the property. The deceased owner can then usually be removed from the land registry records by formally notifying the land registry of the death.

Tenants in Common

If property is held as tenants in common the property can be held by the property owners in equal or unequal shares. This is particularly useful when one party is contributing more to a property than another. The other distinction is that a right of survivorship does not apply to property held as tenants in common. So in the event of death of one of the owners the deceased share will be left to a beneficiary as specified in the deceased’s will or upon intestacy (where death occurs without a will).

In the event of a tenancy in common with unequal ownership it is recommended that a deed of trust is entered into setting out the respective contributions and terms of ownership between the parties to include if required who is responsible for the payment of bills, repairs etc.

You may be wondering how this relates in real life? Consider the scenarios below:

Daniel and Zoe are an unmarried couple. They decide to buy a property together. The property costs £600,000 the mortgage is in joint names for £300,000. Daniel is contributing £200,000 and Zoe is contributing £100,000. Daniel and Zoe wish to hold the property “jointly”.

Scenario 1

Daniel and Zoe purchase the property as joint tenants. After owning the property for a couple of years sadly their relationship doesn’t work out and comes to an end so they decide to sell the property. As the property is owned as joint tenants there is a presumption that the equity (if any) will be split equally. You will note that Daniel contributed twice as much to the property as Zoe when the property was initially purchased.

Scenario 2

Daniel and Zoe purchase the property as tenants in common having taken advice due to the unequal contributions being made by each of them. They decide to have a deed of trust drawn up which provides for the initial monetary contributions to be returned to each party in the event of sale with the remainder of the net sale proceeds being split equally. Therefore in the event of sale each party, providing there is sufficient equity in the property, safeguards their initial contributions.

Scenario 3

Daniel and Zoe own the property as tenants in common as above. They do not sell the property and instead live in the house and plan a future together. At the time of buying the property they were advised to each have a will drafted since as we know there is no automatic right of survivorship with a tenants in common ownership. They decided not to do this due to the expenses of buying the property and instead intend do so at a later date. Unfortunately they do not get round to doing it and sadly Zoe dies. Daniel does not inherit as there is no will. Zoe’s relatives now inherit. Daniel is left in the position of owning the property with Zoe’s family who now wish to sell the same. If Zoe had made a will leaving her share of her property to Daniel then this would not have occurred.

The above are examples in their most simplest form and are intended only to outline the different forms of joint ownership and their possible effects relating to both future resale of the property and/or in the event of death.

For advice please contact:

  1. Conveyancing, Nicola Payne
  2. Wills, Kim Boylett
  3. Deeds of Trust, Nigel Barnes

Call us today on 0208 370 2800

Land Registry Fraud and How to Prevent it

By | Barnes and Partners, Solicitors in London | No Comments

Buying your home

Have you recently bought a property? Did you know property fraud is on the up?

 

In-fact, you may not realise that anyone can obtain a copy of the title to your property by visiting the Land Registry website.

 

In 2002, all registered titles in England and Wales were digitised and the old paper Land Certificates and Charges certificates became redundant. Subject to payment of the necessary fee to the Land Registry, anyone can access the title to a property. This, added to the increased incidence of identity fraud, has opened a new avenue to possible fraudsters.

 

There have been a number of instances reported in the press of fraudsters posing as the owners of registered property and selling it on to an unsuspecting buyer. The innocent buyer stands to lose all of the monies paid over to the fraudster who needless to say will usually disappear into the ether.

 

Initially the fraudster needs to steal the identity of and hold himself or herself out as the owner of the targeted property. By law the estate agent and solicitor must carry out identity checks on potential sellers, however if their processes are less than robust, this makes the fraudster’s task that much easier and adds an air of legitimacy to their scheme.

 

It makes sense for a homeowner to take certain steps to reduce the risk of the property being fraudulently sold or, in some cases, mortgaged. Properties that are particularly at risk are those where the owner does not live there because they live overseas or in some other part of the country, rent it out, the property is empty for long periods and not mortgaged.

 

Obviously, this is a worrying issue, but there are a couple of things you can do to help as a pro-active measure to help.

 

The Land Registry has devised two main ways to try to alleviate the situation – these are as follows:

 

1.The placing of a restriction on a title so that no changes can be made to the Register without a solicitor or conveyancer certifying that the application is made by the registered proprietor. If the owner does not live at the property this is free; if they live at the property there is a fee of £40.

 

2.You can also sign up to the Property Alert Service. If someone applies to change the register to a property the owner will be alerted by e-mail. It will not stop the changes, but makes one aware of activity on the title.

 

If you have any questions about land registry or indeed about conveyancing and the buying and selling process, please don’t hesitate to get in touch – 0208 370 2800.

 

Robert Dawson, Conveyancer, Barnes and Partners Solicitors Edmonton