Newspaper article The Journal (Newcastle, England)

Trust Your Wishes Will Be Followed; the Way We Hold Property Is Important. Rukhsanah Haroon Looks at the Options

Newspaper article The Journal (Newcastle, England)

Trust Your Wishes Will Be Followed; the Way We Hold Property Is Important. Rukhsanah Haroon Looks at the Options

Article excerpt

WHEN buying property jointly, whether as your home or as an investment, all parties need to form a declaration of trust also known as a trust deed.

This is a kind of statement that makes it clear how much property is owned by whom, and the contributions made by each person at the time of the purchase. It should also set out their responsibilities regarding maintenance and giving notice to sell should the relationship break down or the death of one party.

There are two ways in which property can be owned jointly, either as joint tenants or tenants in common; the terms have a different legal meaning to the type of tenant who rents a property from a landlord.

Joint tenants IF you hold the property as joint tenants, both of you will own the whole of the property. You will not each have a quantified share in the property and will not be able to leave a share of the property in your will.

If you sell the property, or if you separate, it will be presumed that you both own the property equally, regardless of your respective contributions to the purchase price. On the death of one co-owner, their interest in the property would automatically pass to the remaining co-owner without any further action. The surviving co-owner would then own all the property and on their death it would form part of their estate.

Married couples or those in civil partnership commonly use this method of co-ownership because the right of survivorship makes it straightforward to inherit each other's shares in the property.

However, there may be reasons not to become joint tenants - for example, if one of you has made a large contribution to the purchase price of the property and you would want this to be recognised. A joint tenancy is also not suitable if you have family from an earlier marriage and wish to leave interest in the property to them.

Tenants in common IF you hold the property as tenants in common, each of you will own a specified share in the property. Your shares may be equal, but they do not have to be.

Your share of the property can be passed on to another person, either during your lifetime or under your will. …

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