Co-ownership

Question 1

Joint Tenancy

Answer 1

In the UK, a joint tenant refers to one of two or more people who own property jointly under a legal arrangement called joint tenancy.

Key Features of Joint Tenancy in the UK:

1. Right of Survivorship:

When one joint tenant dies, their share automatically passes to the surviving joint tenant(s), regardless of what is written in their will.

2. Unity of Ownership:

• Joint tenants are treated as owning the whole property together, not in individual shares.
• The four unities must be present: possession, interest, title, and time for there be to a joint tenancy.

1. Unity of Possession – All co-owners have equal rights to possess the whole property.
2. Unity of Interest – Each has the same type and duration of interest.
3. Unity of Title – All acquire title under the same act (e.g. same deed).
4. Unity of Time – All interests vest at the same time.

Question 2

Tenant in common

Answer 2

Tenancy in Common (TIC) is a type of joint ownership in real estate or property where two or more individuals hold an interest in the same property, but each owns a separate and distinct share. Here are the key features:

Key Characteristics:

Separate Interests:

Each co-owner (called a “tenant in common”) owns a specific share of the property, which can be equal or unequal (e.g., 50/50 or 70/30).

No Right of Survivorship:

Unlike joint tenancy, when a TIC owner dies, their share goes to their heirs or as specified in their will, not automatically to the other owners.

Right to Transfer or Sell:

Each owner can sell, give away, or transfer their share independently without the consent of the other co-owners.

Equal Right to Possess the Whole:

Despite unequal ownership shares, all tenants have the right to use and occupy the entire property.

Can Be Created Anytime:

A TIC can be created by deed, will, or court order, and owners don’t need to acquire interests at the same time.

Question 3

How to create and register a declaration of trust

Answer 3

Create the Declaration of Trust

You (and the other co-owners) must first draft and sign a legally valid Declaration of Trust.

This document should include:

• Names of all parties
• Property address
• Exact ownership shares (e.g. 60/40)
• Who paid what (e.g., deposit contributions, mortgage payments)
• How sale proceeds should be divided
• Agreements on upkeep, expenses, or buy-out options (optional)
• Signatures of all parties, witnessed properly

2. Protect the Declaration

(Optional but Recommended)
Although the Land Registry does not “register” a Declaration of Trust per se, you can protect the interests under it by doing one or both of the following:

A. Form RX1 – Register a Restriction
This puts a restriction on the property title noting that a trust exists.

• Complete Form RX1
• Add this standard restriction:

“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.”

• Submit to HM Land Registry along with:
• A copy of the signed Declaration of Trust (or summary of terms)
• Form AP1
• Fee: £40 (as of 2024)
• Send to: HM Land Registry Citizen Centre
• This protects the beneficial interests in the trust by flagging to buyers/lenders that there are co-beneficiaries, so one person can’t sell without consent.