When property is being purchased by more than one person the co-owners have to decide how the property is to be held.
BENEFICIAL JOINT TENANTS
In the majority of cases property purchased by a husband and wife is purchased by them as Beneficial Joint Tenants. This means that both parties have an identical legal interest in the property and in the event of the death of one of them the whole property passes to the survivor. If the property is to be sold due to the breakdown of the marriage then the sale proceeds are divided equally regardless of contributions made by each party to the purchase price or the outgoings.
TENANTS IN COMMON
It is often the case nowadays that couples decide not to marry but still decide to purchase a property together. In addition it is not uncommon for a group of friends or indeed family members to get together to purchase a property and in such instances they may decide to own the property as Tenants in Common. As Tenants in Common the co-owners still have a legal interest in the property which could either be equal or unequal depending upon the contribution made by each person to the purchase price or the running costs of the property. In such cases a separate legal document (Declaration of Trust) is drawn up to set out the shares that it has been agreed each party is to have in the property.
A Declaration of Trust or Trust Deed will clearly set out the respective interests of the co-owners so that in the event of a split of co-habitees or partners the division of the proceeds of sale is documented.
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