Residential Real Estate

Joint Ownership & Loan Agreements

Setting up an agreement between you and your co-owner protects your investment from the start. Our expert property lawyers can advise you the best type of agreement for you and your situation.

Buying a property with someone can be a great idea. By pooling your mutual resources, you may be able to purchase a home that otherwise would have been out of your reach. There are, however, things to consider. When the two parties find they have different ideas about what to do with the property, the relationship can quickly go sour. This, in turn, can land you in a lot of trouble, both financially and legally.

Joint ownership of property

There are two different ways in which property can be owned when purchased jointly; either as ‘joint tenants’ or ‘tenants in common’. Both mean that the property is owned jointly but the way it is viewed in law is very different.

Joint Tenants

If you own a property as joint tenants, then you each own the whole of the property together. If one of the owners were to pass away, the property would continue in the name of the surviving owner or owners. This happens regardless of the terms of the will.

Tenants in Common

If you own a property as tenants in common, you each own your own distinct shares in the property. This allows you to divide up the property into shares, which can be 50/50, 60/40, or whichever proportions you agree between you. Your respective shares in the property will pass in accordance with the terms of your wills. If you decide to own a property as tenants in common it is therefore extremely important that you consider putting a will in place.

Declarations of Trust

Declarations of Trust are very useful documents when two or more people buy property jointly together. The Declaration of Trust will set out each owner’s share in the property. It also sets out the rights and obligations of each owner in relation to the property, for example, relating to payment of outgoings and mortgage contributions.

The Declaration of Trust can detail how the property’s open market value should be determined in the event of any disagreement. The proceeds of sale of the property would then be distributed to the owners in the shares as recorded in the Declaration of Trust.

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