First of all, it is important to understand how property can be owned when more than one person buys a property together, either as partners, civil or business, spouses or, as is becoming increasingly popular, as friends. Legally, the key elements are how property is owned, the beneficial shares which will apply, and how the property can be disposed of. The beneficial title can be held as joint tenants or tenants in common.
Before purchasing a property with another person, it is important to take legal advice so that you understand the consequences of how the beneficial holding affects you. You can find companies online who can help with this, such as Parachute Law.
The difference between joint tenancy and a tenancy in common
In a joint tenancy, co-owners are the owners of the whole property and do not own it in shares. This means it cannot be divided between them and on the death of one of them, the ownership passes to the other owner or owners. This means you cannot leave an interest in the property in your will.
On the other hand, if you are tenants in common, each co-owner has a distinct share. This form of ownership is common if it is a business arrangement or if you have contributed different shares to the purchase. As a tenant in common, you can dispose of your interest, for example in your will.
How to sever a joint tenancy
You can act alone to sever the joint tenancy, or you can do so by mutual agreement or by mutual conduct. The most common form of severance of joint tenancy is serving a notice of severance on the co-owner or owners under the Law of Property Act 1925. Notice must be given and this must be in writing, served at the last known address of the person or business. It will be deemed served if sent by registered post and not returned.
Severing the tenancy is an important step and conveyancers should be consulted to ensure all steps are taken correctly.