Q My solicitor has asked if my boyfriend and I want to own our property as joint tenants or tenants in common. What is the difference and do I need to have a Declaration of Trust?
– JA, Okehampton
Solicitor Louise Tribble of Michelmores says:
When two or more people buy a property together, they can either hold their share in the property as joint tenants or as tenants in common. Joint tenants are classed as having an equal share in the property. On the death of one of them, their share will automatically pass to the survivor, regardless of the provisions of the deceased's will or the rules of intestacy.
On the other hand, tenants in common will have defined their shares in the property, which will not necessarily be equal. On the death of one of them, their share will pass in accordance with the provisions of any will or, if there is no will, under the rules of intestacy.
The reason that some couples prefer to own their property as tenants in common is that it can be tax-efficient.
This depends very much on the type and size of your estate. It may also be appropriate to own the property as tenants in common if, for whatever reason, the purchase price has been contributed in unequal shares and/or one of you will be solely responsible for mortgage payments.
Holding the property as tenants in common can identify and protect each co-owner's input to that property.
If you do decide to hold the property as tenants in common, then you should indeed enter into a Declaration of Trust. This will set out the contributions that you made towards the property and what should happen if one of you wishes to sell in the future. The Declaration of Trust can also include details of each of your obligations in relation to the maintenance of the property and who is responsible for mortgage repayments.
All of this needs careful consideration and if you do intend to hold the property as tenants in common it is especially important to make a will.
Q I am proposing to buy a house with some land which is subject to grazing rights. What does this mean?
– SD, Penzance
Grazing rights can take many forms. At the most informal level, it may be simply that the previous owner has allowed a neighbouring land owner to graze their animals on part of the land.
More formally, grazing rights may have been included in the property's title information documents from the Land Registry. Or there may be a written arrangement in place allowing another person to keep their livestock on the land, subject to a fee.
These all create quite different rights with different implications. A close examination of the title documents or written agreements will be necessary, and some negotiation between yourself and the person claiming the benefit of the grazing right can be helpful.
There may be ways of removing the grazing rights, but this should always be considered well in advance of exchanging contracts, so that you are aware of the potential outcome before committing yourself to buy the property.
Louise Tribble is a Property Conveyancing Solicitor with Michelmores in Exeter.
If you have any questions for Louise, please email her on email@example.com