Joint ownership – what kind of joint owner are you?

Joint ownership of property continues to be the most popular subject for people who phone “out of the blue” with questions. The enquiries come from all over the country – last Monday, it was an enquirer from Dorset; on Friday, from the Wirral.

My original post on the subject is here: joint ownership

I wrote a couple of follow-up posts: one and two

The latest question to crop up turned out to be “How can I tell whether my co-owner and I are ‘joint tenants’ or ‘tenants in common’?” – see my original post for the distinction.  It is a very good question: the answer is to look in the Proprietorship Register for the property in question, which shows who the owners are; this will not state, in so many words, that the owners are joint tenants or tenants in common, but it either will or will not include a “trustee restriction”.  The wording of this is –

“(DATE) 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.”

If this restriction appears, the owners are tenants in common – though the registers will not show in what shares, or even whether the legal owners are also the beneficial owners: these aspects are not publicly available, as they do not affect the legal title (only the beneficial title, which is private).  If the restriction does not appear then, as far as the outside world is concerned, the owners are joint tenants: they are also the beneficial owners and, if one of them dies then the co-owner(s) inherit(s) the deceased owner’s interest. (As ever with the law, this is not the whole story – as between themselves, even in the absence of a trustee restriction, the co-owners may in fact be entitled to their own shares in the property, but this is beyond the scope of this post.)

I anticipate the next question will be, “Why is it so convoluted to find out in what way a jointly owned property is held – hunting for a strangely-worded restriction, then working out what it signifies?”  The answer is that it is not, in fact convoluted – it is very logical.  The wording of the restriction says a sole surviving owner cannot sell the property on their own; if the property was owned as joint tenants, a sole surviving owner can sell the property on their own, so the restriction is inappropriate; in the case of tenants in common, the restriction is appropriate, so it is registered – automatically by the Land Registry if a transfer of property is expressed to be to tenants in common or if a joint tenancy is severed.

Because the title registers will not show any of the details of beneficial ownership for tenants in common, it is important to have a separate documents – a declaration of trust – setting these out. This declaration can be very simple – for example, merely specifying the shares in which the owners hold the property – or more complex: identifying who is responsible for which household expenses, including mortgage liability; specifying whether and how a sale can or cannot be forced; covering rights of occupation; etc.  In all but the very simplest cases, it is well worth consulting a suitably knowledgeable lawyer to prepare such a declaration.

My prospective client from the Wirral turned out not to need my help – she had contacted me for help in severing the joint tenancy of her property but, on checking the title registers, I was able to reassure her that the property was already held as tenants in common and, in her circumstances, no further action was needed.