Tenants in common is a legal arrangement where two or more parties share the ownership rights in property or a parcel of land. How the property is divided up between the parties depends upon personal circumstances. This can result in the property being split up into equal or inequal shares, depending on what is agreed upon.

Tenants in common is just one type of shared ownership, alongside Joint Tenancy and Tenancy by Entirety.

But can a tenant in common force a sale? Can tenants in common reduce inheritance tax? And what are the pros and cons of tenants in common?

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Can a tenant in common force a sale?

As each tenant in common owns certain shares within the property, if one tenant wanted to sell, they could force a sale by petitioning a court. When you decide to apply for sale the courts can award you the following orders:

  • Order a sale

  • Order a sale but suspend the order for a short period of time

  • Refuse a sale

  • Refuse a sale but make an order regulating the right to occupy the property

  • Partition the co-owned property (this is rare)

Can a joint tenant force a sale?

If you are a joint tenant, then you will be unable to force a sale, unless you first apply to sever the joint tenancy. After you have severed the tenancy, you will be able to apply to the court for an 'order for sale'. By severing the tenancy, you become tenants in common.

Is tenants in common the same as joint tenancy?

A joint tenant has equal rights to the whole property whereas with tenants in common, each tenant will hold a different share of the property. Below, we take a look at some of the similarities and differences between joint tenants and tenants in common.

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Joint Tenants Vs Tenants in Common, What's the Difference?

Whilst joint tenants and tenants in common are often confused, they are very different. Below we take a look at some of the key differences between the two:

IssueJoint TenantsTenants in common
Division of ownership- Each tenant has equal rights to the joint property- Each tenant has a different share in the property
All in agreement-Yes- Yes
Can shares be left to anyone in a will?-In the tragic event of death, the shares will be transferred to the other owners- Yes
Joint mortgage- Yes- No, but many lenders will reject splitting the mortgage this way

What is the advantage of being tenants in common?

As with any buying option, there are pros and cons. Below we take a look at the advantages of purchasing a property as tenants in common:

Control

The decision of who will inherit your property falls squarely on your shoulders. Because of this, tenants in common are an option that is well suited to people who have children from another marriage, siblings, business partners, and unmarried couples. This is because these people are less likely to want their co-owner to inherit their property.

Freedom

As you can decide what share of the property each tenant gets, it reflects the amount that each party has put into the deposit or bills.

Protection

The amount you have invested and your interest in the property will be protected.

Security

As a tenant in common, you will be able to sell your share of the property without the other tenants consent. If you have a relationship that is unstable this may be an option you wish to explore. Should you and your partner split up and you have a joint tenancy, one party cannot sell without the other's consent.

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What are the disadvantages of tenancy in common?

Now that we have looked at the advantages of being tenants in common, we can now look at the disadvantages it can bring.

Difficulty

If you take out a joint tenancy, it is simpler and you do not have to spend time working out the shares.

Sale

If one of the tenants dies and they do not have a will in place, then the property will go through the probate process. The probate process can be very costly and timely, so your children then they may not receive your inheritance quickly.

Probate

If you are part of a married couple, then there is no real advantage from being tenants in common. This is because if one spouse dies, the property will be passed onto the surviving spouse regardless.

Forced sale

Should one of the tenants wish to sell, but the other co-tenants disagree then the co-owner can serve a partition action. This can result in the other tenants having to sell, even if they do not want to.

Dispute

In the tragic case of the death of one of the tenants, then there is the potential for dispute between the deceased joint owners surviving family and the remaining co-owner.

What happens when one of the tenants in common dies?

Unlike with joint tenants, in the tragic circumstance that a tenant in common dies, their shares will not pass over to the other tenant/tenants automatically. Instead, they will pass through the deceased will or will abide by the laws of intestacy. This would mean if a husband and a wife owned property as tenants in common and the wife died leaving her shares to their son, her husband and son would then be tenants in common of the property.

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Does land registry show tenants in common?

If your property is registered, then you will be able to find out if the property owners are tenants in common because there will be a restriction registered in Section B Proprietorship register that states: "RESTRICTION: No disposition by a sole proprietor or the registered estate (except a trust corporation) under which capital money arises is to be registered unless authorized by an order of the court’. A solicitor or conveyancer will then be aware to the fact that the owners are tenants in common and one of them alone cannot sell the property.

Does tenants in common avoid care home fees?

The majority of married couples own their properties as 'joint tenants'. This means that once the first tenant dies, the property is automatically transferred to the sole tenant. If the surviving tenant should then need to go into care, the home will then be counted towards their financial assessment. By changing the ownership to 'tenants in common’ then each tenant will have their own share.

This way, tenants can change their will to say that the first tenant to die will put their share into trust for their children but allows the survivor can continue living in the property for as long as they want. Should the surviving tenant then need to go into care, only half of the property will be classed as an asset, helping to safeguard half the property.

When it comes to legal matters such as this, you should always consult a legal professional before making any decisions.

How does tenants in common reduce inheritance tax?

Whether or not you are tenants in common or joint tenants the deceased shares forms part of the estate. Inheritance tax is collected when you die from your estate. As tenants in common, the value of your share will be added to the total value of your estate. As you own a share, it is likely that the amount will fall under the inheritance tax threshold, meaning that your designated beneficiary will have no inheritance tax to pay.

Is tenants in common a good idea?

Whether or not tenants in common are a good idea depends upon your personal circumstances. If you are a married couple who are looking to avoid inhetritence tax or care home fees, then it could be an option worth exploring. But tenants in common is not a living option suited for everyone, so you should always seek the approppriate legal advice.

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Alexandra Ventress

Alexandra is a Content Producer who enjoys writing articles, finding out about the property market, keeping you up to date with the latest trends.

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