Key Post Joint tenancy vs. tenancy in common

[Brendan Burgess]

In another thread, MF1 asked me if co-owners of a house were joint tenants or tenants in common. I didn't know and I have only a hazy understanding of the implications. As it's been in the news recently, it would be useful to have a key post or FAQ on the topic.

Are the following key points correct?

Joint tenants own the entire property between them.
Tenants in common each own their own bit of the property e.g. A owns 70% and B owns 30%

On death
In a joint tenancy, the survivor inherits the entire property, irrespective of the will.
In tenancy in common, B's 30% goes to the estate.


A tenant in common can sell their share of the property without consulting the other.
A joint tenant cannot sell their share of the property without the consent of the other.


How does one know if one has a joint tenancy or a tenancy in common?
If Johnny and Mary buy an investment property together, is it specified somewhere what type of tenancy it is? If they don't specify it, is it automatically one or the other?

If Daddy leaves Paddy, Ann and Tom the family home in his will, is it automatically one or the other? Can they choose or change the tenancy?

Do marriage and the Family Home Protection Act override the type of tenancy?

Are there other major issues which arise which should be covered in a Key Post?

 

[mf1]

Are the following key points correct?

Joint tenants own the entire property between them.
Correct.

Tenants in common each own their own bit of the property e.g. A owns 70% and B owns 30%
Correct.


On death
In a joint tenancy, the survivor inherits the entire property, irrespective of the will.
The property passes outside the deceased's estate - it is not covered by the will. It does not form part of the deceased's estate.


In tenancy in common, B's 30% goes to the estate.
Correct.


A tenant in common can sell their share of the property without consulting the other.
A joint tenant cannot sell their share of the property without the consent of the other.

The 2009 Act has made changes- so that a joint tenancy can be severed but I don't know enough about it.

This link has more detailed information:
http://www.lawyer.ie/property/tenancies

How does one know if one has a joint tenancy or a tenancy in common?
If Johnny and Mary buy an investment property together, is it specified somewhere what type of tenancy it is? If they don't specify it, is it automatically one or the other?

It should be part of their conversation when buying and when talking to their solicitor. It should be written in to the Deed - their title document.

If it is not specifically stated, it comes down to what their intention was. If they are husband and wife or civil partners , there may be an implied intention that it was their intention to benefit each other. It would be less obvious if they were siblings. It would be unlikely if they were just friends or business partners.

It usually becomes a problem when (a) they fall out or (b) one dies and it is not specified.

If Daddy leaves Paddy, Ann and Tom the family home in his will, is it automatically one or the other? Can they choose or change the tenancy?

It should be stated. Over the years, I've encouraged testators to be specific about what their intentions are. You would be amazed at the number of people who do not want to be clear for fear of offending their offspring.

Do marriage and the Family Home Protection Act override the type of tenancy?

Not really. If A marries B who has a joint tenancy with C and A and B move in to the house it becomes a family home. But A does not necessarily acquire any interest in the property.


mf

 

[Brendan Burgess]

Are there any CAT implications for the different types of ownership as suggested in this thread:

Tax implications for couple buying together with different deposit amounts?

 

[mf1]

Are there any CAT implications for the different types of ownership as suggested in this thread:

Tax implications for couple buying together with different deposit amounts?

Yes - in simple terms.

If the parties are married or Civil Partners and one dies, any property, held in joint names as joint tenants, passes to the survivor with no CAT payable. And no need for a Grant of Probate. If the property is held as Tenants in Common , in the same scenario, the deceased's share passes as per their will.

Where unmarried people hold property together and one dies, CAT ( depending on value) may be payable by the survivor - if they inherit, and whether the property is held as Joint Tenants or Tenants in Common.

Is there a misperception that no CAT arises for unmarried joint owners if they hold property as Joint Tenants, perhaps? It is still an inheritance.

mf

 

[trojan]

Unless a property is an investment is it not difficult for one party to sell their share in a tenancy in common in that a buyer might not wish to have to deal with on an ongoing basis with the other party?

 

[Brendan Burgess]

Hi mf

Maybe I phrased my question badly. The following seems to be a correct statement:

"It does not matter for CAT purposes if you hold property jointly or as tenants in common.

If you are married or in a civil partnership, there is no CAT payable anyway.

If you are not married or in a civil partnership, it is subject to the normal CAT treatment - it doesn't matter if they are joint owners or tenants in common."