When two or more people purchase a property together, they can choose to live as tenants in common or as joint tenants. Joint tenancy affords benefits to those with an equal interest in the property including the right to survivorship which means that if any of the parties were to pass away, their shares in the property would be equally divided among the other surviving owner(s).
In contrast, a tenancy in common is typically used when the property owners have unequal shares in the property and would not wish for their share to be automatically distributed among their co-owners in the event of their passing, instead opting for it to be distributed in accordance with their will or intestacy law.
It is possible for two or more people to purchase a property on a joint tenancy and later decide to change to become tenants in common. This is known as a severance of joint tenancy
How to sever a joint tenancy
1. Deed of Severance
All parties may sign a deed of severance in the presence of a lawyer such as Parachute Law to convert the joint tenancy to a tenancy in common.
2. Mutual Agreement
If all parties agree to convert the joint tenancy into a tenancy in common, they should write a formal agreement to that effect which is signed and dated by all parties.
3. Unilateral Action
If one party acts in a manner inconsistent with joint ownership, it may trigger a unilateral severance of the joint tenancy.
Do all parties need to agree to sever a joint tenancy?
The severance of joint tenancy is something that should be agreed upon by all parties and will certainly simplify legal proceedings. There is usually a pressing reason for the change and, in most cases, mutual agreement is already in place prior to enacting legal action. In rare circumstances where one or more owners do not consent to the change, a lawyer will need to serve them a notice of severance in accordance with the Law of Property Act 1925.
