There are two ways in which you can jointly own a property: as tenants in common, or as joint tenants. How you hold your joint property affects how to deal with it after one co-owner dies. 

Tenants in Common

As tenants in common, co-owners own specific shares of the property. For example, a couple may choose to have 50% each, or if one has contributed more to the purchase price they can agree on different shares. Each owner can leave their share of the property to anybody they want. When they die, their share in the property will pass in accordance with their Will. In the absence of a Will, it will pass under the intestacy rules.

This means that the person living in the property will not necessarily inherit it, and they may have to leave so that it can be sold.

Whenever you hold property as tenants-in-common there will be restriction on the title, known as a Form A restriction.  That restriction effectively stops a surviving co-owner from selling the property on their own. This often leads to the common assumption that you will need a Grant of Probate to sell property when there is a sole surviving owner and a form A restriction. Even though your deceased co-owners name may well still appear on the title, this assumption is not correct.

As the property’s remaining sole legal owner, you do have the ability to sell it by appointing an additional trustee in place of the deceased owner to give a good receipt for purchase monies. This is known as overreaching. If overreaching takes place, then on completion of the sale the surviving owner and additionally appointed trustee will hold the deceased’s share of the sale proceeds in a trust.

It is critical that whenever property subject to that Form A restriction is sold, the sellers take time to understand the true underlying beneficial interests. In the case of a deceased co-owner, their share of the property will need to be transferred to their personal representatives in order that it can be distributed as part of their estate.

If you own your home as tenants in common, it is therefore vital that you have a Will, as this is the only way to ensure your share of the property is passed to the person of your choosing on your death.

If the proceeds of the sale are not distributed correctly, the sellers (being the surviving legal owner and their appointed co-trustee) can be sued for breach of trust and will be personally liable to make good any proceeds that were incorrectly distributed.

Joint Tenants

As joint tenants, each person owns the whole of the property with the other. If one co-owner dies, their interest in the property automatically passes to the surviving co-owner(s). This is the case, even if the deceased left a Will leaving all of their assets to someone else, because a joint tenancy interest in a property passes by the right of survivorship and not via a Will. Technically, there is no transfer of the deceased’s share to the surviving joint tenant, as the latter’s share never was separate from the deceased.

Does the Land Registry need to see a Grant of Probate?

The Land Registry will require a certified copy of the death certificate to amend the Register after the death of a joint tenant, however they will not ask for a Grant of Probate – although this may still be needed for other assets that the deceased may have held. It is a common and incorrect belief that the Land Registry will require a Grant of Probate to amend the Register after the death of a co-owing tenant-in-common. The only time a Grant of Probate is ever needed to deal with the title to a property is when a sole owner dies.

Difference between Legal and Beneficial Ownership

A legal owner is the person who holds the legal title to the property under their name. The legal owner is the person registered at the Land Registry, or if the property is not registered, it is the person named on the last conveyance. However, the legal owner may not be the same person as the beneficial owner. The beneficial owner is the person with the right to use/occupy the property (without paying for it), the right to enjoy any income derived from the property, and the right to receive the sales proceeds of the property. For the most part, the legal and beneficial owners will be the same, however sometimes they can be different, and this is often the case when a Form A restriction appears on the title after the death of a co-owing tenant-in-common.

If you have any queries about ownership following the death of a co-owner or the administration of estates generally, please get in touch with a member of our Wealth Management team on 01494 521 301.