Severing A Joint Tenancy
When you buy a property whether paying cash outright or with the help of a mortgage. The process of conveyancing takes place to convey the property into your ownership and register this with the Land Registry.
The Land Registry is the government department created in 1862 to register the ownership of land and property in England and Wales.
Types of Property Ownership
The three types of ownership that are commonly registered with the land registry are:-
- SOLE OWNER
- JOINT TENANTS
- TENANTS IN COMMON
Joint tenant or tenant in common is only applicable if there is more than one owner of the property.
If your not sure on the basis on which you own your property and can’t find this information from the documentation you have relating to the purchase of your property, then you can find out online via the land registry website. The current cost for this is £3.00.
If you are the only owner of your property then your property ownership status would not be classed as either Joint Tenants or Tenants in common. You are simply classed as a sole owner because no other parties are involved.
If you own property on a Joint tenants basis (with another person), this means that you own the whole of the title to the property jointly and if one of you dies the other automatically becomes the sole owner of the whole property.
Even if a joint tenant has made a Will that leaves a gift of their share of the property to someone other than their co-owner. This gift in the will fails because legally, the remaining owner will automatically become the sole owner of the property on death.
Tenants In Common
If you own property on a Tenants In Common basis, this means that you each own a specific share of the property. These do not necessarily have to be equal shares like 50/50 as long as it adds up to 100% of the property. For example, it could be owned on a 40% and 60% basis.
When one of the owners dies their share DOES NOT automatically pass to the other owner but instead will pass to whoever they have gifted their share to in their will. If there is no will, the share will pass according to the rules of intestacy.
SEVERING A JOINT TENANCY
When looking to make or update your Will. It is also very important to carry out effective Estate Planning to ensure you are protecting your estate from potential care home fees and inheritance tax liabilities and also to protect your future bloodline.
Often a key part of estate planning is making sure that joint owners are changed to tenants in common, ensuring that each has a distinct share of the property that can be left to trust in your Will.
If after checking your current tenancy status you find that it is on a joint tenants basis and need it to be tenants in common, you will need to carry out a ‘severance of tenancy’. This is often referred to as a deed of severance.
By severing a tenancy you are not changing who owns the property. You are only changing the manner in which you own the property. In order to carry out a severance, you need to complete and sign a Deed of Severance that confirms that you intend to own the property not as joint tenants but as Tenants In Common.
I recommend that you get this done professionally by an Estate Planning Consultant or a Solicitor.
If your property is registered with the land registry then the Deed of Severance is sent to them and they will enter the appropriate restriction on the title to indicate a tenancy in common.
If however your property is not registered the Deed of Severance does not go to the Land Registry as they will have no record of the Title as it isn’t’ registered. In this case, the deed of severance needs to be placed with the Title Deeds of the property, this ensures that whoever looks at the Deeds can see that the property is owned on tenants in common basis.