Legal English – Peter’s Pills – Lesson 118 – Real estate co-ownership (1) – Joint tenancy

Real estate co-ownership (1) – Joint tenancy

Transcript:

How is property held[1] in England when it is purchased by multiple people?

The legal estate[2] – that is, the formal ownership of land recognised by law and held by the registered proprietors with the power to deal with the property – can only be held as a joint tenancy. Joint tenancy means that the legal title is indivisible and cannot be split[3] into shares or percentages. Each co-owner[4] does not own[5] a separate share but is treated by the law as owning the whole (100%) together with the others.

As a result, a trust of land arises[6] automatically. The registered owners hold the property as trustees for themselves and any other beneficial owners.

So if John and Mary buy a home together, they each hold the legal estate as a whole[7] (100%) and are both trustees and beneficiaries under the trust which is automatically created.

Under English law, a maximum of four persons may be registered as legal owners. Minors cannot be registered. This statutory limit ensures that conveyancing[8] remains workable[9]. This means that properties do not remain unsold or difficult to deal with for many years because co-owners cannot reach a unanimous decision to sell. In particular, when the property is sold, if payment of the purchase price is given to at least two trustees the law allows the buyer to take the property free of any beneficial interests. This means all the others involved cannot challenge[10] or prevent the sale.

If property is held as a joint tenancy, the right of survivorship[11] applies. This means that on the death of one co-owner, their interest passes automatically to the surviving co-owners, outside the deceased’s will[12] or the rules of intestacy[13]. In this sense, there is no succession: the survivors are treated as having always owned the whole (100%) and therefore there is nothing to inherit. The property is already wholly[14] theirs.

Where more than four people acquire property, for example, six buyers, only four can be registered as legal owners (trustees). The remaining persons hold only a beneficial interest under the trust. If one of the legal owners dies, the legal title remains vested[15] in the surviving trustees by survivorship. If the beneficial interest is also held as a joint tenancy, the deceased’s beneficial interest will pass automatically to the surviving co-owners.

For example, if Anne, Brian, Charles, Daisy (a minor), Edward and Fiona acquire a property together, only the first four adults (i.e. Anne, Brian, Charles and Edward) can be registered as legal owners. Daisy cannot be registered because she is a minor, and Fiona cannot be registered because of the four-person limit. However, all six may hold a beneficial interest, i.e, they are beneficiaries of the property and are entitled[16] o any use or income derived from it. If Charles dies, the legal title remains with Anne, Brian and Edward. If the beneficial interest is held as a joint tenancy, Charles’s interest will pass automatically to the surviving co-owners.

In the next Peter’s Pills another form of co-ownership called “tenancy in common” will be discussed, but until then, thank you very much and see you next time for more Peter’s Pills to improve your Legal English!

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Note

[1] Held – detenuta

[2] Legal estate – titolarità legale

[3] Split – suddiviso

[4] Co-owner – comproprietario

[5] Own – possiede

[6] Arises – sorge

[7] As a whole – per intero

[8] Conveyancing – trasferimento di proprietà

[9] Workable – attuabile

[10] Challenge – contestare

[11] Right of survivorship – diritto di accrescimento

[12] Deceased’s will – testamento del defunto

[13] Rules of intestacy – regole della successione legittima

[14] Wholly – interamente

[15] Vested – conferito

[16] Are entitled – hanno diritto

Read more about joint tenancy and tenancy in common here: “Co-ownership of real property” (.PDF).