When buying a property with someone else, one of the crucial decisions you’ll need to make is how to hold the property. You will be asked to decide between holding the property as beneficial joint tenants or tenants in common, in equal or unequal shares. For a detailed explanation of the differences between the two, I suggest reviewing my colleague, Marie Moore’s, article – The Difference between Joint Tenants and Tenants in Common.
Many individuals opt for joint tenancy when owning property, a choice not to specify equal or unequal shares in ownership. Regrettably, when relationships or partnerships break down, property owners may find themselves in a situation where they either need or desire to alter this type of ownership and ascertain their rightful share. Fortunately, it is possible to do so, and this would be known as “Severance of Joint Tenancy”.
It is important that should you wish to, you are aware of your options.
Ideally, both owners will be in agreement with the severance. In such cases, the application must be submitted by all registered owners. Two owners will therefore unanimously agree to the severance, and a joint application can be made to sever the tenancy. This requires both owners to engage a conveyancer jointly to formalise the process.
Recognising that circumstances may be challenging, in some instances, reaching an amicable agreement on the severance may not be possible, or one of the owners might be facing health challenges that hinder their participation in the proceedings. In this instance, your conveyancer would suggest that you issue a ‘Notice of Severance’. Commonly, the Notice should be sent by registered post, to the co-owner at their last known place of business or home.
In cases where one of you decides to unilaterally sever the joint tenancy and hold as tenants in common, this would be on the basis that you would own 50% each and this will not consider what contributions were made at the time of purchase.
Before your conveyancer proceeds in making any application of this nature, they must ensure that they have an original or certified copy of the Notice of Severance and a signed acknowledgement of receipt by the other registered proprietors. Where this is not possible, your Conveyancer must confirm that the Notice was sent by registered post, or recorded delivery and that it has not been returned undelivered.
Once your Conveyancer is satisfied that the appropriate steps above have been taken, with your permission, they will prepare a SEV Form (Application to enter a Form A restriction on severance of joint tenancy by agreement or notice). Once the application has been processed and completed, the Land Registry will update the title deeds to show that the property is held as Tenants in Common and a restriction will be entered onto the title deeds stating the same.
It is worth noting that once the Notice has been served, the joint tenancy in effect has been severed. To formally complete the process, the application to the Land Registry must be made.
Common reasons to sever joint tenancy
- When discussing joint tenancy, the right of survivorship will often be mentioned, meaning if one of the owners pass away, the surviving owner automatically becomes the sole owner of the property. Owners may choose to ensure that their children benefit from the proceeds in the property’s future sale. Additionally, some owners seek to sever their joint tenancy to protect their property investments from potential care home fees. If one owner passes away and the surviving owner faces the possibility of entering a care home, the property’s value could be considered, making the surviving owner responsible for covering care home costs. By severing the tenancy, at least a portion of the property can be safeguarded from this possible situation.
- In a separation or divorce situation, severing the joint tenancy allows co-owners to secure their own shares. It is hoped that in doing so you can prevent prolonged conflicts and make it easier to split the proceeds when you come to sell the property.
The above are some common examples, but there are, of course, other situations where you might find it necessary to sever the tenancy.
If you’ve got questions about Tenants in Common, Joint Tenants and Severance of Joint Tenancy, please contact us.
WBW Solicitors has offices in Axminster, Bovey Tracey, Brixham, Exeter, Exmouth, Honiton, Launceston, Newton Abbot, Paignton, Seaton, Sidmouth, and Torquay.
This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.
