What happens when a joint tenant dies? Is a grant of probate required? This blog will look at what ‘Tenants in Common’ means and what happens if one owner dies.
What Does ‘Tenants in Common’ Mean?
In a ‘tenants in common’ agreement, all individuals own a share of the property. However, this isn’t necessarily equal shares. The shares of each tenant are often determined by how much they have invested in the property. For example, a family could buy a house, and the children could own 25% each, with the parent owning the other 50%. It could also be that friends have purchased a property together. In these situations, a tenant in common agreement is usually used.
A tenants in common agreement is different from a joint tenancy as all owners can either sell their share of the property or leave it to a beneficiary in their will. They can, however, be a clause in the agreement that stops the owners from selling without first offering one of the other owners the chance to buy it. The tenants in common agreement should include who pays the mortgage and bills. There is often a joint account arranged for each owner to pay their share of the bills into. There are some legal requirements for the owners:
- They cannot be forced out of the property without a court order.
- No one can sell the property without the agreement of all owners or a court order.
- No loans can be borrowed against the property without all owners agreeing.
It is important to note that it is possible to add additional owners.
Tenants in Common – Grant of Probate
Examples of situations where a property is owned by tenants in common include:
Family set-ups – Perhaps parents want to help their children get onto the property ladder, or siblings want to invest together.
Couples cohabiting – Unmarried couples that live together may want to ensure they protect their share should the relationship break down.
Business partners – Business partners may wish to pass their share of the property to family.
If the person who dies has a valid will, they should have stated the beneficiaries of their shares in their will. If no valid will is in place, intestacy rules will be applied. This means that their share of the property will go to their nearest surviving relative. If there are no relatives to pass it to, it will go to The Crown.
Regardless if there is a will or not, the executor or will administrator must apply for a grant of probate, as the property share is likely to be worth more than the £10,000 limit.
contact braintree wills for professional will advice on 01376 349366.