Buying a property together – how can you protect your investment?

When a property is purchased by more than one person, you will each be a co-owner. As co-owners, you can either hold the property as Joint Tenants or Tenants in Common.

What Are Joint Tenants?

If you hold a property as joint tenants, both of you will own the whole of the property. You will not each have a specific share in the property and will not be able to leave a share of the property in your Will.

If you sell the property, it will be presumed that you both own the property equally, regardless of each of your contributions to the purchase price.

If one of the co-owners dies, their interest in the property would automatically pass to the other co-owner. The surviving co-owner would then own all the property and on their death, it would form part of their estate. This is known as the rule of survivorship. Married couples or those in a civil partnership commonly purchase property as joint tenants because the right of survivorship makes it straightforward to inherit each other’s share in the property.

What are Tenants in Common?

If you hold the property as tenants in common, each of you will own a specified share in the property. Your shares may be equal, but they do not have to be. Your share of the property can be passed on to another person on your death, either under your Will or in accordance with the rules of intestacy (if you do not have a Will). If co-owners want to hold the property as tenants in common, this can either be noted as a simple declaration in the Transfer Deed, or you can sign a Declaration of Trust. A Declaration of Trust is a document that formally records that you hold the property as tenants in common and sets out your respective shares in the property. If you sell the property, or if you separate, the Declaration of Trust will be referred to, to work out your entitlement to the sale proceeds.

Couples may choose to buy a property as tenants in common if one of them has made a larger contribution to the purchase price of the property and wants this to be recognised if the property is sold, or if one owner has a family from an earlier marriage and wishes to leave their interest in the property to them, instead of passing it to the other co-owner. This is something that you should keep under review following the purchase of a property. If you decide to hold the property as joint tenants but then wish to split your interests, you can “sever” the joint tenancy and turn it into a tenancy in common at any time. The joint tenancy may also be severed automatically in several situations, including where one co-owner becomes bankrupt.

Protecting assets in contemplation of marriage

Once you are married, a Declaration of Trust can be disregarded. At Bromleys, we recommend that you enter into a Pre-Nuptial Agreement before the marriage if the following criteria are followed:

· It must not seek to avoid responsibility for the financial needs of any children.

· Each party must disclose to the other sufficient detail of their financial position – to include any pre-existing and/or inherited wealth – and answer any reasonable questions the other may have, albeit such enquiries are rarely made.

· It should be signed at least 21 days ahead of the wedding.

· There must be no suggestion of duress, fraud, undue influence, misrepresentation or mistake before entering the prenuptial agreement.

· Each party should have independent legal advice before signing.

Prenuptial agreements are not enforceable automatically. However, they will be considered by the court when considering a financial claim.

Our dedicated Family Team are on hand to assist you with matters related to protecting your assets in marriage. Contact Keith Bull today on 0161 330 6821 or email him on to get the ball rolling.