Severance of Tenancy

What is a Severance of Tenancy?

Normally, when people buy a property together, they purchase as Joint Tenants, meaning that they both own the whole of the property. When a Severance of Tenancy is setup they become Tenants in Common instead.

Becoming Tenants in Common means you each own a percentage of the property – usually 50% each but you can define the portions into unequal shares if you wish, for example, if you have put different amounts of money into the purchase of the property.

Joint Tenants

  • You have equal rights to the whole property (undivided share in land)
  • The property automatically goes to the other owner if one of the joint tenant dies
  • You cannot pass on your ownership of the property in your will to anyone other than your surviving partner in the event that you die first (if you yourself are the surviving partner, all the property goes to you and you can then transfer your share of property to anyone in your will)

Tenants in Common

  • You can own different beneficial shares of the property (for example 50/50 or 99/1)
  • The property doesn’t automatically transfer to the other joint owner if you die
  • You can transfer your share of property to anyone in your will

Why should I consider a Severance of Tenancy?

Realistically, you are doing this to protect yourself. If one of you has an affair or decides enough is enough and you want out, you ultimately will want to sell the property and if you have put in say 50k and your other half has put in 20k then its not fair and you will want your share out that you put in. It also makes sure that if you die and the property is still there, the other half doesn’t run off with all the assets and half the money can be given to family or children.

Mutual or Non-Mutual

More often than not the application is done mutually by both parties, however this is not always the case and can be done by one party alone as long as the joint owner is notified. This is useful when divorce proceedings are considered and there is a need to avoid your share of the property transferring automatically to your spouse if you should die before the financial situation is resolved.

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