Professional negligence solicitor, Emma Slade examines the pitfalls of joint ownership and the important legal distinction between a Joint Tenant and a Tenant in Common.

There seems to be a natural presumption between co-habitees that, when they purchase a property, their contributions to the purchase, running and maintaining the property will be properly reflected in the division of funds when they split up. Unfortunately, the law is not quite so simple. There is a plethora of case law which has dominated the last forty or so years, in which judges have attempted to come up with sound and fair guidance on how to deal with this sort of situation. It would not be unfair to suggest that this effort has not been entirely successful.

But the uncertainties of the complex case law can largely be overcome if the matter is properly discussed between the parties when they purchase the property, with their solicitor playing a key role in this.

Conveyancing solicitors tend to send a standard letter to their clients at the outset of a conveyancing transaction, asking the client how they want to hold the property. Joint tenants? Tenants in common? The letter will probably go on to explain the difference between the two. Very simplistically, if the property is held as joint tenants, there is an automatic right of survivorship so if one party dies, the property goes to the survivor. If held as tenants in common, the property is held in stated shares and on death the owner’s share in the property will pass in accordance with their Will.

Many co-habitees purchase property when their relationship is strong and sound; neither of them anticipate (or want to anticipate) the possibility of the relationship breaking down. Desiring to do the best for their loved one, they tend to plump for holding the property as Joint Tenants. Unfortunately, what the ‘standard letter’ from the conveyancing solicitor tends not to explain is that if the property is held as joint tenants, even if there have been unequal contributions to the purchase price, if the parties break up, the proceeds of sale will be split 50-50.

Some solicitors may go a bit further in their ‘standard letter’ and explain about having a formal declaration of trust between the parties to reflect any unequal contributions but I am afraid to say that in my experience, by the time the Client has waded through all the legalese, the eyes have glazed over and they just hope the solicitor will act in their best interests.

After all this, if there is a problem at a later stage, is the solicitor negligent? The solicitor will probably point to the ‘standard letter’ and say that he has given the advice, but is this ‘standard letter’ sufficient?

Not really, no.

Although the solicitor may have explained the difference between a Joint Tenancy and Tenancy in Common and may even have raised the possibility of a Declaration of Trust, I believe this is insufficient. Indeed, ‘The Conveyancing Handbook’ – the conveyancers’ bible and the standard by which a reasonably competent conveyancing solicitor will be judged by – says:

  • “The solicitor should explain the different methods of co-ownership to the clients in language appropriate to their level of understanding”
  • “[The solicitor] should advise as to the most suitable type of co-ownership to meet the particular situation”
  • “It may be necessary to advise each party independently about their rights in the property to be purchased”
  • “If there is evidence that the purchase is a joint acquisition….the client(s) should be advised….to record their arrangement in a trust deed”

The solicitor’s duty goes above and beyond simply sending a standard letter. The solicitor should be providing tailor-made advice to both clients, independently, about how the property should be held and, particularly in situations where there are unequal contributions, should be discussing the possibility of a Declaration of Trust to set out the arrangements. Importantly, the solicitor should be having an eye to the future and what will happen if (or, more cynically, when) the parties split up in the future.

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