Beneficial Joint Tenants Or T. In Common

[jeffrey]

BJTs and TICs: what do these phrases mean?

1. Legal ownership held by more than one person is ALWAYS joint. They are deemed trustees- see Conveyancing Forum on TRUSTEES- BASICS AND LIMIT ON NUMBER.

2. When one joint owner dies, the survivors take the whole ownership- and so on, until the last survivor takes solely.

3. However, there are two distinct ways to hold the equitable (=beneficial) ownership.

4. BENEFICIAL JOINT TENANCY means that the same survivorship rules apply to the equitable interest. No-one can, for instance, give/sell (or bequeath by Will) a "share" in the property- there aren't any shares.

5. TENANCY IN COMMON is the alternative. It can be expressly created (by Deed, on acquisition or subsequently) or achieved by "severing" an existing beneficial joint tenancy (ie special form of Notice under s.36 of Law of Property Act 1925, served by one party on other). Each party then has a separate equitable interest (share) which can be given/sold/bequeathed independently. It is protected by an entry at HM Land Registry- usually a Restriction in form A, if title is registered. Otherwise, it is protected by an endorsement on the Deed of acquisition so as to comply with the Law of Property (Joint Tenants) Act 1964.

[sober]

Hi Jeffrey

Is there a way to have a NON-benficial owner in a joint tenancy, say an older relative, for two or three other benificial joint owners (e.g. for mortgage purposes)

In the case of TinC I have seen a parent take 1% with 3 children taking 33% each. Buth then broken relationships cause problems later. But with Joint tenancy some of that can be prevented.

Regards
Sober

[jeffrey]

Hi Jeffrey

Is there a way to have a NON-benficial owner in a joint tenancy, say an older relative, for two or three other benificial joint owners (e.g. for mortgage purposes)

In the case of TinC I have seen a parent take 1% with 3 children taking 33% each. Buth then broken relationships cause problems later. But with Joint tenancy some of that can be prevented.

Regards
Sober

Well, A/B/C/D could hold legal ownership in trust for B/C/D in equal (one-third) shares. Is that what you meant?

[sober]

Well, A/B/C/D could hold legal ownership in trust for B/C/D in equal (one-third) shares. Is that what you meant?

Yes, I think, that is what I mean.

e.g. if I could be a joint owner (but not beneficiary) of a property with two of my younger cousins who cannot get a mortgage on their own at present.

And do I HAVE to register this restriction on the deeds with the landregistry. or can we just have the deed on the side, in case we need to prove that I am not a beneficiary?

Thanks

Regards
Sober

[jeffrey]

Yes, I think, that is what I mean.

e.g. if I could be a joint owner (but not beneficiary) of a property with two of my younger cousins who cannot get a mortgage on their own at present.

And do I HAVE to register this restriction on the deeds with the landregistry. or can we just have the deed on the side, in case we need to prove that I am not a beneficiary?

Thanks

Regards
Sober
It is essential to register the restriction at HMLR in order to show what your interest is.
Otherwise. what if you died and were wrongly taxed (IHT) on a share which you didn't own?
In the Deed, you also need a clear indemnity covenant from your cousins. That will not bind the mortgagee (lender) - note: you would be a joint borrower with them - but at least you could use the clause against them if they default on payments.

[sober]

It is essential to register the restriction at HMLR in order to show what your interest is.
Otherwise. what if you died and were wrongly taxed (IHT) on a share which you didn't own?


Thanks Jeffrey

With Joint tenants, I was told that the property goes to the surviving owner and does NOT become part of the estate of the deceased - in contrast to TinC where the share does get included in the estate!

Is that not the case?

Will appreciate your view or any reference on it.
Regards

[jeffrey]

Thanks Jeffrey

With Joint tenants, I was told that the property goes to the surviving owner and does NOT become part of the estate of the deceased - in contrast to TinC where the share does get included in the estate!

Is that not the case?

Will appreciate your view or any reference on it.
Regards

What you say is true.
My point was just that there is a legal obligation to register at HMLR any restriction on proprietor's power to transfer. This also evidences that beneficial interest is not joint, so assists in avoiding unnecessary IHT demand.

[sober]

What you say is true.
My point was just that there is a legal obligation to register at HMLR any restriction on proprietor's power to transfer. This also evidences that beneficial interest is not joint, so assists in avoiding unnecessary IHT demand.

Hi Jeffrey

Thanks.

Will this be a Deed of Declaration or Deed of Trust, and can this Deed be done retrospectively, sometime after the mortgage etc are secured.

How long can one wait to register the restriction with land registry, after the first registration of the lenders charge?

Regards
Sober

[jeffrey]

The Deed declaring a trust- nomenclature not very significant- can be done retrospectively. The HMLR restriction should then be registered. If this application is at the same time as a scale fee application (eg to register a Transfer or charge), there is no extra fee.

[sober]

The Deed declaring a trust- nomenclature not very significant- can be done retrospectively. The HMLR restriction should then be registered. If this application is at the same time as a scale fee application (eg to register a Transfer or charge), there is no extra fee.

Thanks,

Can you give me an idea, how much such a deed would cost to be drawn up at a later stage and what is the fee to register it separately?

Kind regards
Sober

[jeffrey]

Thanks,

Can you give me an idea, how much such a deed would cost to be drawn up at a later stage and what is the fee to register it separately?

Kind regards
Sober

About £100-£120 + VAT (+ £40 HMLR fee, if title is already registered).

[sober]

Thanks

Regards
Sober

[jeffrey]

BJTs and TICs: what do these phrases mean?

1. Legal ownership held by more than one person is ALWAYS joint. They are deemed trustees- see Conveyancing Forum on TRUSTEES- BASICS AND LIMIT ON NUMBER.

2. When one joint owner dies, the survivors take the whole ownership- and so on, until the last survivor takes solely.

3. However, there are two distinct ways to hold the equitable (=beneficial) ownership.

4. BENEFICIAL JOINT TENANCY means that the same survivorship rules apply to the equitable interest. No-one can, for instance, give/sell (or bequeath by Will) a "share" in the property- there aren't any shares.

5. TENANCY IN COMMON is the alternative. It can be expressly created (by Deed, on acquisition or subsequently) or achieved by "severing" an existing beneficial joint tenancy (ie special form of Notice under s.36 of Law of Property Act 1925, served by one party on other). Each party then has a separate equitable interest (share) which can be given/sold/bequeathed independently. It is protected by an entry at HM Land Registry- usually a Restriction in form A, if title is registered. Otherwise, it is protected by an endorsement on the Deed of acquisition so as to comply with the Law of Property (Joint Tenants) Act 1964.

Revised version bumped-up.