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Tenant?, I am the Owner!
Under English Land Law, there are two types of property ownership, legal ownership and beneficial ownership.
Legal ownership is fairly easy to establish, as where the property is registered at H M Land Registry the legal owners of the property are those registered in the Proprietorship Register and where the property is unregistered (which is very rare in London) it will be the legal owners to whom the property was transferred in the last legal transfer document which is called the Conveyance which is where the term “conveyancing” originated from.
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Tenant?, I am the Owner!
Under English Land Law, there are two types of property ownership, legal ownership and beneficial ownership.
Legal ownership is fairly easy to establish, as where the property is registered at H M Land Registry the legal owners of the property are those registered in the Proprietorship Register and where the property is unregistered (which is very rare in London) it will be the legal owners to whom the property was transferred in the last legal transfer document which is called the Conveyance which is where the term “conveyancing” originated from.
Beneficial ownership, is the right to reside in the property and the right to the income or proceeds of sale derived therefrom. In most circumstances, the legal owners and the beneficial owners are one and the same person or persons.
Where however the legal owners and the beneficial owners are not the same persons this would give rise to a trust scenario, which may or may not have been created in writing. For example, where executors of a deceased estate hold the deceased’s property in trust for the next of kin. They will be the registered proprietors of the property but the next of kin will be the beneficial owners and entitled to the income from the property or indeed occupy the same.
The legal speak to describe the two types of ownership refer to the word "tenancy", as the heading of this article states but this has no relevance to tenanted properties and is historical. Where two or more persons purchase property together they can own it in one of two ways and that is as joint tenants or tenants in common.
Joint Tenants
Two or more people being registered as the legal owners of the property as beneficial joint tenants results in those persons owning the property jointly and acting together as a single owner for the purposes of ownership, mortgage or sale. There are no specific shares in the property and if one or other of the joint owners dies then the other owner will take their interest in the property automatically. This is usually the favoured option for married couples.
The joint tenancy ends, when the property is transferred to a single owner by sale or otherwise, the tenancy is converted into a tenancy in common (see below) or the last joint tenant inherits all the interests of the other joint owner or owners.
Tenancy in Common
Again, the registered proprietors of land as tenants in common hold the property jointly but can stipulate that they own shares in that property in different amounts. A tenant in common can deal with the share in the property separate from the other owners and upon death can dispose of the share to a beneficiary by Will or the share will pass under the rules of intestacy if there is no Will. This is the favoured option for unrelated Investors.
A tenancy in common will end when the property is sold as a whole, the tenancy is converted to a beneficial joint tenancy (see above) or one tenant in common acquires all the shares of the other tenants in the property.
In each of the above ownership circumstances, the type of ownership may be recorded in a separate document, usually the transfer or conveyance of the property or by a separate trust deed. Both types of ownership will be recorded in the simplest form at H M Land Registry.
It is most important that your Solicitor or Conveyancer fully informs you of the various forms of ownership that is open to you when purchasing a property jointly or together with others and for detailed instructions to be taken at the time of purchase and set out in an appropriate document or trust deed as it is difficult to change at a later date without the agreement and co-operation of all parties.
Mark Gawor is Senior Partner at Gawor & Co
Solicitors Wapping, London E1,
020 7481 8888
www.gawor.com
Tenant?, I am the Owner!
Under English Land Law, there are two types of property ownership, legal ownership and beneficial ownership.
Legal ownership is fairly easy to establish, as where the property is registered at H M Land Registry the legal owners of the property are those registered in the Proprietorship Register and where the property is unregistered (which is very rare in London) it will be the legal owners to whom the property was transferred in the last legal transfer document which is called the Conveyance which is where the term “conveyancing” originated from.
Beneficial ownership, is the right to reside in the property and the right to the income or proceeds of sale derived therefrom. In most circumstances, the legal owners and the beneficial owners are one and the same person or persons. Where however the legal owners and the beneficial owners are not the same persons this would give rise to a trust scenario, which may or may not have been created in writing. For example, where executors of a deceased estate hold the deceased’s property in trust for the next of kin. They will be the registered proprietors of the property but the next of kin will be the beneficial owners and entitled to the income from the property or indeed occupy the same.
The legal speak to describe the two types of ownership refer to the word "tenancy", as the heading of this article states but this has no relevance to tenanted properties and is historical. Where two or more persons purchase property together they can own it in one of two ways and that is as joint tenants or tenants in common.
Joint Tenants
Two or more people being registered as the legal owners of the property as beneficial joint tenants results in those persons owning the property jointly and acting together as a single owner for the purposes of ownership, mortgage or sale. There are no specific shares in the property and if one or other of the joint owners dies then the other owner will take their interest in the property automatically. This is usually the favoured option for married couples.
The joint tenancy ends, when the property is transferred to a single owner by sale or otherwise, the tenancy is converted into a tenancy in common (see below) or the last joint tenant inherits all the interests of the other joint owner or owners.
Tenancy in Common
Again, the registered proprietors of land as tenants in common hold the property jointly but can stipulate that they own shares in that property in different amounts. A tenant in common can deal with the share in the property separate from the other owners and upon death can dispose of the share to a beneficiary by Will or the share will pass under the rules of intestacy if there is no Will. This is the favoured option for unrelated Investors.
A tenancy in common will end when the property is sold as a whole, the tenancy is converted to a beneficial joint tenancy (see above) or one tenant in common acquires all the shares of the other tenants in the property.
In each of the above ownership circumstances, the type of ownership may be recorded in a separate document, usually the transfer or conveyance of the property or by a separate trust deed. Both types of ownership will be recorded in the simplest form at H M Land Registry.
It is most important that your Solicitor or Conveyancer fully informs you of the various forms of ownership that is open to you when purchasing a property jointly or together with others and for detailed instructions to be taken at the time of purchase and set out in an appropriate document or trust deed as it is difficult to change at a later date without the agreement and co-operation of all parties.
Mark Gawor is Senior Partner at Gawor & Co
Solicitors Wapping, London E1,
020 7481 8888
www.gawor.com