Home Move FAQ and Jargon Buster

If you are buying a property with one or more other people, there are two ways in which you can jointly own property and you must decide which of those two different ways suits you needs and circumstances best. You can decide to own the property as either Joint Tenants or as Tenants in Common.

“Tenant” in this context is NOT the same as someone renting a property.

Owning property in this way, each person owns the entire property. This means that if one owner were to die, then the surviving owner would own the property entirely. This approach is common for people who want to leave the property to each other after they die and many married people hold their property in this way.

A Will stating otherwise would not be able to override this because the property will have transferred to the survivor before a Will would come into effect. Only the survivor’s Will would then be considered as to who receives a share of the property on their death. This can mean that children from a previous relationship, will not inherit a share of the property, unless the survivor has also included them in their Will.”

Owning property in this way, each person has a share in the property. That share can be split equally (for example 50/50), or it can be split unequally (for example 75/25). You may choose to unequally split the share in the property if, for example, one person has contributed more towards the home buy than the other person.

This way also allows each person to prepare a Will deciding to leave their share in the property to someone other than the surviving co-owner. For example, leaving the share to children from a previous relationship.

You would need a formal document known as a “Declaration of Trust” in order to register your interests in the property under a Tenancy in Common. We are able to prepare this for you and there is an additional fee for this work.”

You will need to decide for yourselves between owning as Joint Tenants and Tenants in Common and which approach is best for you and your circumstances. You will need to make your decision, and provide this to us in writing, before the Exchange of Contracts. We are not able to advise you on any taxation implications relating to the options open to you.

Although in some cases such as new developments with common areas or private roads, there could be estate charges attached to a freehold property, they are not usually subject to additional fees or charges other than your usual council tax, household bills and payments to a mortgage if you have one.

Leasehold properties often carry obligations to pay service charges to a management company, and in a number of cases also ground rent to a landlord. There are also possible additional costs and legal fees if you were to apply to extend a lease down the line once you have bought the property.

Service charges, sometimes known as Estate charges are fees payable to a management company who look after the common areas around your property. If you own an apartment or flat for example, this would pay for upkeep of the lobbies and stairwells as well as any communal gardens and other common areas around your building. Some housing estates also have service charges (sometimes called estate charges) for things like maintenance of unadopted roads and pavements (where the local authority is not responsible for looking after them), play or recreation areas, grass mowing and hedge trimming on common open areas on housing estates.

Service charges are often, but not always associated with leasehold properties, where they may also be charged alongside ground rent, but this is not always the case. Many housing estates with estate or services charges are made up of freehold properties, and as a result do not benefit from the same rights and protections as for leasehold properties, so estate charges can potentially be or become expensive.

Ground rent is an ongoing cost, usually charged to the owner of a leasehold property and paid to the landlord under the terms of a lease. It can sometimes be referred to a chief rent.

Sometimes ground rent may be referred to as a ‘peppercorn’ rent which usually means that it is such a small or nominal value that in practice it is never actually demanded by the landlord, but this will not always be the case. Generally a demand for a monetary ground rent is legally required to be paid. It may also be reviewed and increased under the terms of the agreement.
Failing to pay could mean the landlord reclaims the property for failing to adhere to the agreement.

You should always refer to the lease and any other related agreements to confirm what applies to the specific property you are buying. This information will be obtained from the seller or one of the other organisations involved in ownership of the property.