
Joint ownership of property
09-07-2025 | OtherJoint ownership of property offers several benefits, such as increased borrowing power and spreading the landlord’s responsibilities, like maintenance costs. Whether the multiple ownership of property is between a spouse, a friend, or a business partner, it’s important to understand how to manage the legal and financial aspects as effectively as possible.
To maximise the benefits and follow a smooth process, joint ownership of property requires careful planning between all parties involved. In this comprehensive guide, we’ll explore the types of joint ownership and offer advice on splitting responsibilities and income. We’ll also touch on legal documents such as a Declaration of Trust.
Joint ownership of property
When setting up multiple ownership of property, all parties need to consider the two options available to them. The two types of joint ownership are joint tenancy and tenancy in common.
Joint tenancyÂ
Joint tenancy is when two or more people have equal ownership and rights to the property. This is a common option for married couples or friends who want to invest in property together. In a joint tenancy, if one partner passes away, their share will automatically transfer to the other partner involved in the joint ownership of the property.
However, this type of joint ownership does bring the potential for disputes. If one partner has invested more money or is carrying out more responsibilities than the other partner, they still have equal rights and ownership.Â
It could also get awkward. The additional flaws of this option become apparent if the married couple or group of friends split up. All parties involved need to consent to sell or refinance the property. This can be difficult and lead to a dispute if the relationship ends on bad terms.
Tenants in common
Under this situation, each person owns a proportionate share of the property. It doesn’t have to be equal. This method is standard among business partners where the majority owner needs a little bit of extra support. One person has typically contributed more financially.
However, this type of joint ownership of property can be more complicated to manage as it’s not clear-cut how much responsibility each partner has in the deal. Things can also get complex if one person decides to stop being involved in the property in joint ownership.
Practical advice for landlords considering joint ownership of property
Whether you’re new to the idea of multiple ownership of property or are experienced with the concept, it’s always good to familiarise yourself with some top tips to help get the most out of the situation.
As with anything, hurdles can arise when it comes to multiple ownership of property, so it’s best to prepare. Common problems usually involve financial aspects, landlord responsibilities, disputes and handling ownership changes.
Managing the financial aspects
Finance management and property ownership go hand in hand. Throughout the agreement, multiple aspects related to finances crop up. This starts with the mortgage and moves to deposits, maintenance costs, and bills.
Mortgage payments
Both owners should be responsible for mortgage payments, but one person might struggle to make payments in one particular month. If this happens, the other person will likely be liable. When starting the partnership, all parties need to clearly understand how the payments will be split and what happens if there is a problem. The people involved should regularly discuss financial situations so that a problem on the horizon can be identified as quickly as possible.
Deposits
Again, all parties involved in the joint ownership of property should agree on how much each person will pay towards the deposit. The amounts should be recorded in case you need to rely on them later.
Maintenance, repairs, bills and legal expenses
Landlords are responsible for many things during a tenancy, including maintenance. Landlords should outline this in the tenancy agreement document and highlight whether they will pay any bills, such as the water bill. If there are multiple owners, they must decide how they will each contribute to regular maintenance, repairs and bills. The expectations over these payments should be clarified as quickly as possible. Following a written agreement will help prevent disputes later down the line.
Another option for the owners is to open up a joint account. All parties can then contribute an agreed amount each month, and this pot is then ready to cover the payments. This will allow the landlords to fulfil their responsibilities comfortably.
Declarations of Trust
All of the decisions made above about specific responsibilities and what should and shouldn’t happen in certain circumstances must be recorded. It’s best to put them in a declaration of trust.
A declaration of trust is a legally binding document and should highlight the financial contributions of each member involved in the property in joint ownership. It should also explain how the money will be split when the property is sold. This is a list of topics which should be included:
- Amount each person has contributed to the deposit
- Amount each person will contribute to mortgage repayments
- The percentage each person owns of the property
- How much each person will get from the sale of the property
This document is absolutely essential as it provides a strong backbone should a dispute arise. It will also protect each individual member in the joint ownership as it highlights what they are each entitled to. If there is no declaration of trust in place, then it is impossible to know how much each person should get at the end of the partnership.
How to handle ownership changes of a property in joint ownership
Unfortunately, relationships can break down, or one of the parties simply wants to leave for whatever reason. This is when joint ownership of a property can become complex. There are several options available, including selling the property, or others can buy out the shares of the person leaving.
If all members in the joint ownership of property agree, they can sell the property. After completing the sale and settling outstanding costs, the owners can divide the remaining profit among themselves.
Or other people involved can buy out the shares of the person leaving. The party keeping ownership of the property might then need to remortgage or secure a new mortgage solely in their own name. The legal process involves preparing a transfer deed and resolving any outstanding financial commitments.
What happens if there is a dispute over a property in joint ownership?
There’s a chance, especially if it includes a large party, that not everyone will agree. If that is the case, then they won’t be able to sell the property. Mediation can help solve the process without costly fees and a lengthy process, but if a conclusion cannot be reached, then the case might need to go to court.
We have the expertise to find the best landlord insurance deals that are suitable for your needs as a landlord. Contact us today at 01788 818 670 for a quote, and don’t forget to visit our resource centre for more information on how to be a successful landlord.
We won't be beaten on any like for like landlord insurance quote.
Get a quote