Passing of a jointly held property on the death of a partner
When a relationship breaks down there are many issues that have to be considered and dealt with. One of the most important is the future of the property where the parties have lived, in many cases with their children. Indeed, there is a particular period after the separation, when this is of critical importance if one of the parties dies before all the arrangements have been agreed.
The different ways in which property can be owned
Most commonly, there are five different ways in which the parties may legally have owned their property, namely:-
(i) Rented in joint names
(ii) Rented in the name of only one of the parties
(iii)Owned in the name of only one of the parties
(iv)Owned in joint names as ‘tenants in common’
(v) Owned in joint names as ‘joint tenants
In each of the above situations the legal status of the surviving partner in relation to the property will be different if the other owning partner dies before issues are sorted out legally.
The immediate consequences for the surviving partner, dependent on the way the property has been owned
(i) The property has been rented in joint names
In the event of the death of one of the partners named on the tenancy agreement, the tenancy will continue in the sole name of the surviving partner until its stated end date. The surviving partner will, of course, be solely responsible for the rent and other outgoings on the property.
(ii) The property has been rented in the name of only one of the parties
In this case, there are two possibilities:-
- If the partner who dies was not named on the tenancy agreement then the tenancy will continue until its stated end date in the sole name of the legal tenant.
- Alternatively, if the partner who dies was the sole named legal tenant, then, unless the rental agreement was for a short tenancy, the surviving partner will have no security in the property. In most cases, the landlord will allow the ‘non’ tenant to remain until at least the end of the stated tenancy period provided the rent is paid. At the end of the tenancy period the surviving partner may be able to negotiate a fresh tenancy.
(iii) The property has been owned in the name of only one of the parties
- If the party who dies has been the sole owner, then the future of the property depends on a number of factors, the main one being whether or not the deceased partner left a will. If there was a will, the property will be dealt with in accordance with the terms of the will (which may find a surviving partner in a difficult position particularly if the property has been gifted to another or only in part to the surviving partner). If the owning party dies without a will, then the intestacy rules will apply and this will affect whether the property can pass to thesurviving partner.
- If the property is in the sole name of the survivor then that survivor continues as sole owner.
(iv) The property has been owned in joint names as ‘tenants in common’
One way in which the ownership of property can be described legally on the deeds is that the joint owners are ‘tenants in common’. In this context, the use of the word “tenants’ does not mean that the property has been held on a ‘tenancy’. It is the legal jargon describing one of the two ways in which joint owners of property can hold the freehold property.
When parties are ‘tenants in common’, it means that they each have a separate share in the property (in the case of two joint owners, this is often half each). Under this arrangement, when one of the two joint owners dies, the share of that person passes according to their will or under the Intestacy rules in the absence of a will. In the case of parties who are married or in a civil partnership, this will, in the majority of cases, mean that the property passes to the surviving spouse. However, if the party who dies has altered their will, the property may well have been left to a third party.
(v) The property has been owned in joint names as ‘joint tenants’.
The second way in which a property may be owned by joint owners is as ‘joint tenants’. (As above, the word ‘tenants’ should not be given its usual meaning). Under this arrangement, where one of the joint owners dies, the share of that deceased owner passes automatically to the surviving owner.
Where there is a breakdown in a relationship between partners who own their property as joint tenants, one of the parties (or even both of them) might not want the automatic transfer of their share to the survivor. In that event, it is very important that immediate action is taken to alter the legal way in which the property is owned. This can be achieved by a comparatively simple procedure.
It will be seen from the above that when an important life-changing event occurs, such as the breakdown in a relationship, advice should be sought quickly to decide whether or not any action needs to be taken to protect the ownership of interests in property. These are technical and complicated matters on which legal advice is required.
If you or anyone you know, are affected by the issues raised above and would like more information or some preliminary, confidential advice, please contact one of our experienced experts in our family team.