There are many reasons why you may co-own your property as tenants in common. But people often ask me what impact co-owning a property as tenants in common will have on their equity release?
If you co-own your property with another person as tenants in common, you can still get equity release. However, upon the death of an owner, your lender may restrict future changes to the plan, including access to borrowing further money.
Where properties are co-owned, the equity release application must be made in both names. One co-owner can't take equity release on their share alone.
In this guide, you will learn:
If following this guide, you have further questions regarding what equity release is and how plans work, please see our full 2024 equity release guide.
If you co-own a property in England or Wales, you can own the property as either joint tenants or as tenants in common.
Where the property is co-owned as tenants in common, a tenancy in common agreement is drawn up. This allows for two specific features that a joint tenancy does not allow:
Each owners percentage share in the property can be specified
This can be useful if the owners decide that one owner should own more than the other. An example of such a situation could be where the owners agree that the ownership share should be relational to the amount of money each owner pays towards the property.
You can Will your share to whomever you want
This can be useful where owners want to leave their estate to different beneficiaries. An example of such a situation could be where the owners have children from previous relationships which they wish to leave their inheritance.
There are also other reasons people choose to co-own properties as tenants in common.
As part of your estate and later life planning, a financial advisor may suggest that you co-own your property as tenants in common. This can allow for the property to be placed into a trust and could be used to protect assets where long term care is needed.
If you feel that you may benefit from having your property owned as tenants in common, we recommend you seek specialist advice.
The alternative to co-owning as tenants in common is to co-own the property as joint owners.
If you own the property as joint owners, you each wholely own the property.
Upon the death of an owner, ownership of the property is automatically passed to the surviving co-owner.
Upon the death of the last surviving owner, their estate is distributed according to their Will.
To find out if your property is co-owned as tenants in common, you can check the title deeds of the property. If the following restriction is listed under the "Title absolute", the property is co-owned as tenants in common:
RESTRICTION: No disposition by a sole proprietor of the registered estate (except a trust corporation) under which capital money arises is to be registered unless authorised by an order of the court.
But what if you do not know where your title deeds are?
The first place to check is if your property is registered with the land registry.
If you live in England or Wales, you can search for this information at https://www.gov.uk/search-property-information-land-registry.
If your property is not registered, you should locate the original deeds. They could be held by one of several parties, including:
- Yourself
- Your solicitor
- Your bank
- Your mortgage provider
If you are still unable to find your title deeds, they may be reconstructed. However, this can take considerable time, and cost significant money, so it is usually best to find them where possible.
Speak with your solicitor if you need your title deeds to be reconstructed.
If you live in Northern Ireland, you can also own property as tenants in common; however, there is a different land registry. You can search the Northern Ireland land registry by visiting https://www.nidirect.gov.uk/articles/searching-the-land-registry.
If you live in Scotland, co-owners as tenants in common is called joint owners. To access your title deeds, you can search the Registers of Scotland by visiting https://www.ros.gov.uk/.
Each of the previously mentioned land registry services charges a fee for accessing copies of your title deeds. As part of any equity release enquiry, we are happy to provide you with a copy of your title deeds from the land registry free of charge.
If you want us to provide copies of your title deeds from the land registry, you can call us on 0207 158 0881 or use our online form to request your free consultation.
Regardless of how your property is owned, equity release plans are designed to run until the death of the last property owner. This means that the surviving owner will always be allowed to stay in the property, and the lender cannot ask for repayment of any capital and interest before you pass away.
For co-owned properties as tenants in common, upon the death of one owner, their share of the property is left according to their Will.
Where the Will states that their share in the property is willed to the surviving owner, there is little impact on the equity release.
Where the Will states that the share is willed to another party, or parties, there are potential implications to the equity release plan. It is common for the equity release lender to:
- Remove further access to any drawdown facilities that are in place.
- Disallow any further borrowing secured against the property.
It is essential that you understand what will happen upon the death of the first borrower for the equity release plan you are applying.
We recommend that you discuss this with both your equity release adviser and also your solicitors as part of your equity release application.
What if you want access to more money following the death of an owner?
Firstly, you should discuss your requirements with your equity release adviser. They will be able to best advise on which plans allow access to certain features, and which others do not.
It may be that following discussion you decide to remove the tenants in common restriction from the title deeds. This should be carefully considered to ensure that it meets your current wishes.
If you decide to remove the tenants in common restriction from the title deeds, your solicitor is likely to be able to carry out the works for an additional fee as part of your equity release application.
Your equity release lender will require that the title deeds are amended to remove the late co-owner.
To facilitate this, the late owners Will is required to ascertain how they wished for their share in the property to be distributed. Their Will may have already been executed through probate, in which case the surviving co-owner should be aware of the late co-owners wishes.
Where the share is willed to the surviving co-owner, an equity release application can be submitted. The land registry may be updated separately to the equity release or can be carried out as part of the equity release application. Usually, we see that the applicants' solicitors can handle the work for an additional charge.
If no Will were made, the share in the property would be left as per laws of intestacy. This means that if there is a living husband, wife or civil partner, they have the automatic right to inherit. If this person is also the other co-owner, then the application can be made, and the land registry updated as already described.
If you have further questions, why not speak with one of our qualified advisors?
Call us on 0207 158 0881 or use our online form to book your FREE consultation.
While a qualified equity release advisor has written this guide, it is not intended to be used as financial nor legal advice and should not be relied upon.
To understand the full features and risks of an Equity Release plan, ask for a personalised illustration.
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