Joint Tenancy
- Any number of people can share a joint tenancy but only the first four named own it as such.
- The fifth, sixth, etc. tenants are considered to have an equitable (fair) interest in the tenancy.
- Most members of a joint tenancy never even realise the first four are categorised separately.
- Only when a problem arises does the distinction become important to enforce tenancy rules.
- In this simple scenario a husband and wife bore 2.4 children with no children to any previous marriage and with little investments.
- They would likely buy a property as Joint tenants.
- On the death of the first, the survivor automatically inherits the whole investment irrespective of their wills.
- Their wills might mirror each other (mirror will) or they might be wildly different from each other. No matter, as far as the joint tenancy goes the last survivor gets the lot irrespective of their initial joint contributions.
- Any assets outside the joint tenancy are treated in accordance with their individual wills.
- The last to survive can bequeath both the property and separate assets (chattels) to whomsoever they wish.
- The winner (survivor of a joint tenancy) takes all! All the value of the property but not necessarily the chattels inside the house, which may be treated in accordance with any will.
- There are conditions attached to a joint tenancy called:
- 'The Four Unities':
- Unity of:
- Possession,
- Interest,
- Time and
- Term.
- What I call the PITTs. PITT.
- Unless each of these concepts is identical it is not a joint tenancy but a tenancy in common.
- Equal possession of the property (no segregations),
- Equal interests (not 50% but all own 100%),
- All tenancies commence at the same point in time and finally
- All tenancies are for the same term or duration.
- Any distinction - it is not a joint tenancy rather it would be a tenancy in common.
- Understanding "The PITTs" enables a better understanding of a rental joint tenancy.
- The only room with an en suite cannot cost more than a room without. Fair ? No way! So how do you distinguish? You don't! Never!
- However, to overcome the inequity you simply:
- add the sum of the parts and
- agree the total of the sum is payable by all as joint tenants
- then divide the total of the sum (i.e. the total rent) equally between the number of tenants.
- Simple? Not really! But it is fairer.
- Imagine a group of six joint student tenants and
- six sets of parental guarantors?
- Aha the plot thickens!
- The guarantors can, if you agree, limit the guarantee to only their child's portion of responsibility... how? do tell!
- by applying the same calculation for the same reason!
- Each Guarantor pays only one sixth, representing their child's risk. "Oh right! - I still don't really get it?"
- The phrase Joint and Several Liability now slots nicely into the portion of the brain now called, 'no brainer'.
- Unfortunately even this phrase is no longer technically correct.
- "Oh!" Under the Crystal Clear rules this is not everyday parlance and must thus be spelled out as to the implications for the tenants! E.g.
- "Everyone owes everything and anyone can be called upon to pay everything in the event the others do not."
- You think this is complicated?
- Remember, in a joint tenancy all things must be equal.
- Not necessarily so in a TiC.
- Returning to the tenancy in common all things might still be equal but it can still be called a tenancy in common!
- Why?
- Just because this was elected at the outset.
- For tax propitiousness
- For division of shares to beneficiaries.
- So why can't I elect a Joint tenancy if i wish?
- You con - but only if the 4 unities are present otherwise it is not what you call it but what it is
- (see Street and Mountford above)
- It is a Tenancy in common by default if any of the 4 unities are absent!
- Simple? I thought not.
- Ironically you can call a joint tenancy by its namesake, but it might still be a TiC.
- "Explain it another way so I understand?"
- If any of the four unities are absent is is not a joint tenancy.
- In default it is a TiC. "OK I've got it" - phew!
- Unless you revisit the definition then a year from now you will unlikely remember the distinction between TiCs and JTs. Think of it as a name: J.T. Pitt had no TiCs (burrowing worms) - this acronym will serve you well if you are a law student studying landlord and Tenant Law - Good Luck!
- Back to TiCs - Tenancy in Common example in practice
- A couple with joint investments e.g. in property, might place their jointly owned investments in a Tenancy-in-Common agreement.
- Complicated? You bet it is - at least today!
- But tomorrow when one dies it is simpler. Ooer!
- This enables their assets to be disposed of in accordance with their individual wills and this in turn will doubtless save a small fortune in tax liabilities. The survivor if a beneficiary of a will may derive a greater inheritance. Changing the subject slightly from owner to renter:
- Note - to end a rental joint AST tenancy on the due date you must issue a notice to quit at least two months prior to expiration of the tenancy.
- You must also issue each named joint tenant with an individual notice to quit.
- At Leydon lettings we back this up with an email containing the information in prescribed form advising of the postal delivery.
- It would then be difficult to argue non-receipt if received by more than one means of delivery.
Published: 11 November 2013
Last Updated: 17 November 2021