Severance of Joint Tenancy

Joint Proprietors

Where property is registered, the person who is the legal owner of the property is called the proprietor and his/her name is shown on the register of the title to the property. Where there are two or more people who own the property together, they are both shown on the register as joint proprietors. They will normally hold the property in one of two ways, that is to say either as joint tenants or tenants in common. These are technical terms but their effect can be explained as follows:

• Where the proprietors hold the property as joint tenants, this means that they own the property together in such a way that, if one of them dies, his or her interest in the property passes to the other proprietor(s) automatically. No interest in the property will pass to the estate of the proprietor who has died nor can such a proprietor deal with the property in his/her will. This way of holding the property is often, but not always, used where the joint proprietors are husband and wife.
• Where the proprietors hold the property as tenants in common, they own it together, but each is treated as having a separate share in the value of the property. Typically, each tenant in common will share in the value of the property equally, according to their number; a half share if there are two; a third share if there are three, etc. However, the proportions need not be equal if the proprietors agree some other arrangement and it is possible for other people who are not shown on the register to share in the property as well. This kind of arrangement is often used where the owners have each put up money of their own to buy the property.

Severing the Joint Tenancy

Where two or more proprietors hold property as joint tenants, it is possible for them to alter the way in which they hold the property so that they become tenants in common. This will happen, for example, if one of the proprietors sells or otherwise deals with his/her interest in the property, or notifies the other proprietor(s) that he/she wants the property to be held by them as tenants in common. Where this happens it is referred to as severing the joint tenancy.

Restriction

Where property is held by joint tenants in common, including the case where the joint tenancy has been severed, the Land Registry must by law (under s58(3) of the Land Registration Act 1925) put an entry on the register, known as a restriction.

Purpose and effect of the Restriction

The purpose of the restriction is to safeguard the rights of the people who may have an interest in the property but who are not themselves proprietors (such as those to whom property has been left by a proprietor who has died). This restriction makes it clear there must generally be at least two people to share the responsibility of making sure that the money received on a sale or other dealing with the property is correctly dealt with.

With the restriction on the register you and the other proprietor(s) of the property acting together will still be able to deal with the property in any way you could before the entry was made. However, if one or more of the proprietor(s) dies, so that only one of them remains, the restriction will mean that the Land Registry will not be able to register any transfer or other dealing with the property for money. In practice this means that the remaining proprietor would not be able on his/her own to sell the property or otherwise deal with it for money, because any purchaser would not be able to apply for registration. To overcome the difficulty, the remaining proprietor would need to arrange for at least one other person to act with him/her as trustee, and become joint proprietor(s) of the property with him/her if the property were to be sold. A purchaser could then safely complete the purchase because a transfer to them would be by two or more proprietors, so that restriction would not prevent the registration of the purchaser as a proprietor.

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