Article

The rights of survivorship for joint tenants in the UK

In a recent landmark case in Singapore, the Court of Appeal ruled that a surviving owner does not have any automatic right to the
succession of a property if it was clearly not the other owner’s intention for that property to pass to them.

Could a similar situation ever occur in the United Kingdom (UK)? I will examine the types of joint property ownership in the UK and how severance may be carried out.

In the UK, if a property is jointly owned it can be held either as “joint tenants” or as “tenants in common”. It is more common
when purchasing a property for it to be conveyed into the owners’ names as joint tenants. It is possible to change from joint tenants to tenants in common at any point and vice versa.

A joint tenancy creates rights of survivorship. The result is that when one owner dies the remaining owners will automatically own the whole property. This means that a joint tenant cannot gift their interest in the property to anyone by their Will. The doctrine of survivorship takes precedence over the Will.

More flexibility with tenants in common

If property is held as tenants in common instead, each owner has greater flexibility over how they deal with their share of the property. They each have a divided share in the property. This is often an equal share, but it is also possible to hold the property in unequal shares.

This is an attractive option for people purchasing a property together who are contributing different amounts towards the deposit, or who desire to be paid different proportions of rental income from the property for income tax purposes.

Under a tenancy in common, each owner can deal with their share in the property separately, allowing them to gift their share to their own beneficiaries by their Will. This also opens up more opportunities for planning to protect their share of the property by using trusts in their Will.

For a joint owner to avoid the rule of survivorship and pass their interest in the property elsewhere, it would need to be established that they have severed their tenancy – changes from joint tenants to tenants in common. There are a few accepted methods of severing a joint tenancy:

Mutual agreement
Unilateral notice
Mutual conduct
Acting in a joint tenant’s own share

By far the most common and simplest way to sever a tenancy on a UK property is by mutual agreement of all legal owners. All owners simply agree between them to hold the beneficial interest in the property as tenants in common going forward. They should evidence this agreement in writing, usually with a Declaration of Severance. If the property is registered with the HM Land Registry, they should also then apply to enter a Form A restriction on the title by completing Form SEV.

Less common methods of severance

If one owner does not agree to the severance, then the other owner may also act alone in the severance — it can be a unilateral act. To achieve this the owner wishing to sever must serve a notice of their intention to the other owner. This must be made in writing and validly served by either handing the notice to the other owner, leaving it at their last known place of residence or business in the UK, or by sending it by recorded post and not having it return as undeliverable. The other owner does not need to acknowledge or accept the severance for it to be valid. As with severance by mutual agreement, a Form A restriction should be entered on the property title.

The much more uncommon method of severance in the UK is mutual conduct. The joint tenancy can be severed by any “course of dealing” that is “sufficient to intimate that the interests of all were mutually treated as constituting a tenancy in common” (Williams v Hensman (1861) 70 ER 862). All owners of the property must be aware of the intention. There have been rare cases where the fact the owners had written Wills dealing with their share of the property separately was enough to constitute severance.

Finally, a joint tenant may sever by acting on their own share. To do this they must carry out an act with their interest in the property that is so inconsistent with a joint tenancy as to suggest the interest is severed.

Severance by mutual conduct or a joint tenant acting on their own share should not be relied upon however, as there is potential that the Courts may rule that no severance was completed. Mutual agreement or a unilateral action is always best and safest due to the written evidence that severance was carried out.