By Leah Caldwell | Finance & Property | November 2023

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I own half a house: what are my rights?

Navigating the complexities of co-owning a property can be challenging, especially when issues like divorce come into play. If you find yourself wondering, "I own half a house, what are my rights?" you're not alone.

This guide aims to shed light on this complex issue, outlining the types of co-ownership, your legal rights, and the paths you can take during separation or divorce.

Types of property co-ownership

Understanding the type of property co-ownership can be helpful when identifying what, if any actions, may be necessary to protect your interests in potentially complex situations like divorce. There are two common types of co-ownership in the UK: Joint Tenancy and Tenancy in Common.

Joint tenancy

In a joint tenancy, each co-owner jointly owns the whole of the property rather than any definable ‘share’; this means that, in the event of the death of one co-owner, the other co-owner/co-owners inherits the whole of the property. This is typically the default ownership model and is popular among married couples, close family members, and sometimes friends.

It offers several advantages, including legal simplicity and certain protective measures that can streamline processes like inheritance. However, it also comes with its own set of limitations and potential pitfalls.

Your property rights as a joint tenant

As a joint tenant, you have specific property rights and responsibilities that are associated with this form of ownership. Here are the key property rights and aspects of joint tenancy:

1. Ownership and responsibility: in a joint tenancy, all parties have a responsibility for the property, whether it's related to mortgage payments, maintenance, or taxes. If one co-owner stops making payments related to the property, such as mortgage repayments, the other co-owner(s) may need to cover these to avoid defaulting on their obligations and therefore risking enforcement action.


2. Right of survivorship: the most significant aspect of joint tenancy is the right of survivorship. If one co-owner passes away, their share automatically passes to the surviving co-owner(s).


3. Indivisibility: in a joint tenancy you cannot unilaterally sell or transfer your 'half' to a third party. Doing so would break the joint tenancy agreement and typically convert it into a tenancy in common, altering the legal dynamics of ownership. Additionally, the right of survivorship (referred to above) means that the other co-owner(s) inherit the property irrespective of the terms of a will.

Tenancy in common

Tenancy in common is a form of property ownership in which two or more individuals, often referred to as "tenants in common," own a share of a property together. These ownership shares do not have to be equal; tenants can hold different percentages of ownership in the property. For example, tenants could share a 50/50 split, or a 70/30, or 60/40 split in a tenancy in common agreement.

Your property rights as a tenant in common

1. Individual ownership share: In a tenancy in common, you have an individual ownership share of the property. For example, you may own 50%, or 30%.


2. No right of survivorship: Unlike a joint tenancy, a Tenancy in Common does not come with an automatic 'right of survivorship.' In the event of your death, your share will be distributed as specified in your will. If you do not have a will, your share will be handled according to the laws of intestate succession, typically passing to your closest living relatives.


3. Transferability: in tenant in common agreements, you have the right to sell, transfer, or mortgage your ownership interest in the property. However, it's essential to consult with legal professionals during the divorce process to ensure that property transfers are in accordance with the divorce settlement and applicable laws.

Speaking to a divorce mediator about your property and finances can help you and your ex-partner come to a property settlement agreement. Get in touch with our mediators today to find out more about how we can help you.

Your legal rights and responsibilities as a co-owner

As a property co-owner, you have the right to:

• Occupy the property
• Receive income generated
• Sell your share of the property

However, there are complexities and exceptions to these rights depending on your type of ownership. Your legal rights and responsibilities can differ depending on whether you are in a joint tenant, or tenant in common agreement.

1. Your right to occupy

As a co-owner (joint tenant or tenant in common), one of your core rights is to occupy the property. This right isn't merely a shared agreement between you and the other owner(s); it's a legal entitlement. You have the privilege to reside in the home, make use of its amenities, and enjoy shared spaces like the living room, kitchen, and garden.

However, in exercising this right, it is always important to consider how this will affect others in the property - most notably, any children, and the welfare of all parties should always be a paramount consideration.

Responsibilities

Your right to occupy comes paired with a set of responsibilities. If the property is mortgaged, you are obligated to contribute to the mortgage payments in a manner proportionate to your share of ownership, or as dictated by any co-ownership agreement you might have.

You're also expected to contribute to the overall upkeep of the property. This includes maintenance tasks like repairs and renovations, utilities like gas and electricity, and property-related taxes. Failure to meet these responsibilities can have consequences, including potential legal action against you.

In some cases, neglecting your share of mortgage payments or other financial obligations could prompt legal action by the mortgage lender.

Exceptions

While the right to occupy a property you co-own is a strong legal entitlement, it can be overridden or limited under specific conditions. For example, a court order may restrict your right to occupy the property in certain circumstances. This is often seen in cases involving domestic abuse or harassment, where a judge may grant one party temporary exclusive occupancy as a protective measure.

Additionally, during divorce proceedings, a court may award one spouse "exclusive use and possession" of the marital home, usually on a temporary basis. This court-ordered arrangement effectively suspends the other spouse's right to occupy the property for the duration of the order, although it does not change the underlying ownership status of the property.

2. Receiving generated income

Owning a property is not just about residency; it can also be a source of income if you decide to rent out the property. Understanding your rights and responsibilities in this context can help you navigate the financial aspects of co-ownership more effectively.

As a co-owner, you have a legal right to partake in any income generated by the property, for example if the property is being rented out. The amount you are entitled to is generally proportional to your ownership stake in the property. For instance, if you own 50% of the property, you would typically be entitled to 50% of the rental income.

Responsibilities

If you co-own a property that is being rented out, you must report your share of income generated from the property in your landlord tax returns. Failure to do so can result in penalties, back taxes, and potential legal action.

Additionally, if the property is rented out, you'll need to ensure it meets specific standards and regulations.

Exceptions

Your rights and responsibilities concerning property income can be altered or further specified through legal agreements among the co-owners. For example, one co-owner may agree to take on more of the property's maintenance in exchange for a higher percentage of the rental income.

Such agreements should be documented in a legally sound manner, usually through a co-ownership agreement drafted by a legal professional.

3. Selling your share of the property

If you co-own a property, you have the right to sell your share of the property. However, the complexities involved with selling your differs depending on whether you have a tenancy in common or joint tenancy agreement.

In a tenancy in common arrangement, you have the freedom to sell your share independently of the other owner(s). This could be to a third party or directly back to your co-owner(s). Your share is clearly defined, making it easier to liquidate that portion without affecting the other owner's share.

In a joint tenancy, selling your share is a bit more complex. Generally, the sale would require the consent of the other owner(s) because the property is considered an indivisible asset in this arrangement. The act of selling your share in a joint tenancy converts it into a tenancy in common.

Responsibilities

Selling your share of a property comes with certain responsibilities, primarily regarding transparency and fairness. You are legally required to offer your share at a fair market price. Additionally, you must disclose any pertinent information that could affect the property's value or the decision of a potential buyer. This can include anything from known structural issues or pending repairs to legal encumbrances like liens or zoning limitations.

Before selling, it's advisable to consult with a legal advisor and perhaps even get a property appraisal to determine the fair market value of your share. This can protect you from potential legal challenges concerning the fairness of the sale price.

Exceptions

In some cases, your right to sell can be constrained by legal factors. For example, if you're in the middle of a divorce proceeding, a court order may temporarily prevent the sale of the property. In a joint tenancy, the sale often can't proceed without the explicit consent of the other owner(s).

Additionally, some co-ownership agreements include a "right of first refusal" clause, which means that before selling your share to a third party, you must first offer it to your co-owner(s) at the same price. Failure to adhere to these terms could result in legal ramifications.

Property and finance mediation

In divorce cases involving property co-ownerships, property and finance mediation offers an alternative and more efficient path for reaching agreements. Unlike the often time-consuming and costly process of litigation, mediation typically provides a faster, less formal, and more cost-effective method for resolving property-related issues.

Finance & property mediators are trained in conflict resolution and can help navigate the often emotional and contentious issues surrounding co-ownership disputes.

Throughout the mediation process, the mediator doesn’t take sides but rather facilitates the discussion between the co-owners, helping clarify points of contention and suggest possible outcomes. One of the most compelling advantages of mediation is that it allows both parties to have a say in the outcome, rather than having a decision imposed upon them by a court.

What happens if you separate or divorce?

Navigating property co-ownership during a separation or divorce is undoubtedly complicated and emotionally challenging. Many people wonder what happens to the home in a divorce. Some of the most common outcomes include:

• Selling your home
• Buying the other party out
• Postponing sale
• Sharing the house

Selling your home

Selling the property is a straightforward way for each party to get their share, but it can be emotionally tough and financially uncertain. Expenses like realtor fees eat into profits, and both parties must agree on sale conditions.

Buying the other party out

One party can buy out the other if they want to keep the property. However, they'll usually need to refinance the mortgage on their own. Fair property valuation is crucial for a successful buyout.

Postponing sale (or Mesher Order)

In the UK, a Mesher Order can delay a sale for specific reasons, like waiting for children to finish school. It prolongs financial ties between parties but keeps the family home intact.

Sharing the house

Some ex-partners choose to live separately within the same home. This requires clear boundaries and a cohabitation agreement, but can help maintain family stability when finances are tight.

Speak to a finance and property mediator

Navigating property and financial issues can be complex and emotionally challenging, especially when disputes arise.

If you find yourself at an impasse, property and finance mediation can help you work towards a mutual agreement. At Mediation First, our skilled team can guide you and the other party toward an amicable agreement, without the high costs and lengthy process of going through the judicial system.

For a confidential conversation about how mediation can help resolve your property and financial matters, reach out to us today . Learn more about our finance and property mediation services to make an informed decision.

FAQs

Can a joint owner buy the full property?

One co-owner can buy out the other's share, usually after an independent property valuation. This often requires the consent of both parties, unless there's a legal arrangement in place that allows for a forced sale or buyout.

Can a joint owner of a property force a sale?

In the UK, it is possible to apply for a "court order for sale" to sell the property, especially if one party is not willing to sell. The court considers several factors like the reason for the sale and any minor children involved. The outcome of the case will depend on your situational circumstances.