Claims against Conveyancers
At a time where more unmarried couples are purchasing property together often with one party having contributed more to the purchase price or having children from a previous relationship, we are finding that many conveyancing solicitors are failing to give adequate advice in relation to the methods of co-ownership and the consequences of such.
There are two ways in which a property can be held by joint purchasers. These are:-
Joint Tenants
If you own a property as a joint tenant, you and your fellow joint tenant will own the whole of the property together. You will not have a specific share in the property and you will not be able to leave a share of the property in your Will. If you sell the property, or if you separate from your fellow joint tenant(s), it will be assumed that you own the property equally, regardless of the respective contributions to the purchase price and your fellow joint tenant will be entitled to 50% of the property, regardless of what contribution they made.
Reasons that you and your co-owner would not own the property as Joint Tenants
- If one person has made a larger contribution to the purchase price of the property, you may want this to be recognised if the property is sold or if you separate.
- If you have a family from an earlier marriage and want to leave your share in the property to them, instead of passing it to your fellow co-owner.
Tenants in Common
If you own a property as tenants in common, you will each have a specific share in the property. The shares can be equal, but they do not have to be. You can state the proportions that the property is to be owned in a Declaration of Trust (explained below).
Your share of the property can be passed on to another person, either during your lifetime or under your Will. If you do not have a Will at the time of your death then your share will pass in accordance with the rules of intestacy.
What is a Declaration of trust?
A Declaration of Trust is the document that formally sets out that the property is owned by you and as tenants in common and records what share each of you has in the property. If you sell the property, or if you separate from your fellow tenant in common, the declaration of trust will be referred to in order to work out your entitlement to the sale proceeds from the property.
When should a property be held as Tenants in Common?
Holding property as tenants in common may be appropriate if you have children from a previous relationship and you want them to inherit your share when you die, rather than your co-owner. It may also be appropriate if you have made unequal contributions to the purchase price of the property.
Solicitors are under a duty to act with reasonable skill and care to be expected of reasonably competent solicitors. The Law Society has provided clear advice as to what is expected when a solicitor is acting for co-purchasers. The main points are:
- When acting for co-purchasers, it is essential to clarify their intentions as to the method by which they hold property;
- The methods of co-ownership must be explained to the clients in language appropriate to their level of understanding;
- The clients should be advised as to the most appropriate method of co-ownership according to their particular situation;
- A separate trust deed should be completed to express the clients’ wishes;
- Instructions should be obtained from both/all co-purchasers;
- Where the co-purchasers are not married nor in a civil partnership it may be necessary to advise each party independently about their rights in the property. It is important to be alert to the possibility of conflict
The Law Society has made it clear that where:
- The couple are unmarried;
- They are contributing in unequal shares; and
- There are children from a previous relationship
The most appropriate method of co-ownership is as tenants in common.
Unfortunately, it is often the case that inadequate advice is given by the solicitor and people purchase a property as joint tenants not realising the consequences of doing so. This can result in a lot of distress and inconvenience and can be compensated!
If you have been affected by the negligent advice of a conveyancer, please contact us as you may have a claim for professional negligence.
