Buying a property in joint name: what you need to know 

Investing in property is a significant milestone, and it’s not something you have to do alone. Buying property in joint names is common and often undertaken by couples, family members, or business partners. However, there are some important things to consider before diving into the property market with a co-owner. 

What is joint ownership? 

Joint ownership involves two or more individuals buying a property together. By pooling their resources, co-owners can afford a property that might be beyond their individual budgets. Shared mortgage payments and expenses make home ownership more accessible and affordable, and it can help spread financial risk and liability.

In the event of unforeseen circumstances such as job loss or illness, co-owners can support each other and mitigate financial strain. In Scotland, joint ownership can take two forms, it will either be taken equally between multiple parties “pro indiviso”, in equal shares (unless the property is being purchased in unequal shares in which case title could be taken by the parties to the extent of their respective portions) or equally between parties and to the survivor(s) of them.

Where it is equally between them and to the survivor(s), on the death of one party, that party’s share automatically transfers to the survivor(s) in terms of the title, known as passing by the survivorship destination in the title. Having title drawn with a survivorship destination, simplifies the transfer of ownership in the event of a co-owner’s death, avoiding the need to obtain Confirmation in the estate for that property (Confirmation in Scotland is the equivalent of probate in England) and facilitating a smoother inheritance process.

This arrangement is particularly beneficial for spouses and partners seeking to protect their interests and ensure the seamless transfer of assets. This can, however be inflexible and if parties subsequently decide they do not wish their share to go to the survivor, it cannot be changed without the other title holder’s consent. Also, any change requires amendment to the title itself and therefore generally it may be more advisable for title to be held equally between parties on a “pro indiviso” basis or in accordance with their various shares.  In the latter case, the position on death can then be covered by the owners’ Wills.

Challenges and risks with joint ownership

Differences in opinion, financial disagreements, and lifestyle changes can lead to conflicts among co-owners so it helps to establish good communication and address potential issues proactively to help minimise disputes and preserve relationships. Co-owners are jointly liable for mortgage payments, property taxes, maintenance costs, and other expenses associated with homeownership. If one of the owners fails to fulfil their financial obligations, this can jeopardise the property and strain relationships. 

Joint ownership involves complex legal considerations, including property rights, inheritance laws, and tax implications. Co-owners should seek expert legal advice to navigate these complexities and ensure compliance with relevant regulations. 

Key things to consider 

Joint ownership involves legal obligations and responsibilities, so it is best to seek professional legal advice to understand the implications of joint ownership, including rights, obligations, and potential risks. Joint owners need to agree to clear financial agreements, including contributions to the purchase price, mortgage payments, property maintenance, and other expenses.

Co-owners should consider exit strategies in case of unforeseen circumstances such as relationship breakdowns, financial difficulties, or changes in circumstances. Having a clear plan in place can help facilitate a smoother transition and prevent disputes down the line. 

Buying property in joint names does have many advantages, however, prospective buyers need to carefully consider the legal, financial, and practical implications of joint ownership and seek professional advice from a qualified solicitor to minimise any risks and ensure you embark on a successful investment journey.