Can You Sever Joint Tenancy on a Leashold Flat Apartment?
Published / Last Updated on 10/10/2024
The simple answer is yes, you can sever joint tenancy on a leashold flat, apartment or house.
What is Joint Tenancy?
This is where all owners (usually a couple) jointly own the whole of the property (freehold joint tenants) or jointly own the rights to the leasehold of property e.g. a flat (leasehold joint tenants). You own the whole of the property title rights together. If one of you dies, the survivor already owns the whole of the property anyway. This is different to owning the property as Tenants in Common where you solely own a specific share of the property.
See Joint Tenants v Tenants in Common Split Home Ownership
Why Sever Joint Tenants to become Tenants in Common? You must usually be
You may wish to own a different specific proportion of the property e.g. 50/50 (imagine a red line drawn down the middle of the property) or say 70/30 – you solely own your own the of the property or rights.
- This may be because one of you placed a larger deposit whey buying the property than the other.
- You may not be married/civil partnesrhip and want to keep your share separate e.g., to leave to children from a previous relationship on death.
- You may wish to grants rights of the capital value to one owner and the other owner the rights to the rental income.
- For inheritance tax, estate and asset protection puproses, as a couple, you may wish to be able to gift your share of the property in trust to children within a Property Life Interest Trust to allow the surviving partner to live in the whole of the property for the rest of their lives but your share is now held in trust for e.g. children to use up inheritance tax allowances on first death (just in case any changes to nil rate band IHT allowances change in the future) or protect your share of the property from things such as a the surving partner needing means tested care in later life (wher only their share of the property will be taken into account) or even if the surviving partnet got into financial difficulty and faced legal action to seize some or all of the assets to pay off debts or even being sued with a financial liability with the property at risk of beinig seized.
Many joint owners do take action of severing joint tenants for freehold property as part of their financial planning but it is surprising that not many leasehold flat or apartment owners do.
