Joint ownership

This page has technical information about how two or more people can own a property together.
Joint ownership is where several people own a property between them. Joint ownership by two people is very common. If a couple purchase a property together with a mortgage, the chances are they are joint owners. The mortgage agreement will make them 'jointly and individually' liable for repaying the loan. If one dies, the other remains responsible for paying all the loan back.

There is interest in joint ownership for disabled people because:

• In legal terms up to four people can be joint owners in just the same way as a couple. As joint ownership is very common this is a simple and well understood way of buying property
• The joint owner could be disabled people who will live in the property but equally they could be up to four parents or other relatives. Joint ownership provides an easy mechanism for pooling resources
• Owning a property does not mean you have to live in it. So two or three families could jointly purchase a property for their disabled relative to live in; subject to any restriction by the lender. Equally a father could jointly purchase with his son but the father could live somewhere else.

Joint ownership means purchase by individuals acting together who between them usually buy the whole of the equity. This is different from shared ownership where the disabled person is buying part of the equity from an organisation – usually a housing association. The part that is not owned by the individual is rented from the association. Note that it is possible for two people to become joint owners i.e. have a mortgage between them, of a shared ownership property.

How to access

Joint ownership is arranged by the individuals concerned or their families themselves. No external agency needs to be involved. In practice where a mortgage is required it will be the lender who sets limits and terms and conditions.Adult Social Care and/ or Supporting People are likely to have to agree to the arrangements if they are required to fund a package of care.

Pros and cons

Pros:

• For the residents, the advantages can be like any other ownership situation with considerable choice and control of property; living arrangements, lifestyle and so on
• A potential investment giving long-term security and choice in the future like any other property purchaser
• An easy, familiar way of combining resources to make property purchase by up to four people possible and thus more affordable.

Cons:

• As with any joint enterprise, some thought and agreement must be given to what happens if one person needs to leave the arrangement and wants their investment back. This needs formalising in an agreement
• Common points in these agreements are: i) No party is able to withdraw their funds until there is another person willing and able to replace the investment (or the remaining owners have to cover the costs between them); ii) Whoever is to live in the property must want to move in and be acceptable to the remaining resident(s)
• While the reasons for these understandings are obvious, they may deter people from joint purchase or cause friction
• The same disadvantages of any shared living arrangement. People may not get on, problems may arise if one falls ill or needs to leave, day to day domestic arrangements require negotiation and management
• Some costs of setting up the arrangements and agreement likely, including probably a legal fee.

How the money works

If families have sufficient cash all that may be required is entering into a joint agreement. More likely, the individuals or their families will seek a mortgage to buy a property in which case the terms and conditions of the mortgage provider will determine the arrangements. Families may be required to guarantee the loan.

Other issues

There are many possible variations and competent legal advice is likely to be required particularly where the aim is for families to jointly purchase with the aim of providing housing for relatives.