There are three different ways to own property:
This is where a single individual owns the property entirely in their name. This person has complete control over the property and can make decisions without the need for consent from others.
Joint tenancy is a common form of ownership for couples. With a 'joint tenancy' you both own the whole of your property jointly, with an equal share. If one of you dies, the survivor automatically becomes the sole owner and it is transferred without the need for a Will.
Tenants in common
With tenants in common, each party has a separate share in the property. Unlike joint tenancy, tenants in common allows co-owners to hold unequal shares of the property. On a sale, each of you would be entitled to your agreed share. In the event of death, the share will not pass to the other owner automatically, instead their portion can be passed on to their heirs.
Why sever the tenancy during divorce?
Often married couples will co-own property as joint tenants. Severing the joint tenancy on a property converts the ownership into a tenants in common. This is common in divorce proceedings to prevent an ex-spouse from automatically inheriting the property if you were to pass away, thereby protecting your share of the property.
It is also important for litigation funders, such as Level, to make sure that if you were to pass away, your share of the property would fall into your estate and not automatically inherited by your ex-spouse. Your debt would then be repaid by the estate.
What is the process for severing the joint tenancy?
Below we have outlined the steps required to sever a joint tenancy. However, your solicitor will often help you with this:
Serve a written notice of severance of joint tenancy on any other owners
You will need to obtain evidence to show that the notice of severance was served, such as proof of recorded delivery
Complete the Form SEV
Send the Form SEV to the Land Registry along with the signed acknowledgement of receipt.
The Land Registry will enter a restriction on the title deed to confirm that the property is now held as tenants in common.
At Level, we always advise that you seek professional advice before embarking on any changes to your ownership structure. You can discuss your options with your Solicitor, or with an independent legal or financial advisor.