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Can a jointly owned property be sold by one owner?

When it comes to jointly owned property in Scotland, there can be a lot of confusion and uncertainty about the rights and responsibilities of each owner. One common question that arises is whether one owner can sell the property without the consent of the other owner. In this comprehensive guide, we will delve into the intricacies of joint ownership in Scotland, exploring the legal framework and providing clarity on the matter.

Understanding Joint Ownership in Scotland

In Scotland, joint ownership of property can be structured in two main ways: joint tenancy and tenancy in common. These forms of co-ownership come with different rights and obligations for each owner. Let's examine each of them in detail.

Joint Tenancy

Joint tenancy is the most common form of co-ownership among unmarried couples in Scotland. In this arrangement, the owners are considered "co-owners" and hold an undivided share of the property. This means that both co-owners have an equal and indivisible interest in the entire property.

Responsibilities in Joint Tenancy

As joint tenants, both owners share equal responsibility for the property, including mortgage payments and maintenance costs. If one co-owner fails to meet their financial obligations, the mortgage lender can pursue legal action against both owners.

Rights of Survivorship

One key feature of joint tenancy is the rights of survivorship. This means that if one joint tenant passes away, their share automatically transfers to the surviving co-owner. This transfer occurs independently of the deceased's will and is not subject to inheritance laws.

Tenancy in Common

Tenancy in common is another form of joint ownership in Scotland. Unlike joint tenancy, this arrangement allows for distinct shares of ownership, which can be divided in any proportion agreed upon by the co-owners.

Determining Ownership Shares

By default, there is a presumption of equal shares in tenancy in common. However, co-owners can establish different ownership proportions through a legal agreement. Factors such as financial contributions towards the property's purchase, mortgage payments, or property improvements can influence the distribution of shares.

Responsibilities in Tenancy in Common

Similar to joint tenancy, co-owners in a tenancy in common are equally responsible for the property's upkeep and mortgage payments. However, the specific responsibilities can be modified through a legal document, such as a cohabitation agreement.

Selling a Jointly Owned Property in Scotland

Now that we understand the different forms of joint ownership, let's address the question at hand: can one owner sell a jointly owned property without the consent of the other owner? The answer depends on the type of joint ownership and the agreement between the co-owners.

Joint Tenancy: Consent is Required

In a joint tenancy, both owners must consent to the sale of the property. If one owner wishes to sell but does not have the consent of the other, they can initiate legal proceedings known as an action of division and sale. However, the other owner can raise two defences to prevent the sale:

  1. Physical Division: The co-owner can propose a physical division of the property as an alternative to the sale.

  2. Buyout: The co-owner can offer to buy the other party's share at an agreed price or a value determined by the court.

If an order to sell the property is granted, the court will also determine how the sale proceeds are divided. Generally, the division follows the ownership shares specified in the title deeds. However, the court may consider adjustments if one party has made disproportionate contributions to joint obligations.

Tenancy in Common: Options for Disposal

In a tenancy in common, each owner has a distinct share of the property. This means that one owner can sell their share without the consent of the other owner. However, the sale of a partial interest may be more challenging than selling the entire property.

When circumstances change, and a joint ownership arrangement is no longer feasible, several options are available, depending on the co-owners agreements and preferences. These options include:

  1. Buying Out: One co-owner may choose to buy the other's share, effectively becoming the sole owner.

  2. Selling to Another Co-Owner: The co-owner interested in selling their share may find a willing buyer among the other joint owners.

  3. Selling the Entire Property: If both co-owners agree, they can sell the property and divide the profits according to their ownership shares.

To avoid any misunderstandings or disputes, it is essential to have a formal, legally binding agreement outlining the agreed-upon arrangements. Consulting with a solicitor to draft such an agreement is highly recommended.

Importance of Cohabitation Agreements and Wills

To navigate the complexities of joint ownership and ensure clarity and protection for all parties involved, it is crucial to consider two additional legal documents: a cohabitation agreement and a will.

Cohabitation Agreement

A cohabitation agreement is a legally binding document that outlines the financial arrangements between cohabiting partners. This agreement can address various aspects, including the jointly owned property, and specify each cohabitant's entitlements in case the relationship ends. It is a customisable document tailored to the specific circumstances of the cohabiting couple.

Will with Survivorship Clause

Having a will is particularly vital for unmarried couples in joint ownership arrangements. In a tenancy in common, specific shares in the property do not automatically pass to the surviving joint owner upon the death of one co-owner. To ensure that the surviving partner inherits the deceased co-owner's share, a will with a survivorship clause should be put in place. This clause stipulates that the deceased's share will pass directly to the surviving partner.

A qualified solicitor can provide expert advice and assistance in creating a cohabitation agreement and drafting wills with survivorship clauses that align with your specific circumstances and wishes.

Conclusion

In conclusion, the sale of a jointly owned property in Scotland depends on the type of joint ownership and the agreements in place between the co-owners. In joint tenancy, both owners must consent to the sale, while in tenancy in common, one owner can sell their share without the other's consent. However, it is crucial to have clear legal agreements, such as a cohabitation agreement and a will with a survivorship clause, to protect the rights and interests of all parties involved. Consulting with a qualified solicitor is crucial to ensure compliance with Scottish law and to navigate the complexities of joint ownership successfully.

Thompson Family Law Solicitors is a modern solicitors practice based in Glasgow, with an office in Coatbridge, servicing the whole of Scotland from the Highlands and Islands to the Scottish Borders. We pride ourselves on operating a modern way of working, including an entirely paperless office.

Get in touch with one of our solicitors to find out how we can help you. Fill out our enquiry form or call us on 0141 404 6575.

 

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