Selling a house with multiple owners

The UK parliament says that there are approximately 202,000 households living under co-ownership in 2022, which accounts for 1.3% of all mortgages.

Buying a property with other people can sound like a good idea. By pooling your resources, you may be able to purchase a home that otherwise would have been out of your reach. However, as with anything, there are important things to consider when going into a joint ownership — especially when it comes to selling that property further down the line.

In the UK, you can own a property as either ‘joint tenants’ (two owners) or ‘tenants in common’ (multiple owners). The type of ownership you have affects what you can do with the property if your relationship with the co-owner breaks down, or if one owner dies.

People who enter joint ownerships (or co-ownerships) are usually:

• Married couples
• Co-habiting couples
• Close friends
• Family members, including children, siblings and parents

In this article, we explain the process of selling a house with multiple owners. We cover the difference between ‘joint tenancy’ and ‘tenancy in common’, showing how they impact your rights when selling a house as one of several owners.

How to sell tenants in common property

To sell your tenants in common property these are the steps you need to follow:

1. Inform your co-owner(s) you want to sell your share of the property
2. They do not need to agree/disagree
3. Find an estate agent
4. Market and sell your home
5. You can either sell your share of the property or the whole property if decided
6. Share the profit/sale proceeds as desired (does not need to be equal)

A tenancy in common allows you to co-own a property with more than two people. New co-owners can be added over time, letting you split costs if needed.

For this reason, selling a house as a tenant in common generally allows for more flexibility, especially when it comes to passing the property to other people in your will or selling your personal share.

How to sell joint tenancy property

To sell your joint tenancy property, these are the steps you need to follow:

1. Inform your co-owner(s) you want to sell
2. If they agree then you can put the house up for sale
3. Find an estate agent
4. Market and sell your home
5. Share the profit/sale proceeds as desired
6. If they don't want to sell then you may need for an "order for sale of the property" through court

Usually, joint tenants are liable for all payments for any loans. Any decisions about the property are made and have to be approved by both owners.

Opting to sell as joint tenants gives you less freedom when it comes to passing the property on. You will also need consent from the other owner to sell.

However, you will have equal rights to the whole property, which means that if your partnership or relationship breaks down (or if the other person dies), the entire property and profits from sales will go to you.

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Your rights when selling in joint ownerships

• It’s possible to sell your own share of the property without the co-owners giving consent.
• The property does not automatically go to the other owners if you die.
• You can pass on your share of the property in your will.
• You can add owners over time, rather than all owners receiving title to the property at the same time.

Advantages

The benefits of selling as a joint tenant are:

• Having equal rights to the whole property means you have the right to propose selling.
• You can avoid probate courts and share responsibility for the sale.
• You do not have to work out profit shares between owners post-sale.

The benefits of selling as a tenant in common are:

• You can sell your share to whoever you want.
• You have equal rights to the whole property which means you can propose to sell whenever you want.

Disadvantages

The disadvantages of selling your house as a tenant in common are:

• If one of the owners wants to sell, but the co-owners disagree, they can still serve a partition action. This might mean the other joint tenants have to sell the property whether they want to or not.
• If one of the co-owners dies, there is potential for dispute between the deceased’s surviving family and the remaining co-owner.

The disadvantages of selling as a joint tenant are:

• The need for agreement. If you and your partner split up, one party cannot sell without the other’s consent.
• The potential for assets to be frozen.
• Loss of control over the distribution of assets after death. I.e., you cannot pass on your ownership of the property in your will or as inheritance for your children.

Can I sell my house if it’s registered in two names?

In short, yes, you can sell your house if it's registered in two names. A house can be registered and sold in two names. GOV.uk says that if you plan to buy, inherit, or become a trustee of a property with someone else, you must decide which type of co-ownership you want. The type of co-ownership will impact your selling process further down the line.

Can one person be on the mortgage but two on the deed?

The answer is yes. If your name is on the deed but not the mortgage, it means that you’re an owner of the home, but not liable for the mortgage loan and the resulting payments. You aren’t legally obligated to pay the mortgage, but someone must pay it to avoid foreclosure.

Can a jointly owned property be sold by one owner?

You can sell a home that you bought under co-ownership at any time but a jointly owned property can't always be sold by just one owner. Typically, if one person wants to sell the property then all parties need to agree in order for the sale to go ahead. However, it can be stressful when the other legal owner doesn't want to sell.

Requirements for sale differ between joint tenants and tenants in common.

• Joint tenant property sales: A joint tenant property cannot be sold by only one owner without getting the courts involved. If both parties agree, the sale of the property should be quite straight-forward. It's more complicated, however, if one person wants to sell against the wishes of the other. If only one of you wants to sell, you cannot do so without applying to the court to force the sale against the wishes of the co-owner. In order to avoid this you should consider adding in a break clause which will set out circumstances where you can sell.
• Tenant in common property sales: A tenant in common property can be sold by just one owner. It’s easier to sell as tenants in common because the property is held on what is known as a Trust of Sale. This means when one of the owners decides to sell, the whole property needs to be sold. Proceeds are then split equally between owners.

Buying out a co-owner

To buy out a co-owner, you’ll need enough funds to cover their entire share of equity in the property. If they don’t agree, then you can submit an application to the Court for an order under the Trusts of Land Appointment of Trustees Act (TOLATA), which requires them to transfer their interest to you.

For more information, visit GOV.uk.

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