Tenants in Common

[Bellabella200]

A friend has recently split from his girlfriend with whom he shared a house on a tenants in common basis.

The fixed term on their mortgage comes to an end later this year and he will try and remortgage by himself.

In the meantime, she has moved out and is not currently contributing to the mortgage.

In the event that he is unable to remortgage the house will need to be sold, however she believes that she will not be responsible for any associated fees as they are tenants in common.

There is no equity in the property so she would not benefit from any proceeds from a sale.

She has also been advised that she can force a sale at any time.

Could someone please confirm if this is correct?

Any advice would be greatly appreciated.

Many thanks

[bednobs]

she would have to get a court order to force a sale, and i could see why she would want to - who would want to have a great big debt hanging over their head in a house they no longer have anything to do with??

[tonywiltshire]

Tenants in common (TIC) own a property not necessarily in equal shares, unlike joint tenants, the TIC can leave or sell their percentage holding to any beneficiary or willing buyer that they wish, upon death the percentage holding of the property would not pass automatically to the other as it would if they were joint tenants. The selling costs of the property would probably be pro-rata to their holding, as can be seen it is unlikely any one would be interested in buying a part of a property, a sale can be forced with the permission of the court if it is challenged.

[Bellabella200]

Thanks...

Bednobs, i'm not sure i made myself clear. He doesn't want her to have any connection to the house/mortgage either. They have come to an arrangement where she will not contribute to the mortgage until the current term ends and he finds out if he is able to remortgage.

If he is able to remortgage, he will do so in his own name and she will be removed from the mortgage/deeds.

If he is unable to get a mortgage by himself, the house will have to be sold. It is in this instance that she is refusing to pay any selling fees etc.

[bednobs]

however, if he defaults on their mortgage now, she will still be liable for it with him, no matter what agreement they've come to together - the agreement they have the the mortgage co will override that. This is why i can see she might want to sell before the end of the mortgage

[ladybirder]

On what grounds does she think she would not be liable to contribute to the selling fees?

[Bellabella200]

Ladybirder... She doesn't have any grounds as such other that she has been advised that because they are tenants in common that she is not liable.

I should add that her 'advisor' is her step mother who happens to run a letting agency and seems to be a self appointed expert on all things legal!

I'm sure if there was equity in the property she wouldn't think she was exempt from that becaude they are 'tenants in common'

[Bellabella200]

There is only a few months left on the existing term, it would not be in their interests to sell now as they would have to pay the redemption penalty and a sale is unlikely to complete before the term ends.

[MartinBev58]

Hi Tony

You said ''the TIC can leave or sell their percentage holding to any beneficiary or willing buyer that they wish, upon death the percentage holding of the property would not pass automatically to the other as it would if they were joint tenants''.
Are you sure that is right in all cases?.
When my father and myself owned the house I am in now in the land certificate said ''No sale, transfer or charge to be given without the consent of all parties''.
I know the newer houses had the clause ''or by order of the court after'' but the first part of the clause was the same.
Parties was later defined as all Tennants in Common.

Martin

[ladybirder]

Bella, how strange, her step-mother thinks only one of the tenants in common should foot the selling fees, Hmmm. I bet she wouldn't think that if the boot was on the other foot and her step-daughter was the one staying in the property. In my view, fairness dictates that both TICs are liable. If he defaults on the mortgage she will be responsible as well as him, as she will also be if there is a shortfall when it is sold. She seems to think she can just walk away and take no responsibility whatsoever. I'm sure her attitude and that of her step-mother would be different if their was equity to be distributed. Grrr some people!

[tonywiltshire]

Martin,
Thank you for your question.
It is not unusual for a clause similar to that which you experienced to be inserted, particularly when the TIC are part of a family, In my experience the largest group of people who wish to become TIC as opposed to Joint tenants are couples who wish to legally reduce/avoid IHT, this may or may not have been your Fathers intention. I was trying to explain the simple basic difference between the two types of holding.