An executor of a deceased estate with property, or a beneficiary thereof, needs to know their way around the law. Especially if there is a sitting tenant or co-owner with occupation rights. This article discusses home ownership types, and occupation principles so you have a firm knowledge base.
How To Bottom Out On Home Ownership
The UK Land Registry maintains details of ownership, and other information pertaining to fixed property. Basic site access is free over the internet, and provides details of current ownership, and any running mortgages.
The inquirer can also view the status of any charges, easements and restrictive covenants. And in addition determine property boundaries, rights of way, and wayleaves that may affect the value of the asset in the mind of the average buyer.
With That As Background, What Might the Search Reveal?
There are several categories of home ownership types ,and occupation rights we review briefly in the paragraphs following:
SOLE AND JOINT OWNERSHIP
Sole ownership means only one person is the legal owner, even if other people live there, and / or they contributed to the price. However, a third party may have beneficial ownership provided the legalities are in place.
Joint ownership comes into play where two or more owners hold legal title to the land. In the latter instance, all their names appear on the title, and in any mortgage deed.
Joint owners may become joint tenants with equal shares in the property, or tenants in common with different interests as they wish. Beneficial ownership may co-exist if a non-owner contributes to the purchase, and there is an agreement in place.
JOINT TENANTS
Joint tenants add an additional layer to the definitions of home ownership types and occupation. In this instance, each party has an equal, distinct share in the property. This arrangement suits people in close relationships.
If one party dies, then their share passes automatically to the other. This happens regardless of what the deceased person’s will says, provided the right of survivorship is still in place.
For whatever reason, the parties may decide to end their joint tenant status. This would cancel the survivor’s right, perhaps because the relationship has broken down.
One party might decide to buy the other out. Alternatively, they might decide to agree a tenancy in common with equal, or unequal shares. Separating couples would be wise to seek legal advice.
TENANTS IN COMMON
Tenants in common own distinct shares in the equity of a property, although they jointly own the legal title. These shares may be equal or unequal. But in either case they can bequeath their share to any person they choose.
If one or both tenants dies without leaving a valid will, then the rules of intestasy will apply. Tenants in common may be an attractive option for friends who purchase property together. Or indeed couples living together without a formal relationship.
Home Ownership Title And Occupancy
Most residential property is part of registered land, although this may not apply in the case of some older developments. The Land Registry is the custodian of proprietary ownership, as we describe in the introduction to this article.
However, if the land is not registered, then an interested party will need to inspect the title deeds. These may be with a mortgagor, the conveyancer who attended to the transfer, or indeed with the owner(s) themselves.
Freehold And Leasehold Title
Any survey concerning home ownership types and occupation would be incomplete without understanding the title. We complete this discussion by sharing details of the two main types of property ownership under United Kingdom law.
Freehold Property Ownership
Freehold property ownership has no time limitation, and is hence the most popular category in the United Kingdom. The extent of the owner’s interest in the property is almost unlimited, and their rights equate to downright ownership.
This entitlement is enduring, and passes to a deceased estate. It only ends if the property is legally sold, or passes to another through repossession or a compulsory purchase. However, a freehold owner may admit a tenant if they so wish.
Leasehold Property Ownership
Leasehold properties are let by an owner to a third party for an extended period of time, usually in exchange for a lump sum. Alternatively, the third party has an ongoing obligation to pay rent. Both financial arrangements are legally binding.
The person with the right to leasehold may sub-lease it to a third party tenant, or assign the balance of the leasehold to another person. They may also have the right to purchase the leasehold, subject to the contents of the agreement. If not, then the leasehold reverts to the owner at the end of the contract period.
The Value of Freehold or Leasehold Property
Both freehold and leasehold property rights form part of a deceased estate, and must be administered by an executor. Once they have determined the nature of the property including home ownership types and occupation, then their next step is to the assess the value of the property and its contents.
Avery Associates can arrange a professional RICS valuation of the fixed property for inheritance tax purposes, and prepare the report. We can also assess the worth of the contents under market conditions. Contact us when convenient for a preliminary discussion, and to discuss our terms if you would like to take this further.
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