Joint ownership of property can have unintended consequences

Parents worry that having son’s name on deeds could disenfranchise their daughter

Assuming the property is owned as joint tenants, you cannot sever the current arrangement without the express written consent of all parties. Photograph: iStock

Assuming the property is owned as joint tenants, you cannot sever the current arrangement without the express written consent of all parties. Photograph: iStock

 

When we bought our apartment in 2013, we put our son’s name on the deeds, thinking it might be useful in the future. We have discovered recently, again after reading your articles, that the deeds do not specify which type of tenancy we have, which our solicitor has told us means it’s a joint tenancy.

We want to change to a tenancy in common in order to be fair to our daughter, as this apartment constitutes the bulk of our estate. Our son does not live here, he has his own home.

We have been unable to obtain advice from our solicitor. I wonder if you could let us know what’s involved in changing, and what it might cost?

Ms M.M., email

Property ownership can be a complex at the best of times; shared or co-ownership only adds to the potential for complexity and confusion. That’s precisely where you would expect a lawyer to engage actively with their clients to ensure they are aware of the implications.

For whatever reason, that does not seem to have happened here. Or if it did, there were some crossed wires.

Among private individuals there are generally two forms of co-ownership – joint tenancy or tenancy in common. They sound alike but they are quite distinct with very different control over the asset – whether that’s a property as in this case, or shares, a painting or a back account.

Joint tenancy presumes that everyone has an equal share in the asset. More importantly, when one owner dies their share passes automatically to the surviving owner(s).

Tenancy in common, on the contrary, means that each of the owners has control of a distinct share of the asset. It does not have to be equal shares but in the absence of any other specified distribution, that would be the presumption.

In that scenario, each individual owner is free to dispose of their share as they choose. That could involve them selling it or giving it away during their lifetime or it could be that they leave it to someone in a will. If they die without stating what should happen to their share, it will be treated under the rules of intestacy independent of the shares of the other owners.

When a couple is making a property purchase, they are presumed to be acting under joint tenancy unless otherwise specifically indicated. For other co-owners, the standard practice is that the form of tenancy is decided at the point of purchase and indicated when the property is registered with Land Registry.

I have searched Land Registry and your property is not listed there which means its details should be available from the Registry of Deeds. If , as your current solicitor advises, the deeds do not indicate a specific form of tenancy, I would imagine that it will be seen as a joint tenancy, given the circumstances of the purchase.

When you bought the apartment back in 2013, I’m guessing you assumed having your son’s name on the deeds might be useful for inheritance or gift tax purposes down the line. That would also indicate a joint tenancy arrangement.

However, I am not sure if that would have worked. While joint tenancy does mean that both/all parties own the property and that it will pass to surviving joint tenants outside any will, for inheritance tax calculation purposes, the Revenue Commissioners would likely want evidence of where the funds came to purchase the property in the first place.

If your son did not contribute his share of the purchase price, Revenue would likely consider the full value of the property against his inheritance tax-free threshold or tax liability.

Anyway, whatever the origins, your main concern now is to alter the arrangement to ensure that both of your children are treated equally on your death as this apartment is essentially your main asset.

You say you have been unable to get any advice on the subject from your solicitor. I’m somewhat at a loss on that. Unless there is a conflict of interest – ie the solicitor separately represents both you and your son – I can see no reason why they would not offer advice on this matter.

Consent

It appears to be a fairly straightforward process. The big thing, however, is that you cannot sever the current arrangement without the express written consent of all parties. That means you will need to secure written agreement with the proposal from your son as well as each of you two.

If for any reason that was not forthcoming, you could separately petition the High Court to override his lack of consent – essentially arguing that he was unreasonable in withholding his consent. But litigating against your own son could be complex as well as having the potential for a major breakdown in family relations. And as with anything to do with the High Court, it would come at a significant cost.

However, assuming your son is content to agree to the severing of the (presumed) joint tenancy and its replacement with an agreement that the property is owned as tenants in common with each owner having a stipulated share in the property, it is a matter of all parties signing a fairly straightforward legal document drawn up to reflect your wishes.

This would be drawn up by a solicitor, which is why I am pretty gobsmacked at your current solicitor’s position that he or she cannot advise you on the process. It should cost no more than a couple of hundred euro.

There are legal companies online that offer such a service and documentation online for less than €150 although, in general, my preference – and, I am sure, yours – would be that you deal with your own trusted legal adviser.

Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or email dcoyle@irishtimes.com. This column is a reader service and is not intended to replace professional advice. No personal correspondence will be entered into

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