Q&As

If there is an unsecured debt against an estate where the sole asset is a jointly held property, is there any difference in how the debt is treated if the property is held as tenants in common rather than joint tenants?

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Produced in partnership with Oliver Auld of Charles Russell Speechlys LLP
Published on LexisPSL on 02/10/2019

The following Wills & Probate Q&A produced in partnership with Oliver Auld of Charles Russell Speechlys LLP provides comprehensive and up to date legal information covering:

  • If there is an unsecured debt against an estate where the sole asset is a jointly held property, is there any difference in how the debt is treated if the property is held as tenants in common rather than joint tenants?

If there is an unsecured debt against an estate where the sole asset is a jointly held property, is there any difference in how the debt is treated if the property is held as tenants in common rather than joint tenants?

Joint owners of land hold the property on trust, which essentially separates the legal interest from the beneficial interest. Under the Law of Property Act 1925, the owners may only hold the legal estate as joint tenants, whereas they may either hold the beneficial interest as joint tenants or as tenants in common.

Where the property is held beneficially by two or more persons as tenants in common, the deceased’s beneficial interest will devolve to their personal representatives (PRs), which they will be obliged to apply towards settling the deceased’s debts. This may necessitate the sale or remortgage of the property, ideally with the co-operation of the surviving owner(s). Any residue after the payment of the deceased’s liabilities and estate administration expenses will pass to the beneficiaries. If there is more than one debt and the liabilities exceed the value of the deceased’s interest in the property, the debts must be paid in the order set out in the Administration of Insolvent

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