Selling part share of property held as tenants in common

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    Selling part share of property held as tenants in common

    I have received conflicting advice about my rights and the procedures involved in selling a part of one of my rental properties owned in 75% share by myself and in 25% by a relative.

    a) That relative is not responding to correspondence (long story largely to do with why they hold minority ownership in the first place). In order to sell the property as a whole, I clearly require their consent. In the absence of such consent there seems little alternative other than initiating court proceedings to achieve this - which I would like to avoid.

    b) Clearly, If I were to die, my 75% share would be conveyed according to my will, the minor-holder would have no say in the matter, and presumably the title deeds would be altered accordingly irrespective of their wishes, and could presumably not be prevented by their refusal to sign a document.

    c) I do have a potential purchaser who is willing to buy my 75% interest (albeit at a discount), either to be named on the title in replacement, or (as a less desirable alternative) as beneficial owner with the existing tenants in common remaining as trustees (me simply as trustee for purchaser but with 0% ownership).

    d) I have been told tentatively that in order to sell my part share outright, I would require the signature of the co-owner. I find this difficult to reconcile with a) the fact that they could not prevent altered co-ownership on my death by refusing to provide a signature, b) my understanding that a tenant in common is free to dispose of their part share as they wish.

    e) Failing the above, I am not clear if a formal transfer of beneficial ownership alone would require their consent - and also how HMRC would view subsequent ownership (HMRC telephone advisors are not able or willing to answer the question in advance of a transaction).

    Any knowledge would be much appreciated

    #2
    b) Clearly, If I were to die, my 75% share would be conveyed according to my will, the minor-holder would have no say in the matter, and presumably the title deeds would be altered accordingly irrespective of their wishes, and could presumably not be prevented by their refusal to sign a document.
    This statement is incorrect, I'm afraid.
    The two of you hold the property as trustees for yourselves. If you die the other is a surviving trustee and unless there's a trust deed that specifies to the contrary (unlikely), can appoint a new trustee. The trustees have a duty to hold your 75% share for your beneficiaries but the property itself does not necessarily get transferred to the beneficiaries. If they went to court they could no doubt force a sale.

    Actually the basic protection given to tenants in common is in practice not that strong on death. If one trustee dies the survivor can appoint anyone as a co-trustee and quickly sell the property and keep the proceeds. That would be unlawful and the deprived beneficiary would have a right of action against the trustees but if the others disappeared and spent the money the beneficiaries could lose out.

    c) I do have a potential purchaser who is willing to buy my 75% interest (albeit at a discount), either to be named on the title in replacement, or (as a less desirable alternative) as beneficial owner with the existing tenants in common remaining as trustees (me simply as trustee for purchaser but with 0% ownership).
    You can assign your beneficial interest but as you and the other person will still be trustees the assignee might have to go to court to force a sale.

    d) I have been told tentatively that in order to sell my part share outright, I would require the signature of the co-owner. I find this difficult to reconcile with a) the fact that they could not prevent altered co-ownership on my death by refusing to provide a signature, b) my understanding that a tenant in common is free to dispose of their part share as they wish.
    Yes you would need their signature if the buyer is to be registered at the Land Registry as a proprietor (along with the other) of the property.. You cannot pass the legal estate without this signature. You would have to apply to the court to have the other trustee removed.
    RICHARD WEBSTER

    As a conveyancing solicitor I believe the information given in the post to be useful (provided it relates to property in England & Wales) but I accept no liability except to fee-paying clients.

    Comment


      #3
      Thanks

      Thank you Richard for the illuminating and scary response. The related problem I have, is that if I do not proceed with the above I want to purchase a lease extension - only 30 years to go - (all at my own expense). I presume that, even if paid for entirely by me, and of no possible detriment to my co-owner (of benefit to them) I cannot proceed either without consent of the minority owner.

      Comment


        #4
        You would need the other owner's signature for the lease extension deed.
        RICHARD WEBSTER

        As a conveyancing solicitor I believe the information given in the post to be useful (provided it relates to property in England & Wales) but I accept no liability except to fee-paying clients.

        Comment

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