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tdlawyer
tdlawyer, Lawyer
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Experience:  11 years experience of general practice.
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English estate law. In a situation where there is a tenancy

Resolved Question:

English estate law.
In a situation where there is a tenancy in common, with a right of occupation for the wife until she dies or sells the property, if she sells my belief was that her next house was limited to half the cost of the one sold, as follows:-
If she sells house for £600K she has £300k for a new house and £300k goes to the estate.
However she believes that she could spend, say £400k on a house, which would be owned to the value of £200k each by her and the estate with the remaining £200k being split between her and the estate.
Please advise which is the correct interpretation. I believed it was the former.
Thanks,
***** *****
Submitted: 2 years ago.
Category: Law
Expert:  tdlawyer replied 2 years ago.
Hi thanks for your question. My name is ***** ***** I can assist with this.
Firstly, there is no restriction that applies in a case of a tenant in common with a life tenancy to the type or value of their next house. However, if there was a dispute between the owners, then they might have reached a settlement agreement which seeks to limit what they can do when seeking to sell the existing property. Is that the case here? If so, you'll need to look at the terms of the settlement in order to work out what can and cannot be done. If there is no such agreement, then there is no restriction.
kind regards
Tony
Customer: replied 2 years ago.

Hi Tony,

Is this the case even though the parties to the tenancy in common have both agreed that each of them owns 50% of the property?.

Therefore in this case would not the estate of the deceased inherit the 50% when the occupancy right was ended by the remaining spouse moving out and selling the property?

Thanks,

Eric

Expert:  tdlawyer replied 2 years ago.
Hi. Yes, this is correct.
So a tenancy in common is, by its definition, where each party owns a discrete share in the property, eg 50% each.
There is no restriction as a matter of genera law that applies with what one person can do with their share. It's theirs and they can do as they wish with it - leave it to whoever they wish, for example, in a will.
Regards
Tony
Customer: replied 2 years ago.

Tony,

In spite of each party owning 50%, are you definitely saying that the living spouse could spend over 50% on a new house, if that spouse left the matrimonial home? Would that house then be owned by both parties i.e. the wife and the estate.

If this is so, could the deceased spouse insert a clause in (will/or tenancy in common agreement) that the living spouse would have to release the 50% share of the property to his estate if she ever sold the matrimonial home?

Regards,

Eric

Expert:  tdlawyer replied 2 years ago.
Hi Eric
I think you're making this more than it is.
If two people own a house as tenants in common, nothing stops either of them going and buying another property if they wish to. Of course, if they were to divorce, then all the assets they have may be taken into account tin achieving a financial settlement but that's an entirely different issue to what you're asking about.
Anybody who is a tenant is common can leave their share of the property to anybody they like. However, you can force, by a will, an obligation to sell - only the court can order that and in reality it would be up to the beneficiaries in the will to take action with a view to getting their interest released somehow.
Hope this answers your question. Please do remember to rate the answer as highly for me as you can please.
Tony
Customer: replied 2 years ago.

Tony,

Sorry, no I'm still not clear.

I'm only talking of estate not divorce, that only muddies the waters.

If my wife and I own our property 50% each in tenancy in common, can I insert a condition in my will, or agreement re common tenancy, that my wife has a right to live in the matrimonial home for life, but that if she chooses to move, then the 50% due to my estate must then be released at that point?

It's this simple question I want answered

Regards,

Eric

Expert:  tdlawyer replied 2 years ago.
Hi Eric
Okay, divorce aside .... Yes, you can put a clause in your will that, should you die, your wife or any other co-owner could remain in the property until their death, then your share goes to whoever you like after that.
Also, you can stay that, if she chooses to move, then that she has to sell up and hand your share to your chosen beneficiary.
Hope that helps for you.
Regards
Tony
Customer: replied 2 years ago.

Tony,

Very helpful but just to complete the circle a simple question.

If with the 50% tenancy in common in place I grant my wife a right of occupation until she dies, but do not stipulate that if she moves she must repay the beneficiaries of my estate my half, can she spend whatever she wants on the new property, even if she uses all or part of my share at that stage. If so I presume all my half would be realised when she died and the new property then sold?

Thanks.

Regards,

Eric

Expert:  tdlawyer replied 2 years ago.
Yes she could. In reality this would be designed to improve the property I assume and hopefully increase its value. I couldn't imagine that any beneficiaries would ever want to interfere with the that objective anyway as it would potentially increase your value of interest in the property that would ultimately be left to then.
Regards
Tony
Expert:  tdlawyer replied 2 years ago.
Is there anything further you would like to know about this? If not, and this does answer your question, please do remember to rate the answer as highly as possible for me please.
Regards
Tony
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