Severing a joint tenancy in divorce

My magic postbag reveals an enquiry about severing a joint tenancy in divorce.  Sounds painful – what’s that about then?

Well, most couples who own property own it jointly in one of two ways.  They will own it as either:

  • beneficial joint tenants; or
  • tenants in common

Beneficial joint tenancy

This means that you own the property jointly and neither of you can point to a specific share in the property.  You will both need to consent to a sale or a re-mortgage.  Most importantly, you cannot leave instructions to a lawyer to pass on your interest in a beneficial joint tenancy under your Will.  This means that when you die, your interest in the property passes automatically to your fellow joint owner or owners.

Tenancy in common

You still own the property with your fellow owner but you will both have distinct shares.  This may be 50/50 or 70/30 and so on.  You can sell your share or charge it (raise a mortgage loan on it).  But, if you die, your interest will not pass automatically to your joint owner but will instead go to the person you have named as the beneficiary under your Will.  You can therefore see that it is vital that you have a Will in place if you have a tenancy in common.  If there is no Will, or the Will is deemed to be invalid, there will be an intestacy and your share may go to someone you’d rather not benefit.

Severing a beneficial joint tenancy

Don’t panic.  Not a drop of blood in sight.  A severance means that you wish to change a beneficial joint tenancy into a tenancy in common.  So why would I want to do that, you ask?

Well, one example, familiar to my clients, is a situation where divorce proceedings are being pursued or are being contemplated. The spouses or partners are suddenly out of love and fighting for their share in the equity (the value of the property after taking off any mortgage charges and sale fees).  In those circumstances they are not best pleased to hear that, should they die before the completion of the divorce process, their share will automatically pass to the other, surviving, spouse.  To prevent this happening, your solicitor can prepare a Notice of Severance.  Once this document is signed and sent to your spouse it has the effect of ‘severing’ the beneficial joint tenancy and converting it into a tenancy in common.  Then, of course, you will be told to prepare a Will, pronto, to define where your ‘severed’ share in the property should go in the event of your death.

At the same time, whilst dealing with a new Will, it would be necessary to change the executor of your Will as your old Will may say it will be your (soon-to-be-ex) spouse.  The decree absolute in divorce would set aside your spouse as an executor anyway and this would leave your estate without an administrator if additional executors were not appointed.

If you have a solicitor acting for you then they would normally ask you to sign two copies of the Notice of Severance, and both would then be sent to your spouse (or their solicitors).  A request would be made for one of the forms to be signed and returned so that this version (bearing both spouses’ consent) can be registered at District Land Registry and the record of the property ownership will be amended.

Anyone contemplating preparing a Notice of Severance and sending it to their spouse or partner should think carefully and take advice.  Even if divorce is inevitable, there may be children of the marriage.  If you were to die before the divorce is finalised, would you really object to your spouse automatically being given your share of the beneficial joint tenancy which would then ensure there was a home for your children?

 

 

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25 Responses to Severing a joint tenancy in divorce

  1. deborah bowser March 5, 2012 at 7:49 am #

    if my new partner signs over the proprty to his ex does he still have to fill n a form e1

  2. DivorceFT March 6, 2012 at 11:04 am #

    Hi,

    Are you referring to Form E1 (financial disclosure questionnaire) used in the Family Proceedings Court? Just wanted to check that I understood your question.

  3. NMB March 15, 2012 at 1:52 pm #

    My husband left at the beginning of March and I have already spoken to a solicitor. it has been suggested that I Sever the Joint tenancy of the matrimonal home to ensure that in the event of my death my share of the matrimonal home passes to my children, making a new Will at the same time. My question is that in doing this would be be perseved as being ‘a little quick of the mark’ given the fact that he only left a few weeks ago? All I want to do is protect my children’s interest in their family home given the fact that their father has been having an affair and has now set up home with another women.

  4. DivorceFT March 15, 2012 at 3:20 pm #

    There are a number of considerations here.

    1. Is the marriage over? Is divorce inevitable? If it is then you may well decide that you do not want your share in the matrimonial home to pass to your husband automatically in the event of your death before the divorce has been finalised. So you may decide to sever the joint tenancy (and get a new Will pronto!). If you did reconcile with your husband later then it is possible (if a little involved) to reverse the severance. So, on balance, after discussion with your solicitors, you may decide to just protect the children’s position and sever the tenancy as soon as possible.
    2. Of course, if you proceed to sever the tenancy but your husband then dies before the divorce finalises, his share in the property will not pass to you automatically but under the terms of his Will if he has one. You do need to discuss this with your solicitors because his present Will may leave you any interests he has anyway so you are no worse off. Note, there may be Inheritance Tax issues if his interest in the property came to you via his Will rather than automatically if the value of his estate is at a certain level. If he has no Will then the intestacy provisions would apply and you may still end up with his interest in the house.
    3. There can be no criticism of you acting quickly to sever the joint tenancy. You are protecting your position and that of your children.
    4. Always consider the health issues. If your husband was at death’s door you would not be advised to sever the joint tenancy. If your health was a serious issue and your life expectancy very short, you would probably be advised to sever the tenancy with all possible speed so you could pass your interest in the matrimonial home, on trust, to your children.
    5. Don’t forget this automatic transfer of one spouse’s interest to another happens because the asset is jointly owned so the same rules apply to any other jointly owned assets like joint bank or savings accounts, life policies etc. You may need to deal with these assets as well which can be initiated by a telephone call to the providers (bank, insurance company) to be advised about their particular procedures for bringing the joint ownership to an end. But you should get legal advice and also financial services advice before proceeding.

  5. Glen Jones June 2, 2012 at 12:51 am #

    I am a tenant in common (we were never married) and have just been served with a severance of JOINT tenancy, a question to ask if I may?

    The notice is not noted as or accompanied by a “without prejudice” letter and is dated during May 2012 but posted 2nd class over a week later. The notice states that the tenancy and equity is to be split “in shares to be agreed”.

    Does any of this have a bearing on the serving of the notice?

    Previous correspondence from my ex partner’s solicitor continually refers to the former matrimonial home and states I have never made payments on the mortgage at any time (untrue but she, and her solicitor refuse to acknowledge requests for my bank statements still at the property), dates and amounts of purchase etc are incorrect, as are the dates given for when I lived at the property, her solicitor also referred us to an arbitration service which she refused to attend. Several charges have been placed against the property in her name but amounts unknown.

    The property was purchased under English Law, I now live in Scotland and have huge problems trying to get legal representation especially the distance to a solicitor and the cost as I work part time.

    Thanks in advance.

  6. Glen Jones June 2, 2012 at 1:50 am #

    Apologies as there is a light addition to the above;

    the covering letter states a Notice of Severance is enclosed, the notice itself states “my desire to sever the joint tenancy……….in shares to be agreed”, does the “desire to sever” mean a notice has been served or just indicate that this is intended?

    • DivorceFT June 2, 2012 at 7:58 pm #

      Hi Glen,

      I don’t understand why you have been served with a Notice of Severance if you were already a tenant in common with your ex-partner. Her solicitors should have checked the property ownership at district land registry before sending you the Notice. (Perhaps they did, and in fact, you were not a tenant in common?)

      Either way, you are a tenant in common now, if you were not one before. The ‘desire to sever’ bit is really just a bit of odd sounding language harking back to the Law of Property Act 1925 (as amended). Section 36 of the LPA 1925 refers to joint tenancies:

      “(2) … where a legal estate (not being settled land) is vested in joint tenants beneficially, and any tenant desires to sever the joint tenancy in equity, he shall give to the other joint tenants a notice in writing of such desire or do such other acts or things as would, in the case of personal estate, have been effectual to sever the tenancy in equity, and thereupon the land shall be held in trust on terms which would have been requisite for giving effect to the beneficial interests if there had been an actual severance.”

      The “desire to sever’ is expressed in the Notice you have received and is valid.

      The reference to the “former matrimonial home” is clearly a mistake if you and your ex were not married. In fact, the relevant legislation is not matrimonial, but property based: Trusts of Land (and Appointment of Trustees Act) 1996. And/or Schedule I Children Act 1989 (but only if you had children with your ex).

      You refer to the request for bank statements at the former property and errors made in the purchase amounts etc. Firstly, your ex’s solicitors, if they are going to make a claim for a beneficial interest in the former property greater than 50% for their client will need to make out their case clearly, and supported by the relevant documentation.

      Secondly, if your name is on those bank statements then, if you have online access to your bank accounts you can usually print off the last 12 months’ bank statements directly to your printer. If you are having difficulty obtaining missing bank statements, your bank is obliged to provide up to the last 6 years’ worth of bank statements provided you state clearly it is a request under the Data Protection Act 1998 for which the maximum charge is £10.00.

      Thirdly, you should tell your ex’s solicitors to make a request to the firm of solicitors who handled the original conveyance requiring a copy of the ENTIRE conveyancing file. You will provide your consent to the request (presuming you and your ex were joint clients of the conveyancing firm) and require two complete copies to be made: one to your ex’s solicitors and one to you. There will be a copying charge but you can split it equally with your ex.

      Fourthly, if the charges on the property are the liability of your ex then they can only impact against her share (whatever that may turn out to be) of the equity in the property. They cannot be enforced against your share.

      Fifthly, if your ex has refused to attend mediation or arbitration then there will have to be a good reason as otherwise, if there are court proceedings, the court can impose costs penalties against a party who refuses to use alternative dispute resolution.

      I hope that is helpful…

  7. Glen June 3, 2012 at 6:47 am #

    Many thanks for your detailed and helpful reply, the bank statement issues go back much further than 6 years and show that all mortgage payments were met solely by myself up to and beyond the time I left the property.

    I have yet to acknowledge the notice mainly due to the “shares to be agreed” comment, presumably the notice is classed as served without my acknowledgement and it’s now a case of waiting to hear how she wishes to split the share?

    • DivorceFT June 4, 2012 at 6:54 pm #

      No problem. And yes, the Notice has been served even if you have not acknowledged it.

  8. Sarah June 18, 2012 at 10:26 pm #

    I’m currently in joint tenancy with my husband for a house bought a year after our marriage with his inheritance from the sale of his parents house.
    If he serves me with tenants in common and proves the money came from the inheritance, can he claim full title to the house?
    We also have a flat which we lived in during our first year of marriage and we still have a mortgage on this property so I’m sure this will be sold and monies split equally?
    We do not have any children.

  9. DivorceFT June 19, 2012 at 9:05 pm #

    The important issue here, Sarah, is that you are married. Therefore, if there is a dispute between you and your husband as to the extent of your respective shares in the matrimonial home it is likely to be determined by a family court using divorce legislation. In that case, the court has the power, whether your joint tenancy has been severed or not, to award 50/50, 60/40, 70/30 and so on taking into account all the assets of the marriage and any income claims.

    Your husband may have a good claim to say that he is entitled to more of the equity in the home because of the use of his inheritance but the discretion of the family court to take other issues into account such as your basic ‘needs’, the duration of the marriage, or health issues is very wide.

  10. Julie September 18, 2012 at 10:49 am #

    Hello,

    my partner and his wife have been separated for nearly three years. They drew up an agreement to divide the assets remaining in their joint home. Since my partner is unable to re-mortgage in the current climate, his solicitor drew up a decree of severence. His wife’s solicitor told her it was worthless.
    They have recently been to mediation and his wife has been told that it is in her best interests to sign the decree and proceed with the divorce, since my partner has already been more than generous with the settlement he has given her.
    The mortgage company have verbally confirmed that they would act on any decree of severence, passed by a court of law, and on the actual decree there is space to fill in the gaps for date of hearing, name of court etc.
    My question is; does the form need to be signed in a court or can it be signed beforehand? If it can be signed beforehand, do you then get it stamped in the divorce court?
    We are trying to avoid any more solicitors’ fees and tie this up ourselves but are unsure of the process required and would appreciate your guidance.

    Many thanks

    • DivorceFT September 24, 2012 at 11:16 pm #

      Hello Julie,

      I’m sorry, I don’t understand the entirety of your comment. You are referring to a Decree of Severance. My simple lawyer’s mind gets a bit confused at this point. There is Decree Nisi and Decree Absolute in divorce and there is the (totally unrelated) Notice of Severance. I think you are referring to a Notice of Severance. A Notice of Severance only needs to be served (as simple as posting it or handing it to an ex partner) to be effective. It does not need to be signed by the person who receives it, unless you want to ensure that district land registry accepts the countersignature as a clear indication of consent to the registration of the severance.

      You then say “The mortgage company have verbally confirmed that they would act on any decree of severence, passed by a court of law, and on the actual decree there is space to fill in the gaps for date of hearing, name of court etc.” The court does not pass a Notice of Severance. A court cannot order a mortgage lender to release one ex partner from a joint mortgage. It is up to the mortgage lender to decide whether they are content to release somebody from the mortgage covenants and this may often happen if there is going to be a transfer of equity. Such a transfer occurs where one person’s legal and beneficial interest in a jointly owned property is passed to the other co-owner(s). The court does have the power to make this order.

      I think you may be thinking of the need for a consent order setting out the financial agreement between your partner and his wife arising in any divorce proceedings. Your partner should ask the mediator to explain precisely what has been agreed: such an agreement should be in the form of a Memorandum of Understanding (or Heads of Agreement). That agreement should then be drawn up into a consent order by solicitors. Sorry, Julie, I know this will be an expense but you are dealing with property interests here (and there may well be other aspects of the agreement such as maintenance or pension interests). Your partner may be able to find a solicitor who will offer a fixed fee to draft the consent order.

  11. Jane September 20, 2012 at 5:17 pm #

    I own 3 properties with my partner and we have lived together for 10 years although not married. All properties are owned jointly but I realise this is now wrong as if anything happened to me then my son from my previous marriage would not automatically inherit.

    I am having difficulties with my partner now and we are deciding whether to go our separate ways. If I sever the tenancy would the shares be automatically equal or could he argue as he earns more than me? Also what happens to savings which are in my name only?
    I would like everything to be fair and we drew up a declaration of trust on our property we live in – would this apply to future properties we have subsequently bought?

  12. DivorceFT September 24, 2012 at 10:40 pm #

    Hi Jane,

    The usual wording in a Notice of Severance does not specify the respective interests in the tenancy that is being severed. Most solicitors tend to see the severance as being ‘neutral’ in the sense that the respective shares could be presumed to be 50/50. It is, of course, possible to amend a Notice of Severance to specify the interests: 60/40 etc but I think this is unlikely to have any weight with a court unless the person receiving the notice countersigned it before it was lodged at district land registry. The only way to be certain is to have a declaration of trust that lays out the shares 60/40 or 70/30 and so on.

    I don’t think the fact that your partner earns more than you do would give him a greater share unless he was going to claim, for example, that he paid all the mortgage premiums and is therefore entitled to a greater share.

    If the savings are in your name then they are your savings. An exception may arise if for instance your partner claims (by way of example) you had an agreement that if he paid all the mortgage payments then you would pay the same amount each month into your savings account with the clear understanding that half of these monies were effectively his. A court may increase the extent of his severed share in a jointly owned property to greater than 50% in order to give him a credit for half of the savings that you were keeping.

    If you have a declaration of trust on the property you live in, then the declaration applies only to the property specified. You will need separate declarations of trust in respect of each property you own with your partner.

    Remember: you must have a Will specifying where your interests arising under the severed tenancies, are to go.

  13. Julie September 27, 2012 at 11:31 am #

    thank you for your reply.
    I realise I haven’t been very clear. Having looked again at the wording on the Notice of Severence, which was drawn up by my partner’s solicitors in 2010, it is, indeed a consent order, with a case number. My partner’s ex is happy to sign it.
    My question is where will it go to court? Will it be processed as part of the divorce proceedings or does it need to be dealt with separately and, if so, what is the procedure we need to follow, please?
    Finally, I have simply changed the date on the consent order to 2012, instead of 2010. Will the case number on the consent order still be valid?

    Thanks again for your time and trouble

    Julie

    • DivorceFT September 30, 2012 at 10:00 pm #

      Hi Julie,

      That is clearer, thanks. The consent order should be submitted to the court that is dealing with the divorce proceedings. The court will not be able to approve the consent order until Decree Nisi has been pronounced by the court in the divorce proceedings. The case number on the consent order should be the same as that on the divorce proceedings.

      It is fine to change the date on the consent order but any handwritten amendments on a typewritten order should be initialled by your partner and his wife before submission to the court.

      As for the procedure to lodge the consent order, there can be slight variations between the courts but you will probably need to:

      1. Provide two copies of the draft order (that is, two unsigned copies) and a third version which is signed by your partner and his wife and any legal advisers who are providing representation;

      2. A statement of information form (one each for your partner and his wife). The form can be filled out online or printed off for completion at leisure by visiting http://hmctsformfinder.justice.gov.uk/courtfinder/forms/d081-eng.pdffor If this link does not work then visit the Justice.gov.uk website, go to the Form finder search box and type in Form D81.

      3. The appropriate fee – which is, at time of typing, £45.00.

      4. Form A, for both your partner and his wife, which must be completed and then have written across the top “for dismissal purposes only”. You can find the Form A, if this link works, at http://hmctsformfinder.justice.gov.uk/courtfinder/forms/form-a-eng.pdf. If the link does not work then go to the Justice.gov.uk website again and type Form A into the form finder search box.

      • DivorceFT October 1, 2012 at 10:02 pm #

        Julie, you are most welcome.

  14. Julie October 1, 2012 at 5:54 pm #

    That is absolutely brilliant information. Thank you so much! I had thought to ring the court myself to ask questions and the lady I spoke to was most helpful but this is the icing on the cake – so detailed and specific.
    The forms are printed and ready to go.

    My partner is so happy to finally see and end to this nightmare – could be a great Christmas present for him!

    We are so grateful to you!

    Best regards

    Julie

  15. Laura October 8, 2013 at 9:14 pm #

    Hi
    Reading all of this with great interest. I received, at work, a letter from a solicitor acting on behalf of my ex husband stating that he was severing the joint tenancy to become tenants in common with equal shares.
    I had no knowledge of this. My exhusband (of now two years) moved out of the former matronial home where I live with my son of 8 years old, three years ago when he decided he wanted a divorce and moved to London. The house is in Cornwall.
    We bought the house two years before and had an interest only mortgage for the first three years of repayments, hence, withstanding the 5% deposit, no money has been paid off the mortgage from anywhere other than my personal bank account.
    I agreeved to think that he should just be able to decide to sever this tenancy into tenants in common with no consultation or without any negotiation as to what share would be apportioned to whom. Is this the case? I am also pretty annoyed to recieve solicitors letters at my work address regarding a house he knows I am living in, but guess that is another matter entirely!
    Any and all advice appreciated

    • DivorceFT October 8, 2013 at 10:08 pm #

      Hi Laura,

      Whilst I don’t offer advice on this blog I can make some observations. There is no requirement for your ex to warn you that he intended to sever the tenancy on your home. As you are married, the extent of your respective interests in the former matrimonial home will be determined (by agreement hopefully, but if not, by court order) using factors arising under section 25 of the Matrimonial Causes Act, 1973. What this means is that there will not necessarily be an equal split of the equity, especially if the house remains the family home for your 8 year old.

      And it is not just the equity in the home that needs to be sorted, there may be other capital claims, pension claims, and don’t forget child maintenance that will be payable by your ex and spousal maintenance (depending upon your respective incomes).

      Is it possible for you and your ex to attend mediation? I know he is miles away from you in London but if he returns periodically for contact with your son (I presume he is a child of the marriage?) you could coordinate the mediation around those dates.

      Most importantly, do you have a Will? If not, you need to get one PDQ as the notice of severance means that your distinct interest in the house will no longer pass automatically to your ex in the event of your death before any divorce is finalised. So if you wanted to leave your interest to your son on trust you will need a Will. Do not leave it to the intestacy rules to sort everything out because they can have unintended consequences.

      Finally, I see no reason for your ex’s solicitors to write to you at your work address. They knew where you lived (obviously). Unless, your ex told them that you were elsewhere and may not receive a letter if sent to the former family home. But even then, without giving you a legal lecture, there is no requirement to prove that the notice has been received, only that it should have come to your attention. I would politely remind them that they should use your home address in future for any further letters dealing with private and sensitive issues of this nature.

  16. Gordon January 18, 2014 at 10:01 am #

    Hi, Just after some guidance for my daughter.

    She was divorced approx. 3 years ago but the mortgage is still in joint names. Since the divorce my daughter has paid the mortgage and all household bills directly from her own bank account. Her ex husband rents a flat in the same town.
    unknown to her he cashed in the endowment policy ( It is a interest only mortgage taken out some 14 years ago ) This obviously means my daughter is responsible for the entire payment when the mortgage ends in approx. 10 years time.

    Her ex has now suggested severance of tenancy.as he wants to get a bigger place. They have a 5 year old daughter living with my daughter.

    What are the implications in his request?

    • Alan Larkin January 22, 2014 at 7:52 pm #

      Hi Gordon,

      Strictly speaking, there is nothing your daughter can do to stop her ex serving her with a notice of severance. But, just refer back to the main blog post on this subject. The severance does not in and of itself determine what the respective shares in the property will amount to. There is a nominal 50/50 share but a court (in the event of a dispute) can provide an order that the severed shares equate to, say, 50/50, 60/40, etc. If a notice of severance is sent to your daughter then she should make sure that she has a valid Will in place designating where her severed share in the home should go in the event of her death.

      Your daughter was divorced 3 years ago but I am guessing from what you say that there was no corresponding financial order given by the court, by consent, or otherwise. I presume the house is lived in by your daughter – it is in effect the former matrimonial home. I don’t know what financial arrangements were agreed between your daughter and her ex in the absence of a court order, but it strikes me that there are a number of financial claims that need to be settled (that should have been settled on divorce). It is important to know whether it was your daughter who was the petitioner in the divorce (if she was, hopefully ticking all the right boxes to keep her financial claims open) or if she was the respondent. But if your daughter wants to resolve these outstanding financial claims it is advisable for her to do so before she considers re-marriage, otherwise she cannot bring certain financial claims in respect of the former marriage. Your daughter may well be in a strong position, in view of looking after her 5 year old daughter, to obtain the lion’s share of the equity in the former matrimonial home. But, she may well have other claims arising out of the marriage, not just in respect of this property. The proceeds of the endowment policy, presently used solely by the ex, will be taken into account by the family court – he should not have liquidated that policy without accounting to your daughter for a share at least, of the proceeds.

      Your daughter really needs to get legal advice now as the guidance she needs depends upon the very specific facts of her former marriage, finances and present circumstances. I hope some of that is helpful.

      Alan

      • Gordon January 24, 2014 at 3:46 pm #

        Thanks for that Alan. My daughter divorced him and still lives in the matrimonial home and for the last 3 years has paid all the bills and mortgage without any assistance from her ex.
        I believe that there was an agreed settlement of 60/40 between them on the value of the house as it was at time of divorce following mediation.

        • Alan Larkin January 25, 2014 at 4:16 pm #

          Thanks, Gordon. Your daughter really needs to get some advice – the agreement arising out of mediation may still be relatively sound, even though it is now long in the tooth. Try to get a free consultation or at a fixed fee so a lawyer can run the rule over the situation.

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