Can Jointly Owned Property be Seized?

Owning property together is meant to be a great adventure that you share with each other. Whether it be settling into your forever home or making those first tentative steps into living with others. It can be a time of excitement and intrigue, but it can also be a time of stress and worry. Financial responsibilities such as a mortgage, a credit card or a loan can weigh heavy for many and a lack of control over money can soon see cracks appear in the harmonious home.

Unfortunately, this can sometimes lead to the property being seized should bankruptcy rear its head but failures to stay on top of tax, partaking in criminal activity or a divorce could also contribute towards the seizure of a home.

When it comes to bankruptcy, without any form of legal agreement in place, those looking after the bankruptcy proceedings will assume that the ownership is split 50/50 even if it in fact could be a far more diverse split.

Luckily, if you are not the person declared bankrupt, you will not be liable for any of the debts and your portion of ownership is protected. It’s just proving your amount of ownership to protect your home that can prove costly and complicated.

What are tenant types in property ownership?

There are two types of ownership for tenants. Joint tenants and tenants in common.

Joint Tenants

This form of ownership is where each person owns the whole property and has equal rights to it. When one person dies the property automatically transfers to the surviving owner outside of probate which means you cannot pass on your part of the ownership of the property in a will.

Tenants in Common

In this joint ownership co-owners own a specific share of the property which is different for each owner. The shares can be equal or unequal and can be transferred or sold without the consent of the other co-owner. The property does not automatically go to the surviving owner if one of them dies and they can pass on their share in a will or the laws of intestacy.

What leads to the seizure of property?

There are several reasons why your property can be seized and usually, these are due to financial difficulties or legal issues related to either you or one of your co-owners.

The most common causes of property seizure are:

Property seizure due to divorce

During divorce proceedings if you and your spouse cannot agree on the division of assets including the property the court may order it be sold and the proceeds divided between you. In some cases, to avoid this, couples amicably agree to a quick house sale but in others, there may be a more drawn-out process when you try to sell your house when separating or divorced.

Property seizure due to mortgage default

If you fall into mortgage arrears, the mortgage lender may seek possession of the property through the courts to sell it and repay the loan. Typically, this happens after several missed payments and if you have failed to come to an arrangement with your mortgage lender.

The lender will need to obtain a court order to seize the property. There are things that can be done to stop house repossession though. Turning to cash house buyers or getting a lodger for example can both help.

Seizure of property due to bankruptcy

If the property was owned as beneficial joint tenants, the bankruptcy order severs the joint tenancy. This means that the ownership structure changes and the co-owners now hold the property as tenants in common.

So, if a joint tenant becomes bankrupt, their share of the property may be taken over by the bankruptcy trustee. The other co-owners share remains unaffected, and they continue to hold their portion of the property.

Property seizures for tax liabilities

If one of the joint tenants has outstanding tax liabilities, HMRC may take action to recover the debt. However, HMRC’s claim would typically be limited to the share of the property owned by the joint tenant with the tax debt.  The other joint tenant’s share would generally not be directly affected.

Property seizures for fraud and criminal offences

If a jointly owned property is used in connection with fraud or criminal offences, it can be seized by the authorities. This is because the authorities have the power to seize assets that are believed to be the proceeds of crime or that are used in connection with criminal activity.

They are required by law to adhere to specific legal procedures and gain the required appropriate court orders or legal authorisation to seize the property.

Gaffsy says … If you jointly own a property and are worried about it being seized, seek advice from a solicitor or a debt charity and they can help you understand your options.

Can I stop my property from being seized?

If you jointly own a property and are concerned about the possibility of it being seized, it’s crucial to understand your options

Seek Legal Advice

Consult with a solicitor who specializes in property or debt-related matters. They will be able to review your situation, ensure the law is being followed correctly and provide you with specific advice and guidance. Alternatively, contact Citizens Advice, they can provide confidential advice online, over the phone and in person for free. Understanding your rights and the legal processes involved is crucial in protecting your jointly owned property.

Communicate with Creditors

If some outstanding debts or liabilities threaten the seizure of your property, it is essential to open the lines of communication with the creditors. Discuss your financial situation and explore potential alternatives to property seizure. If you propose repayment plans and explore other arrangements creditors may be willing to negotiate to help you avoid losing the property.

Debt Resolution Strategies:

It could be a good idea to speak with a financial advisor or a debt management professional if you have an indebted property as they may be able to provide you with a financial strategy and plan to restructure your debts and negotiate settlements. If you act quickly and show that you are finding ways to address your financial obligations, you may be able to reduce the risk of property seizure.

Consider Mediation or Arbitration

If you are in dispute with your partner (joint owner) and can’t find common ground, consider mediation or arbitration as these processes provide a neutral place for negotiation and can help you find solutions that protect your property.

Bankruptcy Proceedings

In cases where personal bankruptcy is a consideration, consult with a bankruptcy specialist as they can guide you through the process. Bankruptcy laws may offer protections for jointly owned property, and a solicitor will be able to explain the implications and potential outcomes in your specific situation.

How can Gaffsy help?

If you find yourself in a situation where you have jointly owned property that may be at risk of seizure, it’s crucial to explore every option available to you. If you have sought advice and decided to sell your jointly owned property to avoid seizure time is probably of the essence.

This is where Gaffsy, a reputable and genuine cash house buyer can assist. We have helped many property owners obtain a quick house sale thanks to the way we operate. We do not need to secure funding to buy any home and we can therefore offer, exchange and complete a house sale quickly.

Putting you first we always work to a timeframe that suits you. We buy any house in any condition, in any location making a quick house sale achievable at any time.

With a free no obligation cash offer available within an hour, you could be selling your property and avoiding seizure of your property in as little as 24 hours! With legal fees covered and a fully transparent service, Gaffsy can ensure the stress of property sales is removed in an instant! Contact us today!