Death of Owner: How Shared‑Ownership Shares Are Handled When Someone Passes Away

Finding out a co‑owner has died is tough enough without the legal headaches that follow. If you own a share of a home under a shared‑ownership scheme, you’ll want to know exactly what happens to that share, who gets it, and how to keep the property running smoothly.

First off, the type of ownership matters. Most shared‑ownership homes are held as either joint tenants or tenants‑in‑common. Joint tenancy means both owners have equal rights to the whole property, and the surviving owner automatically inherits the deceased’s share. Tenants‑in‑common let each owner hold a specific percentage, and that percentage can be passed on according to the owner’s will or intestacy rules.

What to Do Right After a Co‑Owner Dies

Step one is to locate the death certificate and any will. If there’s a will, it will name an executor who’s responsible for handling the estate. If there’s no will, the law decides who inherits based on family ties. Regardless, you’ll need to inform the housing association or the shared‑ownership provider as soon as possible. They’ll ask for proof of death and may request the will or probate documents.

The provider will also check the mortgage balance. If the deceased’s share was mortgaged, the mortgage must stay current. Often the surviving owner can take over the full mortgage, but the provider might require a fresh affordability check. If the estate can’t cover the mortgage, the provider may force a sale of the whole property to recover the debt.

Who Gets the Share?

In a joint tenancy, the surviving owner becomes the sole owner automatically – no probate needed for the share. In a tenancy‑in‑common, the deceased’s share goes to the beneficiaries named in the will, or to the next of kin under intestacy rules. Those beneficiaries can choose to keep the share, sell it back to the provider, or sell it on the open market (subject to any right of first refusal the provider may have).Keep in mind that most shared‑ownership agreements give the housing association the first right to buy the share back. This protects them from having an unknown party step into the scheme. If the right of first refusal is exercised, the provider will pay the market value, and the beneficiaries receive cash instead of a property share.

One practical tip: talk to the surviving owner (or the executor) early about their intentions. If they want to stay in the home, they may need to buy out the share or refinance the mortgage. If they plan to sell, start gathering a valuation and understand any fees the provider charges.

Finally, don’t forget tax implications. Inheritance tax may apply if the estate value exceeds the threshold. The beneficiary might also face Capital Gains Tax when they eventually sell the share, based on the increase in value since the original purchase.

Dealing with a death in a shared‑ownership setup can feel overwhelming, but breaking it down into clear steps helps. Get the death certificate, inform the provider, check the mortgage, identify the ownership type, and understand who gets the share. With the right information, you can protect the property, avoid costly mistakes, and move forward with confidence.