Joint Tenancy Vs Tenancy In Common

Joint tenancy is a form of contract applied when two or more individuals have common ownership over immovable property. This is the default type of ownership that is applied when two or more people purchase a property. In this scenario, each individual owner is entitled to the entire property as a whole.

There are two defining characteristics of a joint tenancy. The first one is the absence of shares, meaning that all parties own the entire property equally. There is no mention of the ownership of separate shares in a joint tenancy; therefore, it is treated as joint ownership. 

The second and most important is the right of survivorship which is automatically activated when one co-owner dies. In this situation, all ownership powers of the deceased owner will be transferred to the remaining co-owners. If there are only two co-owners in the agreement, then the entire property will be transferred to the surviving co-owner. 

It is important to note that the correct and proper form should be declared for a joint tenancy to apply. For example, if the agreement does not mention the right of survivorship, it cannot be considered a joint tenancy. However, this declaration is not necessary for joint ownership of registered property, meaning joint tenancy is the default agreement. 

In a joint tenancy, a co-owner does not have the right to sell a portion of the property. This is because both owners have undivided shares in the whole property. This also makes it impossible for one co-owner to throw out the other.  

The particulars of a joint tenancy make de-coupling a complicated issue. For those of you unfamiliar with the term, de-coupling is when one owner buys the shares of the other owner. 

Co-owners wanting to de-couple will have to officially go through a declaration of severance. A copy of the instrument of severance must be submitted to the Singapore land authority. If you and your spouse are going through this road, we recommend speaking to a property lawyer.

Tenancy-in-common is a form of ownership where each party owns separate and sometimes unequal shares within the same property. Each co-owner has private ownership of their own respective shares and may do with it whatever they please. 

Unlike in joint tenancy, co-owners can sell or transfer their share of the property without any legal interference. There won’t be any issues if each co-owner only touches their own shares. 

When it comes to the death of a co-owner, their respective shares will be passed on to the official beneficiaries. Alternatively, if the deceased co-owner has a will, then the particulars of the will shall be carried out by law. The shares of the surviving party will obviously not be touched.

The first difference between the two is the proportion of ownership. Joint tenancy has an equal proportion of ownership for every co-owner involved. Meanwhile, tenancy-in-common does not necessarily mean an equal proportion of ownership. 

There is no individual freedom for a co-owner to sell or transfer their property in a joint tenancy. A tenancy-in-common however, allows for the selling or transfer of an individual co-owners share in the property. 

Joint tenancy employs the right of survivorship meaning that a deceased co-owners share will be taken over by the remaining owners. This is not applicable in a tenancy-in-common where the shares of the deceased co-owner are passed on to his/her beneficiaries, or in accordance with the will.

Pros & Cons of Joint Tenancy and Tenancy-In-Common

As you can imagine, both ownership types come with their own advantages and disadvantages, which we will briefly discuss. 

Joint Tenancy

This form of agreement is advantageous for married couples as the transfer of ownership upon death is pre-defined. You won’t have to consult the government or need a will. 

However, that also means you cannot pass down the property to a beneficiary of your choice.

Tenancy-in-common

An advantage here is that each co-owner has separate and distinct shares in the property. A co-owner can do whatever they wish with their share of the property, including passing it on to a beneficiary or selling it off. Having this freedom gives it an advantage over joint tenancies. 

However, this same freedom of choice might be a hindrance to the co-owners of the property. Since each owner can sell their share, the other owners have no say in the comings and goings of third parties involved. 

It is not rare for the government to take over the estate matters in case of a co-owners death. This is true in cases where the deceased co-owner does not have a will for their share of the property. 

Converting a Joint Tenancy to a Tenancy-in-Common

A joint tenancy can be converted into a Tenancy-in-common by going through a unilateral declaration of severance. After both parties agree, this declaration of severance must be registered at the Singapore Land Authority. 

Finally, both parties must sign a statutory declaration of their intent before an official commissioner for oaths. After this, the joint tenancy will then be converted into a tenancy-in-common with both parties having 50-50 shares in the property.

It’s up to you, really! Both types of ownership are mutually beneficial in their own ways. What type of ownership to choose really depends on why you’re buying the property. 

A joint tenancy is ideal if you’re buying a generational home for you and your spouse to live in permanently. The law of succession in joint tenancy is quite apt for married couples who are looking to start a family. Alternatively, choosing a tenancy-in-common also works here. 

On the other hand, if you’re buying the property for business purposes, tenancy-in-common is the obvious choice.

If you and your co-owner have taken a mortgage loan, then the loan repayment structure should be written in the loan agreement. However, it is often a private agreement between the co-owners in most cases. In fact, most people in this situation rely on an oral agreement, while only a few actually employ an electronic agreement.

In some cases, co-owners may decide to change the type of ownership to better suit their needs. While doing so is straightforward, it is essential to note that some cases require the existence of certain factors. 

Converting a tenancy-in-common to a joint tenancy requires that both the owners have 50-50 shares in the property. Conversion is not possible if the ownership ratio is, say, 70-30. This is because a joint tenancy is formed under equal ownership of the property. 

If one owner has more shares than the other, they will have to transfer some shares to the co-owner. This is done so that both parties can maintain a 50-50 ratio. 

All owners need to sign a notice of severance and fill up the SEV form before sending it to the land register. In the case of unregistered land, you can only use the notice of severance and not the SEV form. 

We recommend you get the registration done via pre-paid registered post for a quick and reliable outcome. Don’t forget to collect your subsidiary certificate of title for your leased property. If you have lost the original copy, then you can always issue a duplicate certificate of the same.

We cannot talk about this conversion process without having a discussion on severance. Joint tenants need to go through an official method of severance that breaks the joint ownership. Any instrument of severance is valid here, whether it’s divorce, severance by notice, or any other mode of severance provided. 

Once the issue of severance is cleared, the owners can then sign a unilateral declaration stating their intentions. 

As mentioned before, all co-owners must have equal shares in the property before it can be converted. If there are two owners, the ratio must be 50-50; if there are more than two owners, it should be divided equally. 

HBD flat owners can convert the ownership via HBD lawyers who will take you through the process. All you have to do is fill up the application form and hand it over to them. This form is available as a physical document in any HBD branch or as an electronic document on their website. It is important to note that the document is chargeable for a fee of 50 $. 

There may be cases where the co-owners cannot come to a mutual agreement regarding changing the manner of holding. If that is the case, the first option is to get a court order to partition the percentage share in the property. 

However, it is not a suitable option for an apartment or house, as no buyer would want to purchase only half of the property. Similarly, a piece of land, once divided, might not make the minimum land plot area required for sale. 

The second option is to get a court order, including religious mandates like a fatwa decision, for the sale of the property. In this case, the unwilling co-owner has the right to buy the share of the willing co-owner. Failure to do so will give the willing co-owner the right to sell his unit of possession in the market. 

If there is any outstanding mortgage, it will be covered using the proceeds of the sale of the land plots, flat units, or respective estates. Once all mortgage securities are handled, the remaining amount is transferred to the co-owner. 

It is virtually impossible to sell your property in an en-bloc sale. In this scenario, under the strata development law, a single individual does not have the right to conduct an en-bloc sale.

Trying to conduct an en-bloc sale automatically makes it a tenancy in equity as you only own a single unit of possession. You will literally have to convince the owners of the neighboring land to sell as well.

Let’s say you want to switch the holding manner of your entire estate from joint tenancy to tenancy-in-common. The easiest way to do so is by hiring a real estate attorney to handle all your estate matters. Alternatively, you can also take the estate duties into your own hands. 

Once a joint tenancy is switched to tenancy-in-common, both co-owners will have an equal share ratio of 50-50. It is important to note that estates in bankruptcy may come with complications.