Co-Ownership & Land Tenure Law

Land Tenure Law

• Dr Glen Mola Pumuye discussed this law.

Co-Ownership

• This refers to legal relations where two or more entities have equal rights to use and enjoy property (Prof Tracht: 1994).
• It exists when there is ownership with two or more people of one thing.
• It involves two or more people owning a parcel of property.

Characteristics of Co-Ownership

• Plurality of Owners: Two or more persons own the property.
• Undivided Shares: Each co-owner owns a proportionate, undivided share of the property.
• Proportionate Ownership: The share of each co-owner is presumed equal unless proven otherwise.
• Mutual Relations: Co-owners must respect each other's rights.
• Ownership can be fragmented to form a complex matrix of interlocking interests.
• This can be sliced across time, split at a qualitative level, or divided to separate management from enjoyment.
• In each case of fragmented ownership, interests are distinct from each other.
• An interest in possession gives its holder different rights from the remainderman.
• A legal interest gives different rights than those enjoyed by equitable interest holders.

Types of Co-Ownership

• Joint Tenants: Expressed as "to A and B as joint tenants".
• Tenants in Common: Expressed as "to A and B as tenants in common in equal shares".

Presumption

• Common law recognizes Joint Tenants.
• Equity recognizes Tenants in Common.

Joint Tenants

• This occurs when two or more people purchase a property together with equal interest and rights.
• This is a common form of ownership for married couples.
• To be considered joint tenancy, four conditions must be met:
  • The tenants must obtain the property at the same time.
  • Equal property interest by each tenant.
  • All tenants must acquire the title deed from the same document.
  • Equal rights of ownership must be exercised by all tenants.

Advantages of Joint Tenancy

• If one co-owner dies, the ownership rights automatically transfer to the remaining owner(s).
• If Bob and Cindy are married and Bob dies, Cindy automatically becomes the full owner, avoiding probate and transfer taxes.
• Unmarried persons in joint tenancy also avoid probate, but may need to claim the inherited property as a gift.
• Automatic transfer of ownership is referred to as the right of survivorship.
• Joint tenancy guarantees equal rights and ownership for all parties. With two owners, each controls 50%. With five owners, each controls 20%.

Disadvantages of Joint Tenancy

• A creditor can terminate a joint tenancy if one tenant owes a debt, even if the other co-owners are not involved in that debt.
• Joint tenancy is not a good option if a person doesn't want ownership to transfer automatically to other owners but to their heirs instead.
• If co-owners cannot agree on what to do with the property, a partition action lawsuit may be needed, which can be costly and time-consuming.

Tenancy in Common

• If multiple people hold title under tenancy in common, each can sell their ownership interests at any time.
• Unlike joint tenancy, a tenancy in common agreement allows for multiple owners to own different percentages of the entire property.
• One tenant could own 30% while others own 35% each.
• The entire property is available to each owner, regardless of percentage; this is called undivided interest.

Advantages of Tenancy in Common

• Each owner does not need to have equal shares.
• One owner could have 25% ownership while another has 75%.
• This type of joint ownership is ideal for groups or married couples who do not wish their share of the property to transfer automatically to the surviving spouse upon their death.
• The widow may wish to jointly own property through tenancy in common to leave her share to her children instead of her spouse.

Disadvantages of Tenancy in Common

• If you do not have a will and hold title via tenancy in common, your share of the property will be distributed according to your state's probate laws, lacking a right of survivorship.
• Co-owners can sell their portion without your say, meaning that owners could find themselves co-owning property with complete strangers.
• If three roommates hold title under tenancy in common and one sells, the remaining two have no say.

Joint Tenancy v Tenancy in Common

• Joint Tenancy: Four conditions must be met, including equal interest, equal ownership, simultaneous obtaining of property, and same title document.
• If one joint tenant dies, their share of the property passes automatically to the surviving tenant or tenants.
• If one owner wishes to terminate their ownership, they can sell to the other owners, or the joint tenancy may be converted to tenancy in common among the remaining tenants.
• Tenancy in Common: Tenants may own different interests in the property, and no requirement for obtaining the property or titling at the same time.
• Owners may convey property to anyone upon their death as long as it's written in their will
• Any tenant can sell their ownership stake at any time for any reason. If an owner passes with no will in place, the property goes to probate

Types of Tenants in Chief

• Unity of possession: Each of the co-owners is entitled to possess the whole of the property, which is shared and owned together. This is to be enjoyed as joint tenants.
• Unity of interest: Each of the tenants must be the same in nature, extent, and duration.
• Unity of title: Each tenant must derive their interest from the same document, which may be a transfer of sale.
• Unity in time: Interests of tenants vests at the same point in time.

The Right to Survivorship

• This determines what happens to co-owned property after one of its owners dies.
• It is found only in joint tenancy, specifying simultaneous ownership of property such as a house, land, or money.
• In all joint tenancies, ownership of the remaining property passes to the surviving tenants or successors.
• A powerful legal right takes precedence over other claims upon the property, and is recognized by statute.

Conclusion of Co-Ownership

• Joint Tenancy and Tenancy in Common have unique characteristics.
• Key concepts include:
  • Unity of possession: Each co-owner is entitled to possess the whole of the property.
  • Unity of interest: Each tenant must be the same in nature, extent and duration.
  • Unity of title: Each tenant must derive their interest from the same document.
  • Unity of time: Interests of tenants vests at the same point in time

Strata Title

• This means that you have individual ownership over your apartment or townhouse (called a 'lot'), as well as shared ownership over the 'common property'.
• Common areas, like the driveway, foyer and garden are then managed by a legal entity.
• This is a system that allows individuals to purchase and register a title over a specific unit, such as an apartment, duplex, or townhouse, within a multi-storey building.
• This also applies to horizontal developments, where individual owners have exclusive rights to their respective homes and the land on which they are built.
• Common areas and amenities within the community are shared.

Key Features of Strata Title

• Ownership of Property: When you buy into a Strata Title scheme, you own your specific property (unit/flat/home) and also share ownership of common property such as gardens, fencing, pools, and elevators.
• Owners' Corporation: Upon purchasing a property within a strata scheme, you automatically become a member of the Owners' Corporation.
• This corporation consists of all unit owners, and is responsible for making key decisions on the management of the strata scheme.
• An Executive Committee, elected by the Owners' Corporation, performs the functions of the corporation, ensuring that the strata scheme is managed efficiently and in the best interests of all owners.
• Strata Managers, contracted by the Owners' Corporation, are responsible for the day-to-day management of the strata scheme, ensuring that all common property and shared services are maintained.

Benefits of Strata Title

• Affordability: Strata Titles create more affordable options for property ownership in areas where outright land and building purchases would be expensive.
• Investment Opportunities: Investors can directly invest in physical properties through Strata Titles, offering an alternative to purchasing shares in property companies.
• Ease of Financing: Strata Titles are generally more favourable for financing by banks and lending institutions, making it easier for individuals to secure loans for property purchases (Department of Lands, Online: 2024).