Know Your Rights - Joint-ownership of properties

BUYING a property under joint-names among spouses, family members, business associates and friends is common. One of the major considerations is the combination of joint-names to convince the financier to grant a banking facility to part-finance the purchase. However, there are legal issues which one has to seriously consider before embarking on this venture.
Undivided share
Section 342(1) of the National Land Code 1965 states that "co-proprietorship" means that holding of alienated land by two or more persons or bodies in undivided shares. This means that each registered proprietor owns his fractional share over every part of the property in question. The shares of the co-proprietors are deemed to be equal unless different proportions are specified in the memorial of registration.
Ability to transact the share
In theory, the undivided share is capable of being transacted. However, in reality, unless the sale price is way below market price, it is unlikely that the sale will be attractive. There are many potential problems associated with such transactions.
Issues
Very often, there arise differences between the co-proprietors relating to payment or time of payment for its relevant contribution relating to quit rent, assessment and other payments. The co-proprietor who takes the lead in advancing monies for the other co-proprietors may end up with uncollected debts from advances made.
Some may also worry about what happens upon the death of any of the co-proprietors. The share which the deceased co-proprietor was formerly entitled to shall not pass to the other or others, but shall devolve upon his personal representatives or, as the case may be, be disposed of in the like manner as its other assets under the will or under the laws of intestacy.
In the event that more than one person buys a property whereby an individual title or strata title for the property has yet to be issued by the land authority, there is no exclusivity on who owns a certain part of the property unless an agreement has been entered among the co-proprietors on the area on which each party shall own.
Similarly with the proportion of the shares, the co-proprietors are deemed to have equal shares on the property unless an agreement has been entered among them on the proportion of the share each party shall own, otherwise the interest of the co-proprietor who claims to have a bigger share is not protected. As long as the co-proprietorship continues and without any specific intention of the parties, each of the co-proprietors shall be entitled to the possession and enjoyment of the whole.
However, the co-proprietors of the property may at any time apply for the partition of land from the relevant land authority subject to laws and procedures stated in the National Land Code, so as to vest in each of them, under a separate title, a portion of the land as the co-proprietor intended to.
In cases where properties are acquired for joint-investment purposes, it may be prudent to set up a company to buy the property. In this instance, the right of each contributor is in the shares held in the company only and not the property.
The problems raised in this article represent some of the problems encountered in such transactions and not a full list of what may take place. Thus, one shall take into various considerations and to be very precise on the intention of each party before buying a property under joint-names to prevent any unnecessary problems.
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