Converting a Joint Tenancy to a Tenancy-in-Common
Immovable property (houses being the most common example) in Singapore can either be held in joint tenancy or as tenancy-in-common. The decision to hold the immovable property in either manner has to be made at the point of purchase or transfer of ownership. The manner of holding the immovable property will be reflected in a registry maintained by the Singapore Land Authority (SLA).
Difference between Joint Tenancy and Tenancy-in-Common
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Happy Pi(e) Day! Swipe right ? for an overview of how immovable properties can be held, explained using pies! ? – Apart from the differences between these 2 manners of holding property, it’s also important to keep in mind that it’s possible to convert the manners of holding in a property from one to another! ?♀️ For example, tenants-in-common can convert their holdings to joint tenancy if they already have equal shares in the property. The same applies for owners severing a joint tenancy to convert their holdings to tenants-in-common. If one owner needs to transfer part of their share to another owner to make their shareholdings equal, such transfer may be subject to stamp duties as well. ? – Though the concepts of joint tenancy and tenants-in-common may seem daunting at first, we hope this guide helps to make them easy as pie to understand! ? #SingaporeLegalAdvice
In joint tenancy, the joint owners own/hold the whole interest in the property. There are no separate shares. In contrast, tenants-in-common own the same property in definite and separate share in the property.
The consequence of holding property in joint tenancy is that the right of survivorship applies. Upon the demise of one of the joint tenants, the surviving tenant takes sole ownership of the whole property. This is regardless of whether the deceased joint owner has left behind a will, and whether they wish for the surviving joint tenant to inherit the property.
The right of survivorship does not apply to a tenancy-in-common as each tenant holds the property in separate and distinct shares. When death occurs, the surviving tenant will be entitled to only his share in the property. However, the manner of holding has little implication for mortgage loans as loan repayment is a joint and several liability for the mortgagors/borrowers.
The disadvantages of tenancy-in-common are that existing co-owners have no say on new co-owners coming onboard. This could happen if one of the co-owners sells their shares in the property to a third-party, and can result in disagreements among the existing and new co-owners if they don’t get along.
Converting the Manner of Holding in the Property
It is possible to change the manner of holding the property from joint tenancy to tenancy-in-common. Notably, severance of a joint tenancy can only be to a tenancy-in-common in equal shares. For instance, 2 joint owners of a property will hold 50% share each in a property converted from joint tenancy to a tenancy-in-common upon severance.
Vice versa, tenants-in-common can convert their holdings by way of declaration to joint tenancy only if they are tenants-in-common in equal shares. Any property owners contemplating a change in manner of holding might be required to transfer part of their interest to the other tenant, and this transfer will be subject to stamp duties as well.
In addition, if the property is under a mortgage, you may need to get the consent of the mortgagee bank before you can convert the manner of holding in the property.
In Singapore, the “conversion” of manner of holding is done by lodging and registering the relevant Instrument of Declaration at the Singapore Land Authority. The existing tenants (whether joint tenants or tenants-in-common) will have to sign a statutory declaration before a Commissioner for Oaths stating their intention to hold the property as tenants in common or joint tenants.
When the “conversion” is agreed upon by all tenants, all tenants will sign the same form to be lodged.
On the other hand, if one joint tenant wishes to change the manner of holding to hold the property as tenants-in-common but the other joint tenant(s) do not want to do so, the willing joint tenant will sign the statutory declaration stating their intention to change the manner of holding to being tenants-in-common.
The Instrument of Declaration will then have to be duly served on the other unwilling joint tenant(s) by a solicitor. As the procedure and steps to be taken thereafter can be complex, it is advisable to consult a property lawyer.
For HDB property, it is also possible to seek the assistance of HDB to change the manner of holding of the HDB property. More information can be found on HDB’s website.
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