Severing a joint tenancy

Property, joint tenant, will & survivorship

Property held as a joint tenant, the survivorship right of a joint tenant and the giving of a property held as joint tenant by Will are all long settled law. It’s been suggested that a recent court case in Singapore has changed the law on this area. Before we discuss this recent case here’s an explanation of the basics.

Joint tenancy vs tenancy in common

In Singapore real estate (land, houses, HDB flats, apartments, factories, etc) can be held in joint names in one of two ways. It can be held in joint tenancy and it can be held as a tenancy in common.

What is a Joint tenancy?

A joint tenant is someone who is a joint owner of an undivided share of real estate.

What is a tenancy in common?

A tenant is common is someone who is a joint owner of a distinct divided share of real estate.

So, whilst joint tenants and tenants in common both own shares in real estate the first difference is that one owns an undivided share and the latter owns a divided share. An easy way of understanding the difference is to look at something else like a cake.

Tenants in common are like owners of a cake that’s been cut. One tenant in common might own 1/2 of the cake/property, another might own 1/4 and 2 others might own 1/8 each. Joint tenants are like joint owners of a cake that’s uncut.

Severing a Joint tenancy

As with cake, once you ‘cut’ real estate into divided shares or parts that piece of real estate cannot be ‘uncut’.

Sever a joint tenancy and it becomes a tenancy in common. A tenancy in common cannot be turned back into a joint tenancy once a joint tenancy is severed.

What is a Joint tenancy with right of survivorship?

Together with owning an undivided share of real estate joint tenants have rights of survivorship.

Survivorship rights means that with 2 of more joint tenants the survivor or survivors between them will acquire the undivided share of any joint tenant who passes away.

Let’s say there are 3 joints tenants, A, B & C. If C dies the A & B automatically become entitled to C’s share of the property and if B then dies A becomes the sole owner of the property. Property held in joint tenancy cannot be given by a joint tenant in his/her Will to someone else as the survivorship right prevents this.

The joint tenant’s survivorship right then is part and parcel of the nature of joint tenancy under Singapore law. It has been suggested that the Lim Estate case means the survivorship right of a joint tenant is no longer automatic in Singapore. We’ll discuss the Lim Estate case in the next article.

Legal interests vs equitable interests

You can own property as a legal owner or you can own an equitable interest in property as a beneficial owner at a point in time. Mostly people own both legal and equitable owner at the same time.

If you buy a car and you have the car registered in your name then you are the legal owner. If you buy it with your own money then no one else has an equitable interest in the car. Now if you’re going to work overseas for a year you might transfer the car’s registration into someone else’s name to hold for you whilst you’re away. If no money is exchanged and that other person is just holding it for you then he/she is the legal owner but you remain the beneficial owner with an equitable interest in the car.

In the old, old days before the introduction of the ‘Torrens’ system of land registration we had ‘common law’ titles.

Under the ‘common law’ system of land ownership an owner of property could go to a money lender to borrow money. This would be done by depositing the property’s title deeds with the lender in exchange for a loan. By holding the title deeds the lender became the legal owner but the borrower continued to have a beneficial interest in the property with an ‘equity of redemption’. When a borrower repays the loan in full he/she could exercise the equity of redemption and demand the return of the title deeds.

This is a simplified explanation of joint tenants vs tenants in common, survivorship rights, legal interests vs equitable interests intended for the general public and not meant as an academic treatise. It’s intended as background to understanding the court case of Lim Choo Hin (as the sole executrix of the estate of Lim Guan Heong, deceased) v Lim Sai Ing Peggy  which is discussed in the next article (see: http://blog.ezwills.com.sg/right-of-survivorship/).

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13 May 2022

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