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Joint Ownership of Property in Marriage(2)

In the previous post, the focus was on joint tenancy as a viable option to be considered by married couples intending to invest in the real estate market. This week, we will be examining the concept of tenancy in common, as an alternative to joint tenancy.

Tenancy in common is a type of shared ownership where two or more individuals jointly own property with an individual interest in the property. In simple terms, tenancy in common means that husband and wife jointly own property, but are free to deal with their share of the property as they see fit, and without the consent of the co-owner.

Binta and George purchase a house, and decide to be tenants in common. If they share equal ownership of the house, Binta can sell, let or even gift her share of the house independently, and without the consent of her husband, George.

Tenants in common may have equal shares in the property. However, it is possible to have unequal interest in the property. In some cases, the couple may go for an unequal sharing formula.

If Binta and George, as co- owners in this context purchase a parcel of land at N10million, with Binta contributing N6 million, and George N4 million, they may decide that Binta owns 60 per cent of the property, while George owns 40 percent.

Another characteristic of tenancy in common is that, unlike joint tenancy, it excludes survivorship rights. The exclusion of the right of survivorship means that the co-owner can bequeath his share of the property to his preferred heirs, as opposed to the practice in joint tenancy where the deceased’s property automatically goes to the surviving co-owner/ spouse.

Tenancy in common affords the couple a certain degree of independence within the framework of a joint project, in the sense that the couple can take individual decisions regarding their interest in the property, without interference from either spouse.

Tenancy in common also has its drawbacks. For one, the option of an unequal share in the property may lead to subsequent disagreements between the couple, especially in cases where the property is to be sold. Joint tenancy avoids this problem as ownership within that framework is equal in all cases.

Tenancy in common may not be the best option for a couple who are looking to inherit one another as it does not confer survivorship rights on the surviving spouse on the death of a co- owner.

Tenancy in common may strip co-owners of control over the property, in the sense that the tenants in common deal with the property independently and without the consent of the co-owner.

For instance, Binta may legally decide to convert her share of the property to a warehouse without George’s consent or endorsement.

This, of course, would not be the case in joint tenancy where all dealings with the property are done jointly.

It is pertinent for married couples to tailor their joint investments to their needs, in order to come up with a hassle free system which would lead to a harmonious business partnership between husband and wife. More importantly, when deciding on either joint tenancy or tenancy in common, the couple should take care to document transactions and investment for convenience and security purposes.

As always, it is necessary to seek knowledge and information on real market trends and consult legal real estate professionals in order to have a better understanding of the available options and make informed decisions.

Eazyhomes Company

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