Your search results

Unpacking Property Ownership: Joint Tenancy vs. Tenancy-in-Common

Posted by Jayson Ang on September 10, 2024

| 0

TLDR

When a property has multiple owners, the choice of ownership type is crucial to determine how shares are distributed upon a co-owner’s passing. Joint tenancy involves unanimous decisions and automatic transfer of shares to remaining co-owners upon demise. Tenancy-in-common allows independent stakes and share distribution based on investments or Wills. Couples often choose joint tenancy for automatic inheritance, while friends opt for tenancy-in-common for distinct share allocations. Singles can consider Joint Singles Scheme for co-owning properties. Careful consideration of advantages and disadvantages is essential, as switching ownership methods requires time and resources.

When a property has multiple owners, many may not realize the critical decision they must make regarding its ownership type. This choice dictates how the property’s shares will be allocated upon the passing of a co-owner. Therefore, making a prudent decision is paramount for surviving co-owners to prevent potential disputes over property ownership in the event of a co-owner’s demise.

In this article, we will delve into the intricacies of two ownership methods available to multiple property owners. Additionally, we will explore which ownership type is best suited for various scenarios, ensuring that your property remains in the right hands.

When a property has multiple owners, they often overlook the need to select a type of ownership. Yet, this decision holds significant weight in determining how the property’s stake is allocated after a co-owner’s passing. Thus, it is crucial for the remaining co-owners to make a wise choice to avoid potential conflicts over property ownership in the event of a loss.

In this piece, we will delve into the two possible ways of holding property with multiple owners. We will explore each method’s benefits and drawbacks, ultimately guiding you to select the most suitable ownership type for your unique circumstances.

Joint Tenancy

In a joint tenancy, the co-owners hold the keys to the property together. Rather than having individual slices of the property, they each have a hand in the entire pie. This means that any decisions regarding the property must be agreed upon unanimously by all co-owners, and the property itself can only be sold or mortgaged as one unit.

The concept of the right of survivorship adds a layer of intrigue to this arrangement. Should one of the co-owners pass away, their share of the property automatically transfers to the remaining co-owners, solidifying their bond and strengthening their hold on the property.

For example, picture a dynamic trio: John, Jane, and Daisy, who joined forces to purchase a charming HDB flat. Choosing to hold the property under joint tenancy, they created an unbreakable bond, and upon John’s untimely demise, his share of the flat became the precious inheritance of Jane and Daisy. Like a triumphant game of chess, their joint tenancy strategy allowed them to secure their legacy and carry on with their shared abode.

Tenancy-In-Common

Under the arrangement of tenancy-in-common, each proprietor maintains an independent and unique stake in the property. This means that the joint owners must come to an agreement on the division of shares among themselves.

Unlike joint tenancy, the principle of survivorship does not apply to tenancy-in-common. Therefore, the share of a co-owner will be bequeathed to their designated beneficiaries as stated in their Will (if one exists). In the absence of a Will, the Intestate Succession Act will dictate the distribution of the co-owner’s share of the property.

Let’s say, for instance, that three friends, Sally, Donna, and Lisa, decided to pool their resources and invest in a luxurious condominium unit. As astute investors, they opted for tenancy-in-common as their form of ownership. Additionally, they made a conscious decision to assign shares based on their respective investments. Consequently, Sally holds a majority stake of 60%, Donna holds 30%, and Lisa holds the remaining 10%. In the event of Sally’s demise, her beneficiaries will inherit her 60% stake in the unit, while Donna and Lisa will continue to possess their shares of 30% and 10%, respectively, alongside Sally’s heirs. Similarly, the same course of action will apply upon the passing of either Donna or Lisa.

Which To Choose

With every choice comes a set of advantages and disadvantages, making it crucial for co-owners to carefully consider their options before coming to a decision. While switching from one method of holding to another is a possibility, it requires both time and resources.

For couples seeking a place to call home for their growing family, joint tenancy proves to be a favorable option. In fact, it is the go-to for newlyweds looking to purchase a residential property. This form of holding ensures that the family home will automatically be passed on to the surviving spouse.

On the other hand, a parent who wishes to secure an early inheritance for their child may choose to hold the property jointly with their offspring. This arrangement allows for a seamless transition of ownership upon the parent’s passing.

For friends venturing into property investment together, tenancy-in-common offers a more suitable solution, especially if each person contributes a different amount towards the purchase. This type of holding allows for distinct shares to be carved out for each co-owner, which can then be passed on to their respective beneficiaries.

Even singles can find a suitable option for co-owning a property, such as under the Joint Singles Scheme (JSS) for HDB flats. This arrangement is open to two or more single Singaporeans aged 35 and above, allowing them to purchase a resale HDB flat together. While currently limited to non-mature estates, the JSS will expand its scope to include any location in the second half of this year.

Should You Buy, Sell or Wait?

If you’re reading this, you must be trying to figure out the best course of action right now: is it the right time to buy or sell?

It’s difficult to give an exact answer since everyone’s situation is unique and what works for one person may not necessarily work for you.

I can bring you a wealth of on-the-ground experience and a data-driven approach to provide clarity and direction. From beginners to experienced investors, our top-down, objective approach will help you on your real estate journey.

I can help you by:

Offering Strategic Real Estate Advice – I can help create a comprehensive plan to guide you through your property journey.
Connecting Your Home with the Perfect Buyers – Through stunning visuals, an effective communication strategy, and an in-depth knowledge of the market, we’ll ensure your home is presented in the best possible way to fulfill your goals.

You May Also Like …

All Opinion Reports

NUS Real Estate Survey Reveals Growing Optimism Among Industry Leaders

Jayson Ang – January 17, 2025 –

TLDR A recent survey by the National University of Singapore (NUS) highlights increasing optimism among real estate industry leaders. The...

Mandarin Top 5

Top 5 Street Food Markets in Singapore

Jayson Ang – September 8, 2024 –

Singapore, a melting pot of diverse cultures, offers an incredible array of street food that tantalizes the taste buds of...

Mandarin Top 5

5 Dangerous Ideas Singapore Property Investors Have

Jayson Ang – September 2, 2024 –

Singapore's property market has always been a hot topic among investors, both local and international. With its strong economy, stable...

All Buying Tips

What Is Cash Over Valuation in HDB (COV)

Jayson Ang – November 8, 2023 –

TLDR Cash Over Valuation (COV) in HDB resale flats occurs when the purchase price exceeds HDB's valuation. COV cannot be...

All Buying Tips Opinion

The Sneaky Role of Property Appraisals in Shaping Singapore’s Home Prices

Jayson Ang – January 20, 2024 –

TLDR When it comes to the real estate market in Singapore, understanding property valuations and the impact on mortgage loans...

Mandarin Top 5

Top 5 : Exploring the Streets of Singapore – A Journey Beyond Just Shopping!

Jayson Ang – February 11, 2025 –

Singapore, a vibrant city-state known for its diverse culture and rich history, offers a plethora of unique experiences that go...

Mandarin Top 5

Top 5 Reasons : Why Ultra-Rich Families Racing To Park Wealth In Singapore

Jayson Ang – October 9, 2024 –

Singapore, a small island nation in Southeast Asia, has become a magnet for the world's ultra-rich families seeking to park...

All Buying Tips Opinion

Can You Make the Leap to a Condo Upgrade in 2024?

Jayson Ang – June 12, 2024 –

As the Chinese New Year festivities wind down, folks are once again on the prowl for new homes, and understandably,...

All Buying Tips

5 Reasons Why Your House Isn’t Selling – and How to Overcome Them!

Jayson Ang – June 24, 2023 –

TLDR When trying to sell your home, ensure it is competitively priced based on its unique features and the current...

Mandarin Top 5

Top 5 Surprising Benefits of Investing in Singapore Real Estate for Foreigners

Jayson Ang – October 27, 2024 –

Singapore, a thriving city-state in Southeast Asia, has become an attractive destination for foreign investors looking to diversify their investment...

All Buying Tips

Sell High Buy High : Will This Still Make You a Profit?

Jayson Ang – December 7, 2022 –

TL;DR Summary: Timing of Property Sale: Selling high and buying high may seem counterintuitive, but understanding market dynamics can...

All Opinion

How Budget 2024 Impacts Singapore Homeowners: Exciting Property Tax Updates and ABSD Benefits

Jayson Ang – June 16, 2024 –

TLDR The 2024 Budget introduces changes to property tax bands, aiming to ensure fair taxation based on Annual Value (AV)...

All Buying Tips Opinion

Here Are 6 Interesting Facts About The Minimum Occupation Period (MOP) That Not Many People Know About In Singapore

Jayson Ang – May 1, 2024 –

TLDR When it comes to understanding the Minimum Occupation Period (MOP) set by the Housing Development Board (HDB) in Singapore,...

Mandarin Top 5

Top 5 : Dangerous Ideas Singapore Property Investors Have

Jayson Ang – February 19, 2025 –

Investing in property, particularly in a thriving market like Singapore, can be an enticing prospect. However, it's not without its...

All Opinion

Surprising Prediction: Will Singapore Property Prices Drop in 2024?

Jayson Ang – June 8, 2024 –

TLDR When considering the current real estate market in Singapore, it's crucial to understand the impact of factors such as...

All Blog Posts Opinion

Are We Truly Headed For A Slowdown? How Will This Affect Property Prices?

Jayson Ang – December 9, 2022 –

TLDR The pandemic-induced recession has surprisingly boosted property prices in Singapore, defying conventional economic trends. Factors like cost-push inflation, limited...