Joint Purchase On Properties – The Challenges
Joint ownership of properties, as a result of joint purchase between two or more individuals is very common in this day and age.
The purchase of property is jointly done among spouses, family members, business associates and friends. The reasons for the joint purchase of properties varies depending on circumstances. Some agree on this to obtain a higher loan margin while some do it with the intention of wanting to invest together.
However, joint ownership of properties may limit your rights or options, not only while you own the property, but also when you intend to do a transfer of ownership. Let’s examine the nature and challenges involved in joint property purchases.
Most disputes in this area occur between unmarried cohabitees, but such disputes can also arise between family members, friends or business partners who purchase properties together.
What is important here is the understanding of joint purchasers. Before entering into any joint purchasing, the parties involved should always have a common understanding about the property and the agreement that binds them together.
They will need to look into the tenure of agreement, whether it for short-term or long-term yield, roles or contributions by the relevant joint-purchasers in areas related to the payment of quit rent, assessment, mortgage loans and more.
These issues should always be ironed out or addressed prior to the joint-purchase of any property. This may avoid disputes in cases of death, breakdown of a relationship or when it comes to the sale of the said property.
Section 342(1) of the National Land Code 1965 provides that the shares of joint-purchasers are deemed equal unless different proportions are specified in the memorial of registration.
Hence, unless an agreement has been drawn up to reflect the relevant share proportions held by different joint-purchasers, all joint purchasers are deemed to own an equal share to a property. As such, in an event when share proportions are unequal, joint-purchasers should always reflect the same in an agreement to avoid unnecessary misunderstandings.
Another issue to consider is in the event of the death of any of the joint-purchasers. The share which the deceased holds shall be distributed in accordance with the laws of intestacy.
In the event the surviving joint-purchaser decides to sell the property, a court order would need to be obtained by the relevant beneficiaries prior to the sale of such property.
This would entail some costs and time, and not forgetting convincing the relevant beneficiaries before a decision is made.
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