LAWS OF EVE - Think carefully before joint property ownership

The decision to purchase real property (that is, land and buildings) requires careful planning in and of itself. Very often, the intended purchaser has to face the fact that he or she does not have enough money saved to pay the deposit and closing costs; but even more often, that would-be purchaser finds that a single income is inadequate to qualify for the mortgage required to complete the purchase.

It is usually the latter issue that forces one to consider getting a partner to assist in the purchase, and this must be approached with caution because the autonomy which exists when one is a sole proprietor will be lost when there is a co-owner, and the future of the relationship with a co-owner is unpredictable.

Two of the issues which must be considered before embarking on such a purchase are:

1. whether the co-owners should be equal owners, or to define the interest each will take in the property, based on the level of investment, at the time of purchaser. This may help to stave off future court action regarding the share each co-owner has in the property.

2. whether the co-owners hold the property as joint tenants or tenants in common. This is very important, because it helps to focus on whether each co-owner wants the other to inherit the entire property on his or her death.

However, it should be noted that the nature of the property holding can change with or without the consent of both or all co-owners. In particular, the co-owners may mutually agree to sever a joint tenancy, but by simply signing a declaration of his intention to do so or by selling his share of the property to a third party, one joint tenant may unilaterally cause the joint ownership to be severed (Gamble v Hankle).

Moreover, one co-owner may be deemed to have abandoned his interest in property, if he does not exercise rights of ownership for a period of 12 years or more (Wills v Wills).

Partition order

In addition, one co-owner of property held as tenants in common may obtain a partition order, and force the sale of the property without the other co-owner(s) consent.

While it is accepted that many joint ownerships survive the test of time, relationships are unpredictable and problems regarding the ownership of joint property usually manifest themselves when the relationship (whether a friendship, marriage or business partnership) falls apart. It is at that time that each co-owner usually wants to realise his interest in the property in order to achieve a clean break from the relationship. This often leads to court actions and unwarranted expenses.

Perhaps much of the distress which brings joint ownership to an end could be avoided if the would-be purchasers are properly advised as to the legal rights of obligations which they bring to life.

Sherry-Ann McGregor is a partner and mediator in the law firm of Nunes, Scholefield, DeLeon & Co. Send feedback and comments to lawsofeve@yahoo.com or Lifestyle@gleanerjm.com.