- Prevalence of Tenancy laws and their Implications in Singapore
- Joint Tenancy Case laws and Litigations in Singapore
- A Proposal for Reforms regarding the Severance of Joint Tenancy in Singapore
- The Four Unities Rule
- Severance of Joint Tenancies
- The difficulty of severance in secret
- Notice of severance and registration of serving instruments
- Effective time of severance:
- Notice of severance and joint beneficial interests:
- Non-severable co-ownership with survivorship:
Are reforms needed in the area of law regarding the severance of a joint tenancy Singapore? If so, articulate the specific proposal for reform.
Note: Singapore's law on severance is similar to UK's.
In the area of estate law, joint tenancy refers to a special type of ownership of a same property by two or more individuals. In such a situation they equally share the ownership of the property and have the equal and undivided right to keep or dispose of the property. The joint tenancy provides a right of survivorship on account of which if in case any of the joint tenants dies, the remaining share of that tenant is allowed to transfer to the survivors (Marti, 1957).
Since a lot of citizens in Singapore co-own their lands or houses, a few of them, however, are aware that there could be more possible ways in which the legal papers of co-ownership can be drawn up. As a matter of excitement of being co-owners, many of them take things for granted and end up undermining their ownership status. Like many other things, the status of ownership goes to the backburner in their lives (Crown, 1998).
When it comes to joint tenancy, the co-owners are wholly entitled to the whole of the property. The statement seems to be not making a complete sense. Nevertheless, it means, for example, a husband owns 100% and his wife also owns 100% of the property. It also goes on to suggest that, being the wholly entitled of ownership of the property, the owners also possess the right of survivorship. Also, the situation can get complicated if the co-owners contribute unequally during the purchase of the property or land or house. So, the question that arises at this point in time that in the event of dispute over ownership share, should the party that contributed more, claim more?
The following report tries to analyze various aspects of joint tenancy laws and the severance of joint tenancy in Singapore. This project draws a comparative analysis between joint tenancy and tenancy in common and lay out their distinction in their application in relation to the Transfer of Property Act (UK), 1882, since, Singapore law on severance is similar to that of UK's. We will also attempt to put across some of the necessary reforms in the joint tenancy laws, on account of which the different parties will stand to be benefitting from them.
Prevalence of Tenancy laws and their Implications in Singapore
In Singapore, there are primarily two forms of co-ownership that is being recognized in law. These are Joint Tenancy and Tenancy in Common. Though they would seem similar in certain respect, but are inherently different and the nature of ownership and the rights as well as subsequent would significantly differ according to the nature of co-ownership ("One for All and All for One - Responsibilities of Directors", n.d.).
Under the joint tenancy law, two or more owners have rights with regards to the property as if they were a single owner. So, if one of the parties having the joint tenancy dies his or her share automatically passes on equally to the remaining parties. However, a fundamental principle that is a key requirement for the joint tenancy is the unity of the ownership. So, with this provision, the following four types of unities will have to be observed:
The first one is unity of time, according to which, the ownership is to be acquired by each and every tenant at the same time. Secondly, unit of title, on account of which if all the concerned parties elect to adopt a joint tenancy then all of them will have to be named as joint tenants in the same title deed. Thirdly, unity of interest, which simply refers to the fact that all of the tenants own equal shares in the property. For example, if five people are under joint tenancy, then each of them possess 20% share in the property. Unity of possession, with which all the tenants have equal rights to access and possession.
Having described the four unities being observed in a joint tenancy, there are equally four ways by which a joint tenancy can be ceased:
In the event of any one of the tenants opts to sell his or her share in the property to any other party, then the situation comes under termination by alienation. The second condition of cease of joint tenancy is when there is a mutual agreement to partition off the joint tenancy. Thirdly, when a court gives an order to sell partition off the joint tenancy. Lastly, with the help of a unilateral deed of declaration made by a joint tenant who needed to severe the joint tenancy ("Singapore - Joint Tenancy - An Independent Doctrine Of Ownership Or Merely A Tenancy In Common In-Waiting? | Conventus Law", 2016).
While most of the co-owners of Singapore prefer joint tenancy, it is not necessarily a better option at all. This is because of the fact that the other type of co-ownership, that is, tenancy-in-common lays down the specific terms of co-ownerships that are spelt out prior to the deed is signed.
As per the law of tenancy in common, the owners of the property possess it by holding shares. These shares can be of equal or unequal percentage. Meanwhile, every tenant in common can opt to sell off or mortgage his or her shares without necessarily having a consultation with the others. In such a scenario, the tenancy is not destroyed, rather the new owner becomes a tenant-in-common.
In practice, tenancies are said to have arose when three circumstance are met. The most common is the one, which is prescribed under the law. A striking example of this tenancy is to consider a condominium where are all of the subsidiary proprietors (SPs) are regarded as tenants-in-common when the common property of a sub-divided building is being talked about. Another scenario under which a tenancy-in-common is being created is the situation when parties contribute money in unequal amounts or shares in order to purchase the property. As a matter of fact, if a deed doesn’t specify as to which form of ownership the parties are taking title, then it can be agreed that it is tenancy-in-common ("Joint ownership in Singapore and unequal contributions to purchase price | SingaporeLegalAdvice.com", 2012).
A tenancy-in-common can be ceased in certain ways. The first one is when the parties choose to do so voluntarily. The second one is when one or more than one tenants move to the court and ask to cease the ownership and divide the property. The third situation is when the laws have to step in, such as the situation when the landlords become bankrupt and the property is foreclosed. Therefore, the advantage of tenants-in-common, as being pointed out earlier, is that the co-owners can specify their own terms prior to their jointly buying of a property.
Now, if an individual chooses to go for a tenancy-in-common, he will require to inform his lawyers well in advance so that he could draw up a necessary draft. Even among the married couples, tenancy-in-common provides in the event of death for one partner to dispose his or her portion as per his or her will. This is contrary to the joint tenancies where the rule of ownerships steps in, ensuring that the surviving party automatically inherits the property.
For the purpose of Conversion of Manner of Holding, a law came into force in March 1994, according to which, the tenants-in-common having equal shares as well as joint tenants were allowed to convert their manner of holding into a joint tenancy or tenancy-in-common in equal shares in respective measures by making a declaration in the form laid down under the Land Titles Act (Cap. 157). This declaration by the tenants can be registered at the Singapore Land Registry.
Now, in the situation of disputes, the highest court of Singapore has implemented a stage test. It will be only for the Court to determine if the presumption of resulting trust arose. So, the party that provided more contribution is needed to give evidence in the form of transaction records or CPF payments, proving that the party actually paid more. If the condition is met, the parties would be presumed to hold the property as per their ration of their contribution. However, this presumption can be challenged either by contrary evidence or by the presumption of advancement.
As far as contrary evidences are concerned, they include recorded agreements on the part of the co-owners in terms of their proof of joint tenancy in equal shares despite unequal contributions. The presumption of advancement is given consideration when the parties involved are in a familial relationship. If the existence of such relations is established, the law presumes that the parties have the intention of holding the property jointly and equally. Such type of relationships are primarily seen between husband and wife, or sometimes parent and child. So, a lot would depend upon the strength and the nature of the relationship (Tan, 2002).
The above situation shows that even if there are two names on a registry, it cannot be construed that the ownership would be interpreted absolutely inflexibly. But other factors would be taken into consideration as well. However, it is also important to note that the laws are liable to change and, therefore, the above arguments does not fully constitute a legal advice and may not always be relevant to any specific situation.
Joint Tenancy Case laws and Litigations in Singapore
In a case of Neo Boh Tan v Ng Kim Whatt 5  SGHC 31 at , the court observed that the Equity has an inclination towards tenancy-in-common in given circumstances because of the inherent unfairness regarding the right of survivorship, which is obtained in the situation of a joint tenancy. For an instant, when A and B have made a contribution to the purchase price of the property in unequal amounts of shares or they have lent money on mortgage or for that matter are business partners but the conveyance does not include any word of severance, then in terms of law, there would be joint tenancy.
If in case, they are also joint tenants in equity and in the event of death of one of the joint tenants, the surviving tenant will succeed his or her share. Keeping the circumstances in view, this result will manifest in unfairness and equity will recognize that even if A and B are joint tenants at law, they are also tenants-in-common in equity and each and every one should be entitled to share proportionate to his contribution (Crown, 2003). The net result is that A and B are joint tenants in law, holding in trust for themselves as tenants in common in shares proportionate to their contributions.
The commonly known method of severance of Singapore law was by acting on one’s share of the property. If a tenant is involved in a deal regarding his share of the property, t implies that his intentions are no longer to be part of joint tenancy. It can be done in a variety of ways:
Firstly, under transfer of interest, an owner may severe a joint tenancy either by selling his share or gifting it to a third party.
Secondly, under the provisions of LTA, a mortgage on a registered property doesn’t entail a transfer of title anymore. It is said to be just a charge over the property. It is then to be seen whether the mortgage results into the severance of a joint tenancy because of the fact that the title is still with the owner of the property (Teo, 1996).
Thirdly, the position on whether a writ of the seizure and sale (WSS) that tantamount to something like severance of joint tenancy is ambiguous due to differing opinions on the part of Singapore Courts. Earlier, it was a well-known fact that the interest of a joint tenant could be subject to a WSS. However, in the case of Malayan Banking BHD v Focal Finance limited 3, it was established that interest of joint tenant cannot be subject to a WSS due to the fact that interest is not distinctly identifiable just like interest in tenancy-in-common.
Fourthly, as per the informal unilateral declaration by introducing Sec 53 (5) of the LTA, a joint tenant can severe by an instrument of declaration.
Fifthly, a joint tenancy can also be severed with an order of court.
In Chan Shwe Ching v Leong Lai Yee, the High Court observed that the requirement for an interest in land appeared for the first time in Malayan Banking without referring to any supporting authorities. After extensive consideration on the part of the Court, it was declared that “the severance of a joint tenancy in terms of undivided shares was not a prerequisite for a WSS to be issued against joint tenant’s shares in the land” (EduTV, I., & TVNews, I. Issue Annual Review 2015 (2015).).
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A Proposal for Reforms regarding the Severance of Joint Tenancy in Singapore
The present state of law regarding severance of joint tenancy, as far as my research and understanding is concerned, needs reforms in the following areas:
The Four Unities Rule
The survival of this rule even today seems to be just a legal traditionalism. It does not make much sense either for a practical or a policy purpose for the continued use of three of the four rules – Unity of title, Unity of interest and Unity of time. These are the ones that require co-owners’ respective shares must be obtained from the same legal transaction, be of equal size and coming into existence simultaneously (Orth, 2009). Only the Unity of possession now appears to have a valid purpose as the foundation of both joint tenancy and tenancy-in-common to be the concurrent right for the possession of the property in the case of two or more persons. Therefore, it is recommended that the Property law needed to be amended to provide that share in joint tenancy may – a) be of unequal size, b) created from different instruments, and c) created at different times.
Severance of Joint Tenancies
Severance after the reform of four unities rule
Severance with the help of mutual agreement as well as course of dealing as these two methods are independent of principled justification on the four unities rule.
To look into the dealings in the interest of an individual co-owner that results into the severance.
Transfer of an interest in co-ownership with survivorship to oneself as the transfer of such type should continue to be considered as a severance of the transferred interest.
Preserving the existing methods of severance as no change is required as to how severance can be accomplished after the implementation of the recommendation.
Effect of unilateral severance on the right of survivorship amongst the remaining co-owners. If the unities of time and title are abolished as per the recommendation, then this change might be viewed as a general severance finishing the right of survivorship completely.
Reconstruction of the right of survivorship following the unilateral severance. So, it will require a transfer by the co-owners to themselves as co-owners having the right.
The difficulty of severance in secret
The possibility for a secret severance can result into a significant hardship on a surviving joint tenant due to the fact that the future economic and physical security are generally dependent on the right of survivorship. The severance without the knowledge of other co-owners may not be helpful for them in the situation of reordering their own affairs appropriately. Therefore, it is recommended that the Land Title Act is needed to be amended for providing order to severe a co-ownership with that of survivorship unilaterally in property. So, the other person that obtains the interest under a serving transaction is needed to provide notification of the serving transaction even including mortgage to the other joint tenants.
Notice of severance and registration of serving instruments
It requires the following recommendations –
(a) Registrar should not register a transaction that severs a co-ownership with that of survivorship apart from the agreement among the co-owners without any proof regarding notice of severance being given to the co-owners
(b) If the registrar is satisfied that
If the notice of severance served to a person could not be located even after significant efforts.
It is not necessary to require proof about the notice of severance was given
Then, in this situation the registrar may –
Dispense with the requirement of notice
Require that the notice be given as per his directive
Effective time of severance:
The effectiveness of the severance should be on the following basis:
Among the serving co-owner and other co-owners in the event of the notice of severance is provided to the other co-owners; and
Contrary to the third parties, only in the event of registration of the serving instrument against the title when the property is being possessed in co-ownership with survivorship.
Final moment severance: the notice of the severance will be effective only if it is given before the death of the serving co-owner.
Notice of severance and joint beneficial interests:
The above recommendations could be applied to all the co-ownerships with survivorship in the property, which can include beneficial interests whenever a trustee holds the legal title.
In case the beneficial interests in the property are held in co-ownership with survivorship, it will not be necessary to serve the notice to the trustee in order to sever the survivorship among the beneficiaries.
Non-severable co-ownership with survivorship:
The Property Law is needed to be amended for making possible, with the agreement of the co-owners, to produce a co-ownership with the survivorship that is not severable by one co-owner’s interests with the others’ unless the consent of other co-owners.
The Land Title Act should provide for the registration of a notice of agreement.
The amendments in the laws being recommended in this report regarding Joint Tenancy Severance Laws in Singapore, would presumably go a long way in removing some of the outdated aspects of the joint tenancy and clarify other aspects around it. It will positively make this form of property ownership more relevant and adaptable to meet the modern requirements. They would especially reduce the differences between Joint Tenancy and Tenancy-in-Common, which have obscured the laws to common citizens.
Crown, B. C. (1998). Severance of a Joint Tenancy: Diaz v Diaz. Singapore Journal of Legal Studies, (July 1998), 166.
Crown, B. C. (2003). Developments in the Law of Co-ownership. Sing. J. Legal Stud., 116.
EduTV, I., & TVNews, I. Issue Annual Review 2015 (2015).
Joint ownership in Singapore and unequal contributions to purchase price | SingaporeLegalAdvice.com. (2012). SingaporeLegalAdvice.com. Retrieved 20 October 2016, from https://singaporelegaladvice.com/law-articles/joint-ownership-in-singapore-and-unequal-contributions-to-purchase-price/
Marti, G. (1957). Real Property: Joint Tenancy: Effect of Contract to Convey by Joint Tenants of Entire Interest in Property as a Severance of the Joint Tenancy. Michigan Law Review, 55(8), 1194. http://dx.doi.org/10.2307/1286371
One for All and All for One - Responsibilities of Directors. Lawgazette.com.sg. Retrieved 20 October 2016, from http://www.lawgazette.com.sg/2009-1/feature3.htm
Orth, J. V. (2009). Perils of Joint Tenancies, The. Real Prop. Tr. & Est. LJ,44, 427.
Singapore - Joint Tenancy - An Independent Doctrine Of Ownership Or Merely A Tenancy In Common In-Waiting? | Conventus Law. (2016). Conventuslaw.com. Retrieved 20 October 2016, from http://www.conventuslaw.com/report/singapore-joint-tenancy-an-independent-doctrine-of/
Tan, S. Y. (2002). Facets of Communal Living under the Land Titles (Strata) Act: Common Property, Rights of Subsidiary Proprietors of Individual Lots and the Role of the Management Corporation. Singapore Journal of Legal Studies, 416-430.
Teo, K. S. (1996). Law of Real Property and Conveyancing [Book Review].Singapore Journal of Legal Studies, (Dec 1996), 624.