Tenancy in Common

Where two or more persons take an estate or interest in land by means of an application, transfer, mortgage, charge or lease that dealing must state whether the persons are to hold as joint tenants or tenants in common. If they hold as tenants in common the share of each person must also be stated.

A tenancy in common is one held by two or more people, in equal or unequal shares, each person having an equal right of possession over the entire property, but no right of survivorship.

According to the Land Act of Kenya 2012 tenancy in common is a form of concurrent ownership of land in which two or more persons possess the land simultaneously where each person holds an individual, undivided interest in the property and each party has the right to alienate, or transfer their interest.

Tenants in common do not possess a right of survivorship and on their death their interest passes according to the terms of their will.

Tenant in common holds an undivided share in the property and has unity of possession meaning that; each tenant has a right to possession of the property as a whole but none of them has a right to exclusive possession of any part of the property. A tenant in common may do whatever it is that they want to with their share of the property and this will not affect the tenancy of the other co-tenants in their shares.

In tenancy in common each tenant has a right to possess and use the entire property. Either party may sell or transfer his or her share of the property to any person, for any reason. If one of the tenants does sell or transfer his or her share, then the buyer takes the seller’s place and becomes a tenant-in-common with the party who did not sell his or her share.

For a tenancy in common to be in existence the following must be observable or in other words it must comprise the following.

  1. First an interest in property owned concurrently by two or more persons under an agreement of tenancy in common.
  2. Each or two or more of the tenants in common must have an undivided interest in the whole property for the duration of the tenancy (right of possession).
  3. There has to be no right of survivorship incident to a tenancy in common, but a remainder may be created to vest ownership in the survivor of several persons who own as tenants in common other preceding interests in the same property. All decisions to develop, mortgage, sell or use the property may only be made collectively by all co owners.

 

Advantages of Tenancy in common

  • it allows an unlimited number of people to co-own a property this therefore means that in case of expensive property they can share the purchase price and can benefit from the use of the property.
  • The co-owners are allowed to divide the property in any agreeable manner which is not the case in a joint tenancy.
  • Each owner in a tenancy in common has the right to designate an heir in her will. If an owner passes away, her share of the property passes to the person listed in the will, which allows you to provide a property inheritance, increasing your heir’s assets when you pass away. If the property produces income, the heir will receive your portion of the income. This advantage extends to persons who were married and had children in the previous marriage they can inherit your share whilst still allowing your current spouse or partner to live there for life.

The fact that one of the features of a tenancy in common is undivided interests this can be both an advantage and disadvantage. Undivided interests refer to the interest in property owned by tenants whereby each tenant has an equal right to enjoy the entire property. This is because tenants to the property may have contributed different portions towards acquiring the ownership of the property but still have equal enjoyment to the property and in decision making.

One of the disadvantages of tenancy in common is the potential for one owner’s nonpayment of the mortgage, upkeep expenses or repair costs to affect the other owners. If one owner fails to make a payment, the other owners must cover the expenses, although they may do so in the form of a loan to the nonpaying owner. If the nonpayment cannot be resolved, the remaining owners typically must resort to complex legal strategies, such as foreclosure or eviction.

The other disadvantage of tenancy in common lies on its dissolution. Dissolution of a tenancy in common can be a complex matter. If all owners agree to sell the property, they divide the proceeds according to ownership. However, if the owners do not agree to sell, one owner can typically obtain a partition action, which is a court order forcing the sale of the property. This can be a disadvantage if you want to keep the property but another owner wants to sell.

There are several ways in which a tenancy in common can come to an end. The first and most obvious way is when the property is sold (with all the shares) to another person. This means that when all the co-owners have met an agreed to sell their share in the tenancy in common to another person. A tenancy in common is not dissolved by death of a co-owner of the tenancy in common.

The tenancy in common may also come to an end when one owner acquires all the share of the property. This simply means that the other co-owners sell their shares or interests in the property to one person in the tenancy in common.

Dissolution of a tenancy in common can also take place when the co-owners make an agreement and change the form of tenancy. Having earlier stated that concurrent ownership may take two forms, a joint tenancy and a tenancy in common, the agreement that would lead to dissolution of the tenancy in common by way of change of the form of tenancy, would then be an agreement to become a beneficial joint tenancy.

Kenyan Law

The Land Registration Act in S 91 (2) says that; if two or more persons own land together under a right specified by this section, they may be either joint tenants or tenants in common.

The Land Registration Act in S 91 (8) states: On and after the effective date, except with leave of a court, the only joint tenancy that shall be capable of being created shall be between spouses, and any joint tenancy other than that between spouses that is purported to be created without the leave of a court shall take effect as a tenancy in common. This is to mean that on and after registration date the only tenancy that can be created between spouses is the tenancy in common if there is no leave of the court. If the spouse has leave of the court then it can be taken as joint tenancy.

The Land Registration Act in S 92 (2) states: If land is held in the name of one spouse only but the other spouse or spouses contribute by their labour or other means to the productivity, upkeep and improvement of the land, that spouse or those spouses shall be deemed by virtue of that labour to have acquired an interest in that land in the nature of an ownership in common of that land with the spouse in whose name the certificate of ownership or customary certificate of ownership has been registered and the rights gained by contribution of the spouse or spouses shall be recognized in all cases as if they were registered. This is to mean that if a spouse hold land and the other spouse labors on it to develop it then the other spouse is considered under this section as a co-tenant with the other spouse even though the land was registered under the name of only one of the spouses.

The Land Registration Act in S 94 (1) states that: Any of the tenants in common may, with the consent of all the tenants in common, make an application, in the prescribed form, to the Registrar for the partition of land occupied in common and subject to the provisions of this Act and of any other written law applying to or requiring consent to a sub-division of land and of any covenants or conditions in a certificate of a land, the Registrar shall effect the partition of the land in accordance with the agreement of the tenants in common.

This is in the event that the tenants in common want to partition their property. Any of the tenants can make an application to the Registrar for the partition of course with consent of the other tenants in common with him or her.

Posted by: cmpd-admin

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