•These Are All The Things You Need To Know
Under the Nigerian jurisprudence, concurrent ownership of land or property is recognised. Such joint ownership of property may occur where two or more parties pool their resources together to acquire land or property, received as a gift donation or as joint beneficiaries under a will.
This discourse will be central to the context of joint ownership of property involving married couples. The reason being that joint acquisition of property is gradually becoming a common feature in modern marriages. The advancement of girl child education, commerce, enlightenment and modernisation has elevated the status of women in the society. Women are more financially empowered and have also become major contributors to the family finances.
Under the law, Concurrent ownership which is also referred to as co-ownership is structured into two variations which could be either joint tenancy or a tenancy in common. It is imperative that prospective joint owners are well informed of nature and the legal implications of both versions of joint ownership before embarking on the terrain. This is to avoid any unintended results which may be highly consequential for either of the parties. A major difference inherent in both types of co-ownership is the principle of the right of survivorship and individualism.
A property held by two or more people as joint tenants consequentially means that the property is owned in equal shares with undivided rights amongst the co-owners. Most significantly, the right of survivorship will apply to the property. The principle of the right of survivorship means that in the event of the death of a co-owner, the survivor co-owner will inherit the property by operation of law. In simple terms, where a married couple holds a property as joint tenants, in the event of the death of either of them, the ownership stake of the deceased spouse will be transferred to the surviving spouse exclusively. This exclusion extends to all third parties inclusive of the children of the marriage. The share of the deceased co-owner in the property cannot be passed to his heirs under no circumstance even if he bequeaths such property in his will. However, the surviving spouse will be able to pass the property to his heirs because the property then becomes his sole property. However, a joint tenancy will only be inferred by the law where the co-owners share what is known as the 4 unities which are:
•The property must be purchased at the same time
•The title of the co-owners must be the same
•The co-owners must own equal share in the property regardless of the amount paid by each co-owner towards the acquisition of the property
•The co-owners must have the same rights and undivided share in the entirety of the property.
Joint tenancy is of great benefit to married couples particularly as it protects the interests of the surviving spouse against 3rd parties who may want to interfere with the properties of a deceased person. The right of Survivorship also avoids probate which means that the surviving spouse inherits the property immediately upon the death of the deceased spouse with no recourse to the will or letters of administration. It is a notorious fact that discriminatory and prejudiced customary succession rights pertaining to women continue to prevail in most cultures in Nigeria. Although individuals can ensure that the interest of their spouses is protected in their wills, it is undeniable that wills can be contested which may give rise to long protracted legal battles. Also, the administration of estate law which is the law applicable to the estates of individuals who die without a will gives priority to spouses in the administration of the estate of deceased spouses. The obstacles under this law is that it is only applicable to a marriage conducted under the marriage act and the process may be cumbersome and expensive. Consequently, the most secured means of protecting spouses is the creation of joint tenancy.
In a situation one of the unities enumerated above is deficient; such a joint ownership will automatically be referred to as a tenancy in common. The principle of the right of survivorship is inapplicable to properties held as tenants in common. The interests of tenants in common are distinct, severable and transferable. With this type of joint ownership, each individual “tenant in common” owns a specific percentage of the property and can withdraw, mortgage, or sell his or her own separate piece of the property. When a tenant in common dies, his or her share of the property passes to his or her own beneficiaries and not to the surviving tenants in common.
There is a presumption in favour of joint tenancy under the Nigerian law which is that the law favours joint ownership of a property in the absence of clear words of severance in the deed. Thus, it is vital that where a couple decide to purchase a property jointly, they must be well informed of the kind of ownership they want to create. A solicitor engaged for this purpose must take utmost care and skill to ensure that the clear wording of the instrument of transfer clearly conveys the intentions of the co-owners. For instance, if the intention of the couple is to hold the property as joint tenants, the content of the deed may be silent on the issue of severance or may include the explicit words of “ A conveyance to Mr A and Mrs B as joint tenants”. Conversely, if the intention of the couple is to hold their interest in the property as tenants in common, the words of severance must be explicitly included. For instance, it must include “To Mr A and Mrs A in equal shares or To Mr A and Mrs A to hold as tenants in common”.
A joint tenancy can be converted to a Tenancy in common by the co-owners obtaining a separate share during their lifetime if they so wish. This can occur where one of the joint owners sells his share in the property to a third party. The co-owner who intends to sell does not need the concurrence of the other co-owner to sell his share for a valid sale to occur. The implication of the sale is that the new co-owner and other co-owners will become tenants in common by operation of law. It is significant to state that a co-owner can only sell his own share of the property to a third party and not the entire property. Any attempt to sell the whole interest in the land to a third party without the concurrence of the other party must fail. The title of the purchaser will be null and void and of no effect.
Another alternative available to a co-owner who is desirous of severing his share in a Joint tenancy is to persuade the other joint tenant for a voluntary partition of the property. If the other joint tenant concurs, a deed of the partition must be executed to evidence the partition. If the other co-owner declines his consent, the co-owner who intends to partition will have to apply to the court for an order of a compulsory partition. A partition cannot be obtained without the concurrence of the other co-owners. A partition obtained solely by one of the co-owners is void and of no effect. However, where the court considers that a partition may not be viable in the circumstance, the judge may make an order for a sale instead. Once the property is partitioned, the principle of the right of survivorship will no longer apply to the property.
Asides the issue of couples pooling resources jointly to acquire a property and automatically become co-owners, other issues which may arise between couples in the event of a dispute or breakdown of the marriage is the ownership of property conveyed in the name of just one of the couple. It is common for couples to lay claims to such properties acquired during the course of the marriage as joint properties regardless of the fact that deed reflects only one of the names of the couple. The law has well-developed principles in this area which may not necessarily be fair to either of the parties.
Parties to a marriage are entitled to own individual property during the course of the marriage without recourse to the other provided it is acquired from their personal resources. Parties are also entitled to keep or sell the property in the event of the breakdown of the marriage. However, where the disputes is where there is an allegation of the advancement of money between the parties.
Under the law, where there is clear evidence that the husband advanced the purchase price to the wife or bought the property in the sole name of the wife, the principle of presumption of advancement in favour of the wife will apply. The law presumes that the husband advanced the property to the wife as a gift. However, the presumption is not conclusive and may be rebutted by strong compelling evidence. Conversely, there is no presumption of advancement by a wife towards her husband. Where a wife advances the purchase price towards the purchase of property in the sole name of the husband, it assumed that the husband holds such property under the principle of resulting trust for her and was not intended to be a gift.
Another dispute which often arises between couples is the claim of joint ownership even where only one of the couple advanced the purchase price for the property. The principle of the law is clear in this regard. The only way such a spouse can lay claim as a joint owner of the property is to show compelling evidence of direct and substantial contribution towards the purchase of the property. The emphasis is the proof of direct and substantial contributions of the claimant. An indirect or insignificant contribution may not be considered weighty enough to infer joint ownership. An example of a direct contribution is where the spouse makes a substantial financial contribution to the other spouse with the explicit explanation of the purpose of the financial donation. It is not uncommon for couples to have an agreement that while one of the couple saves or provides the money for the acquisition of a property, the other spouse will make provisions for the upkeep of the family which may include payment of school fees of the children or house rent. It is unfortunate that the law does not recognise such an oral agreement as a direct financial contribution towards the purchase of the property. In that circumstance, it is advised that couples should ensure that such an agreement is written to give it the full backing of the law. Spouses who make direct financial contribution must also keep accurate records of such transactions as evidence in a case of a dispute.
A claim of indirect contributions such as decoration or the maintenance of the home may not be weighty enough to ground a claim as a joint owner. The law considers such activities as mere domestic obligations critical to the use and enjoyment of the house. The quality of the contribution is not the only consideration taken into account by the law, the quantity is also critical. A direct contribution must be substantial in nature. For instance, a contribution of one million naira towards the purchase of a house which cost forty million naira may not be considered substantial but a contribution of ten million naira may be considered substantial.
In such circumstance, the court has wide discretions where a claim of joint ownership is substantiated. The court may order the spouse who is the sole owner to pay the contributing spouse the sum of money proportionate to her contribution taking into cognisance the increased value of the capital asset. A contribution of ten million naira towards a property in Ikoyi ten years ago will not be the same ten million naira now. The increase in the value of the property must be considered. Where the contribution is so significant, the court can make an order for the partitioning of the property or if a partition is not viable in the circumstance, the judge may order for a sale and the proceeds shared between the owners. Where the court is convinced that there is a compelling reason which will make a sale or a partition not appropriate in the circumstance, the court may make an order that the party with the majority interest to pay off the other spouse and keep the property.
Where a spouse acquires a property solely without any contribution from the other spouse but chooses to insert the name of such spouse notwithstanding in the ownership of the property; such non-contributory spouse will acquire an equal share in the property regardless of clear evidence that the spouse contributed nothing towards the purchase of the property.
Written by Olamide Onifade,
Senior Partner, Olamide Onifade & Associates
2nd Floor, 149, Ogudu Road, Ogudu, Lagos