The splitting of joint ownership

By Franco Odhiambo

Many potential beneficiaries of property have lost their inheritance simply because the deceased benefactors co-owned the property with others as joint proprietors.

Due to limited financial resources, lack of collateral and difficulty in accessing mortgage facilities particularly for the low-income group, many investors have pulled their resources together and have been able to invest in properties such as land, buildings or commercial business.

Investments

A building in Nairobi. Investors should understand the dynamics of joint ownership before signing agreements. [PHOTO: jeniffer wachie/ STANDARD]

Whereas most of those investments have been made through small registered limited companies and co-operative societies, others have been made through partnerships where the partnership deed clearly spells out each party’s contribution and potential shares.

But majority of other investors who might be agemates, former classmates, workmates or relatives basing their association in trust have invested in properties as joint owners without indicating their shares unaware of the legal implication involved to their potential beneficiaries once they die.

Court cases

Many wrangles exist today among would-be inheritors of properties more so particularly the descendants of the first generation African businessmen majority of whom were illiterate or semi-literate.

And due to the then government policy of Africanisation, took over businesses and buildings belonging to some departing Asians, and large scale commercial farms in the former white highlands and co-owned them as joint proprietors.

Despite filling court cases and placing cautions or caveats to protect their interests, many would-be beneficiaries have lost their inheritance as the law is quite clear on succession of joint ownership.

Joint ownership

Joint ownership is where co-owners are considered as one composite person.

As opposed to proprietorship where each co-owners undivided shares is indicated and therefore real and can be succeeded by a heir apparent in joint ownership, if one co-owners dies, the property automatically reverts to the surviving co-owner(s) in the operation of right of survivorship and this continues until the last surviving co-owner who becomes the sole owner and can dispose the of property or be succeeded by his/ her descendants.

Another possible danger in Joint ownership is the possibility of one greedy co-owner who maliciously eliminates the other co-owner(s) in order to benefit from the operation of right of survivorship and becomes the sole proprietor.

If proved beyond reasonable doubt that such crimes have been committed then the operation of right of survivorship cannot apply due to the rule that no one may benefit from his /her crime.

Due to many pitfalls associated with joint ownership, proprietors in such co-ownership are advised to subdivide the property and transfer each part to every co-owner thus becoming sole proprietor.

In situations where the property is too small for physical subdivision, the solution is to sell the property and share the proceeds.

But there are situation where subdivisions or selling is not fully beneficial to the co-owners and the most appropriate way to safeguard their interests and those of their successors is to severe the joint ownership.

Severance

Severance is the act of converting joint –ownership or joint proprietorship into proprietor in common where by the undivided share or percentage held by each co-owner is indicated both in the land register and title deed.

This is done by visiting the respective land registry by all co-owners and applying for severance by filling the prescribed forms known as severance of joint proprietorship as stipulated in the Registered Land Act Cap 300.

Once severance is registered, the co-owners’ interest and those of their descendants are safeguarded. They also agree among themselves who is to keep the title deed or leave it in the custody of the land registrar for safe-keeping.

In case the interest of co-owners in proprietorship in common comes to an end, they can apply for partition of the property.

The writer is a Survey and Mapping Professional