By Vivianne Gichuhi and Faith Sila, Riara L.l.b 2017 Candidates,
What
is tenancy?
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.[1]
What
is tenancy in common?
A
tenancy 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.[2]
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.[3]
Tenants
in common do not possess a right of survivorship and on their death their
interest passes according to the terms of their will.[4]
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.[5]
For
a tenancy in common to be in existence the following must be observable or in
other words it must comprise the following. First an interest in property owned
concurrently by two or more persons under an agreement of tenancy in common.
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) and
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. [6]
All decisions to develop, mortgage, sell or use the property may only be made
collectively by all co owners.
Tenancy
in common has various advantages and these are, firstly that 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. Secondly the co-owners are allowed to divide the
property in any agreeable manner which is not the case in a joint tenancy this
means that for example in the case of three co owners person X can own 50%, Y
30% and Z 20%.
Tenancy
in common has the advantage of the fact that 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 (X 50%, Y 30%, and Z 20%) but still have equal enjoyment to the
property and in decision making.
For
everything that has advantages disadvantages may inevitably also accompany
those advantages. 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. An example
would be persons Y and Z who own 30% and 20% respectively of the property in
the tenancy in common and sell their shares to person X who owns 50% of 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.[7]
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.[8] 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.[9]
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.
[3] http://www.naugrim.it/wordpress/wp-content/uploads/2013/01/Kenya-LandAct__No6of2012.pdf
<accessed 31/07/2014>
[4] http://www.lpi.nsw.gov.au/about_lpi/faqs/land_title/whats_tenancy_mean
<accessed 26/07/2014>
[8] http://www.kenyalaw.org:8181/exist/kenyalex/actviewbyid.xql?id=KE/LEG/EN/AR/L/CHAPTER%20300#part_IX
<accessed 31/07/2014>
[9] http://www.kenyalaw.org:8181/exist/kenyalex/actviewbyid.xql?id=KE/LEG/EN/AR/L/CHAPTER%20300#part_IX
<accessed 31/07/2014>
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