What Can Co-Owners Do To Protect Interests In Home?

Source : The Sunday Times, Jan 13, 2008

Q I AM 49 and single. I live with my parents, who are in their 70s, and my youngest sister in a three-storey terrace house bought in 1997.

The four of us bought the house for $904,000 under a tenants-in-common agreement. We each chipped in about $250,000.

The initial 20 per cent down payment of about $180,000 was paid by my parents.

At the time of purchase, my sister was unable to finance her full share of $250,000, so my parents paid $100,000 for her. Her total contribution was only about $150,000.

My sister and I each took up a 25-year loan of $60,000, using Central Provident Fund (CPF) monies. Combined, our outstanding loan commitments come to $95,000.

Now, my sister, who is 40, is getting married.

After her marriage, can she and her spouse move in with us against our wishes? If so, can the law protect the interests of both my parents and myself?

We have expressed our desire to buy out my sister’s share, but she has said no.

What legal options do my parents and I have? Are there any rights we can exercise to make her sell her share to us?

Selling the property is not an option.

A UNDER such a co-ownership arrangement, all four owners are entitled to the use and possession of the house, and none of you can claim a right to any separate part of it.

Thus, your sister can continue to live in the house after her marriage, but her husband, not being an owner, has no right of possession to any part of the house.

Your unequal contributions towards the purchase do not affect the equal rights of the four co-owners to use or possess the property .

One option is for the four owners to partition the property , allocating specific parts to each.

Agreement must be reached on the method to be used and other issues such as the title to the property and the adjustments of rights between the parties.

The agreement would also be subject to official approval under the Planning Act 1998.

Obviously, such a partition would be difficult to implement, especially if it is intended to allow at least two family units to live together in a terrace house.

If the parties cannot agree to a partition, any one of you can apply to the court to order a partition or to direct a sale of the property in lieu of partition.

The court might direct the property to be sold outright if this is more expedient. It could also order a sale where all the co-owners are free to bid for the shares of other co-owners.

You or your parents could propose buying over your sister’s share to the court.

If none of the co-owners is financially able or willing to take over the shares of other co-owners, then the court is likely to order that the property be sold in the open market and the proceeds divided among the co-owners in accordance with their entitlements.

Lie Chin ChinManaging DirectorCharacterist LLC (incorporating Lie Kee Pong Partnership)

Advice provided in this column is not meant as a substitute for comprehensive professional advice.