Joint Property Ownership in Malaysia: Rights, Risks and Disputes

Joint property ownership is a common arrangement in Malaysia, particularly among married couples, family members and business partners who purchase property together. However, many co-owners are unaware of the legal distinctions between different forms of joint ownership and the potential risks and disputes that can arise. The two principal forms of co-ownership in Malaysian law are joint tenancy and tenancy in common, and the choice between them has significant implications for the right of survivorship, the ability to dispose of your share and the resolution of disputes. This guide explains the key differences and the legal options available to co-owners.

Joint Tenancy vs Tenancy in Common

The distinction between joint tenancy and tenancy in common is fundamental:

• Joint tenancy: The co-owners hold the property together as a single unit, with each owner having an undivided share in the whole property. The key feature of joint tenancy is the right of survivorship (jus accrescendi), which means that when one joint tenant dies, their share automatically passes to the surviving joint tenant(s) by operation of law, regardless of what the deceased's will says. The deceased's share does not form part of his estate for distribution purposes.
• Tenancy in common: Each co-owner holds a distinct and separate share in the property, which may be equal or unequal. There is no right of survivorship, meaning that each tenant in common can dispose of their share by will or, if they die intestate, their share passes to their heirs under the Distribution Act 1958. Each tenant in common effectively owns their share independently of the others.

How to Determine the Form of Ownership

The form of co-ownership is typically determined by the wording in the document of title (for properties with individual titles) or the SPA (for properties still held under the master title). Where the document states that the property is held "as joint tenants" or does not specify the shares of each owner, a joint tenancy is presumed. Where the document specifies the shares (for example, "as tenants in common in equal shares" or "in the proportion of 60:40"), a tenancy in common is created. It is important to ensure that the correct form of ownership is specified at the time of purchase, as changing the form of co-ownership after acquisition requires a transfer and may attract stamp duty.

Rights of Co-Owners

Regardless of the form of co-ownership, each co-owner has the following rights:

• Right to occupy: Each co-owner has the right to occupy and enjoy the whole property, not just their share.
• Right to income: If the property generates rental income, each co-owner is entitled to their proportionate share.
• Right to partition: Any co-owner may apply to the court for an order partitioning the property, dividing it into separate portions or ordering the sale of the property and division of the proceeds.
• Right to contribution: Co-owners are generally expected to contribute to the costs of maintaining the property, including loan instalments, quit rent, assessment and insurance, in proportion to their shares.

Common Disputes Between Co-Owners

Joint property ownership can give rise to various disputes, including:

• Non-contribution to expenses: One co-owner refuses to pay their share of the mortgage, maintenance costs or taxes.
• Disagreement on sale: One co-owner wishes to sell the property while the other wants to retain it.
• Dispute over rental income: One co-owner collects rent but does not share it with the other co-owners.
• Unauthorised occupation: One co-owner allows third parties to occupy the property without the consent of the others.
• Dispute on death: Disagreements between the surviving co-owner and the deceased's heirs over the right of survivorship.

Resolving Co-Ownership Disputes

Co-ownership disputes can be resolved through negotiation, mediation or court proceedings. The most common court remedy is an order for sale under Section 148 of the National Land Code 1965, which allows the court to order the sale of the property and the division of the proceeds among the co-owners. The court may also order the property to be partitioned physically if this is practical. In practice, sale by public auction or private treaty is the most common outcome. The property law team at Messrs S K Song regularly handles co-ownership disputes and can advise on the best approach.

Severance of Joint Tenancy

A joint tenancy can be severed (converted into a tenancy in common) by any joint tenant acting unilaterally. Severance can be effected by written notice to the other joint tenants, by mutual agreement or by court order. Once a joint tenancy is severed, the right of survivorship no longer applies and each tenant in common can dispose of their share independently. Severance is often used in the context of divorce or relationship breakdown to ensure that each party's share passes to their chosen beneficiaries rather than automatically to the other co-owner.

How Messrs S K Song Can Help

The property law team at Messrs S K Song advises on all aspects of joint property ownership, including the purchase of property as co-owners, severance of joint tenancy, co-ownership agreements and dispute resolution. Whether you are considering buying property with a partner or are involved in a co-ownership dispute, contact our Johor Bahru office for expert legal advice.