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Nigeria Legal Information & Law Reports

JOINT OWNERSHIP OF PROPERTY IN NIGERIA

JOINT TENANCY

Joint ownership of property refers to a situation where two or more individuals contribute resources to acquire and hold title to a landed property, which may be used for residential, commercial, or industrial purposes. Such ownership can arise as a result of joint purchase, inheritance, or as a gift. It is commonly seen among married couples, family members, or individuals who decide to acquire property together.

In cases of joint ownership, each party holds equal proprietary rights to the property, regardless of the extent of their individual contributions. These rights allow the co-owners to exercise control and make decisions regarding the property jointly. Joint ownership of property comes with both benefits and limitations. 

While it ensures shared possession and unity of ownership, it also requires mutual agreement for significant decisions and imposes restrictions on individual actions. In Nigeria, joint ownership is primarily governed by the Land Use Act of 1978, which vests all land in a state under the governor’s control, who grants rights of occupancy. Joint owners typically obtain a joint Certificate of Occupancy. 

Legal Implications of Joint Ownership of Property

Joint ownership of property involves specific legal implications that govern the rights, obligations, and limitations of the co-owners. Whether the property is acquired through purchase, gift, or inheritance, the following principles apply:

1. Unity of Possession, Title, and Interest

In joint ownership, all owners share equal rights to the entire property. This ensures that no single owner can claim exclusive possession or ownership of any specific part of the property. Instead, all parties have an undivided interest and can enjoy the property collectively. This unity of possession extends to the use and management of the property. It fosters shared responsibility and decision-making.

2. Survivorship Rights (Right of Survivorship)

One of the most significant implications of joint ownership is the principle of survivorship. When one owner passes away, their share in the property does not form part of their estate or pass to their heirs. Instead, it automatically transfers to the surviving co-owners. This feature is particularly common in joint tenancy arrangements. While this ensures continuity of ownership, it may also limit the ability of an individual to pass on their interest to beneficiaries through a will.

3. Consent for Alienation

For any transfer, sale, or other alienation of rights in jointly owned property, the unanimous consent of all co-owners is required. If one party attempts to sell or transfer their share without the consent of others, the transaction is considered legally defective. Consequently, the title transferred to the purchaser may be invalid or subject to legal challenges, which can create disputes and complications in the property’s ownership.

4. Restrictions on Individual Actions

Joint owners cannot unilaterally make decisions that affect the property without consulting and obtaining the agreement of the other co-owners. For example, one owner cannot mortgage or lease the property without the consent of the others, as this would infringe upon their shared rights.

5. Potential for Disputes

Joint ownership can sometimes lead to disagreements, particularly if there are differences in how the property should be managed, used, or disposed of. It is important for co-owners to have clear agreements in place regarding the management and future disposition of the property to minimize conflicts. Understanding these legal implications is essential for co-owners to manage their rights effectively and avoid potential disputes.

Types of Joint Ownership in Nigeria

In Nigeria, joint ownership of property is commonly categorized into two types:

  1. Joint Tenancy 
  2. Tenancy-in-Common

These forms are different in their legal implications, rights of the co-owners, and what happens to ownership upon the death of a co-owner. Let us examine them individually.

1. Joint Tenancy

Joint tenancy is a form of concurrent property ownership where co-owners share equal rights to the entire property and enjoy the right of survivorship. This means that if one co-owner dies, their ownership interest automatically transfers to the surviving co-owners, bypassing their heirs or estate.

Also, joint tenants share equal, undivided ownership of the entire property. All co-owners are equally responsible for any liabilities or obligations tied to the property, such as debts or maintenance costs. The property can only be sold or transferred with the unanimous consent of all joint tenants. Any sale or alienation of the property requires agreement and signatures from all co-owners.

2. Tenancy-in-Common

Tenancy-in-common is a form of joint ownership where co-owners have distinct, divisible shares in the property. Unlike joint tenancy, this type of ownership allows for more flexibility and individual rights. 

The property’s title instrument in a tenancy-in-common explicitly includes words of severance, separation, or distribution. This means each co-owner’s share is clearly defined, and the shares may be unequal, depending on the contributions or agreement of the parties.

Also, co-owners in a tenancy-in-common can freely transfer, sell, or lease their share of the property without requiring the consent of other co-owners. This independence allows for greater autonomy over individual interests.

Unlike joint tenancy, tenancy-in-common does not include the right of survivorship. When a co-owner dies, their share of the property becomes part of their estate. It can be passed on to heirs or beneficiaries in accordance with the deceased’s will (if they died testate) or governed by applicable inheritance laws (if they died intestate). This ensures the deceased’s interest is preserved for their family or chosen beneficiaries.

Steps to Secure Joint Ownership

Securing joint ownership of property involves several critical steps to ensure the arrangement is legally binding, transparent, and aligns with the intentions of all co-owners. These steps include the following:

1. Draft a Legal Agreement

Create a comprehensive and legally binding document that defines the terms of ownership, rights, and responsibilities of each co-owner. The agreement should specify the financial or non-financial contributions of each party. It should state whether the ownership is joint tenancy or tenancy-in-common, and define the share of each co-owner. It should outline how the property will be used whether residential, rental commercial, etc, and other important agreements to bind the joint owners.

2. Obtain Proper Title Documentation

Joint owners must ensure the property is registered in the names of all co-owners with clear identification of their ownership rights. It is also important to verify that the title document correctly reflects the agreed ownership structure, whether joint tenancy or tenancy-in-common. 

It is important to engage the professional services of a property lawyer to ensure that the documents adhere to local property laws and regulations to avoid disputes or defects in title. Finally, save the title documents securely, and ensure all co-owners have access to copies.

3. Seek Professional Legal Advice

Engage a qualified property lawyer to draft and review agreements, verify title documents, and ensure compliance with applicable laws. You should also consult financial advisors to understand the tax implications, liabilities, and financial planning aspects of joint ownership.

We also advise that you consider involving a professional appraiser to determine the fair market value of the property, ensuring transparency in transactions. Keep detailed records of all transactions, communications, and agreements related to the property.

Conclusion

Joint ownership of property is complex, as it involves two or more individuals coming together to own property either as joint tenants or tenants in common. This arrangement requires careful consideration of the legal and practical implications associated with shared ownership.

It is important to understand that joint ownership is not limited to the original owners. Over time, it may extend to other individuals who become joint holders through inheritance, transfer, or other legal means. Therefore, anyone considering joint ownership should be aware of these potential complexities, particularly when planning investments or drafting wills.

Always consult a qualified legal professional to guide you through the process and ensure that your interests are adequately protected. For more inquiries or legal advice, kindly reach out to Resolution law firm for a professional consultation.