My HDB: Joint tenancy or Tenancy-in-common?

Should you hold your HDB or property in Joint Tenancy or Tenancy-in-Common? Which is better? This article takes you through both methods and will help you evaluate which of the two suits your needs.

Liane Yong

Liane Yong

Lawyer, Managing Director

10 min read •

Table of Contents

Whether you are a prospective property owner or already own a property in Singapore, understanding the different methods of holding property is essential. In Singapore, properties like HDB flats can be held in two ways:

Joint Tenancy and Tenancy-in-Common.

Joint tenancy and tenancy-in-common are both popular options, but they have distinct features and implications. Joint tenancy offers a right of survivorship, meaning that when one co-owner passes away, the surviving owner automatically inherits the entire property, regardless of any Will or preference of the deceased joint owner. On the other hand, tenancy-in-common allows owners to hold different percentages of the property and offers more flexibility in terms of distribution upon the death of an owner.

Read on as we delve deeper into the concepts of joint tenancy and tenancy-in-common, highlighting their differences, advantages, and disadvantages. We will also explore the legal implications of each ownership type and the process of converting between the two.

HDB Ownership: Joint Tenancy vs Tenancy-in-Common

Joint tenancy and Tenancy-in-Common can significantly impact your property rights.

  • Joint Tenancy owners have equal rights to the property, with the right of survivorship.
  • Tenancy-in-Common allows for distinct shares and the freedom to transfer ownership.

These distinctions are crucial in decisions regarding property transfer and estate planning. It is essential to grasp these concepts before deciding on the ownership structure that best suits your needs and circumstances.

What is Joint Tenancy?

Joint tenancy involves co-owning an HDB flat with equal ownership rights. If one owner passes away, their share automatically transfers to the surviving joint tenant(s). Created through a single transaction, joint tenancy ensures seamless transfer of ownership. This option is preferred for family members or business partners due to its simplicity and right of survivorship feature.

Mortgage on property with joint tenants

For joint tenancy, your mortgage usually will be in both your names. Upon your death, the responsibility of your mortgage passes on to your co-owner. If the surviving owner cannot service the mortgage then the bank can take possession of the property and can sell it to fulfil the mortgage.

What is Tenancy-in-Common?

Tenancy-in-common involves co-ownership where each party holds a distinct share of the property. Unlike joint tenancy, there is no right of survivorship, meaning each owner can pass on their share to their chosen beneficiaries. This ownership type allows for unequal shares and provides more flexibility in terms of ownership transfer and inheritance arrangements. It is a popular option for property owners seeking to specify individual shares and have more control over their separate shares of the property.

Differences Between Joint Tenancy and Tenancy-in-Common

When looking at HDB ownership, the key differences between joint tenancy and tenancy-in-common lie in how ownership is structured.

  • Joint tenancy

    Co-owners have equal interests and the right of survivorship, meaning if one owner passes away, their share automatically goes to the surviving owner(s).

  • Tenancy-in-common

    Each owner holds a distinct share of the property, which can be of unequal sizes. This ownership type does not include the right of survivorship, allowing owners to transfer their shares as they see fit.

Right of Survivorship - Joint Tenancy vs Tenancy-in-Common

  • Joint Tenancy

In joint tenancy, the right of survivorship means that if one owner passes away, their share automatically transfers to the remaining joint tenants without the need for probate. This feature ensures a seamless transfer of ownership and avoids potential complications. It’s like a built-in safeguard that simplifies the process for surviving joint tenants. This aspect can be reassuring for those considering joint tenancy for their HDB property in Singapore. It provides a sense of security knowing that ownership rights are clearly defined and protected.

Joint tenancy and the danger of unfair distribution

Under joint tenancy, when one co-owner passes away, the surviving co-owner gains full control over the property. Upon the surviving co-owner’s demise, the property distribution follows their Will or intestacy laws.

For example,

Rachel and Brandon are a married couple without any kids. They own a HDB under joint tenancy and Rachel dies, Brandon becomes the sole owner. If Brandon subsequently passes away without a Will, the property will pass to Brandon’s parents under intestacy law, leaving Rachel’s family unaccounted for in the final distribution of the HDB. However, utilising mirror wills can resolve this issue.

Mirror Wills offer couples holding their HDB jointly a solution to prevent unfair or unintended property distributions. In a mirror will, both spouses outline similar distributions. For instance, one spouse may leave the HDB to the other, with provisions for alternate beneficiaries if the spouse predeceases. Mirror Wills ensure that the wishes of both spouses and their extended families are considered in the final distribution of the HDB, as long as the intended beneficiaries meet the eligibility requirements.

Interested in learning more about Mirror Wills? Read our full article here on Mirror Wills to make informed decisions about your estate planning needs.

  • Tenancy-in-Common

Tenancy in common does not have the right of survivorship feature. In this arrangement, each owner’s share of the property is considered part of their estate. Upon the death of one owner, their share does not automatically transfer to the other owner(s). Instead, it is passed on according to their Will or the laws of intestate succession. This lack of automatic transfer can lead to more complex estate administration and potential disputes among beneficiaries.

When considering HDB flat ownership in Singapore, whether through joint tenancy or tenancy-in-common, it’s essential to understand the implications for your estate planning. Your choice can significantly affect how your assets are distributed after you’re gone. With WillCraft, a user-friendly online will-making platform, you can make informed decisions early on, ensuring your wishes are carried out smoothly.

Select WillCraft as your preferred online Will maker, customise as desired, and create your will effortlessly.

Click here to learn more about WillCraft now!

Advantages and Disadvantages of Joint Tenancy

  • Advantages of Joint Tenancy

    One of the main advantages of joint tenancy is the right of survivorship, meaning if one owner passes away, the property automatically transfers to the surviving joint tenant. This feature can simplify inheritance matters and ensure seamless transfer of ownership.

  • Disadvantages of Joint Tenancy

    However, a potential downside is that all joint tenants have equal ownership rights, which could lead to conflicts if there are disagreements regarding the property.

It’s essential to weigh these aspects carefully when deciding on this ownership type.

Advantages and Disadvantages of Tenancy-in-Common

  • Advantages of tenancy-in-common

    Advantages include flexibility in ownership shares and the ability to pass down shares to heirs. This type allows for unequal shares, useful when one investor contributes more.

  • Disadvantage of tenancy-in-common

    However, downsides involve potential conflicts among co-owners and the lack of a right of survivorship, meaning a deceased owner’s share doesn’t automatically transfer. This can lead to complexities in estate distribution.

Consider these factors when deciding on tenancy-in-common for your HDB property.

The legal implications of each ownership type is crucial when considering HDB ownership.

  • Joint tenancy

    The right of survivorship grants the surviving owner full ownership.

  • Tenancy-in-common

    Each owner holds a distinct share, allowing for the transfer of their share to a third party.

Understanding joint tenancy and tenancy-in-common is crucial for informed decisions, particularly in an event of a divorce. Knowing ownership rights is essential for a smooth process, making familiarity with legal intricacies important.

How These Ownership Types Affect Inheritance

In terms of inheritance, the way joint tenancy and tenancy-in-common are structured can have significant implications.

  • Joint tenancy

    The right of survivorship means that if one owner passes away, their share automatically transfers to the remaining owner(s), bypassing the need for a will.

  • Tenancy-in-common

    Each owner’s share forms part of their estate and can be passed on according to their will.

This key difference can impact how assets are distributed amongst heirs.

Converting Between Joint Tenancy and Tenancy-in-Common

Converting the manner of holding your HDB is possible, allowing you to switch between joint tenancy and tenancy-in-common. If you’re under tenancy-in-common, you have the option to change the shares in which you hold the HDB from unequal to equal shares or vice versa with the application form. A change in the manner of holding from joint tenancy to tenancy-in-common or vice versa requires that the tenancy-in-common be in equal shares. The option of unequal distribution of shares is not available when converting the ownership.

For example,

If Rachel and Brandon hold their HDB under tenancy-in-common with a 40:60 proportion, they must first adjust to a 50:50 proportion before changing to joint tenancy.

Conversely,

If Rachel and Brandon hold their HDB via joint tenancy when they convert it to tenancy-in-common, it will be in equal shares (50:50 proportion). Then, if they desire, they can adjust the proportion using the application form. If the property is under a mortgage, you will need to get the consent of the bank before you convert the holding in the property.

It’s crucial to obtain the bank’s consent if the property is under a mortgage.

Conclusion

As seen from above, the main difference between holding a property via joint tenancy and tenancy-in-common is the right of survivorship. Both manners of holding have their own advantages and considerations that you must evaluate before making a decision. While under joint tenancy, your HDB won’t form a part of your estate at all. But, while under tenancy-in-common, you will need to make provisions in your Will on how you would like the ownership of your HDB to be distributed. Making a Will may seem overwhelming but WillCraft can help!

**Our user-friendly platform makes creating a Will easy, and in just under 30 minutes! Our services involve a simple and inexpensive process which not only guides you throughout the whole process, but it also allows you to customise your Will from the comfort of your own home. Our service is full featured and covers up to 10 million will permutations at prices starting from only S$99 to create a legally valid Will! **

Simplify your estate planning process and ensure your assets are distributed as you wish. so you can have peace of mind knowing your loved ones are taken care of.

Plan Easily With WillCraft!

Joint tenancy or tenancy-in-common?

Learn More

Note: Trying out WillCraft's interface is free! No credit card is required.

Want to know more about us?

Explore our Packages and Pricing page, where we offer transparent options for different services, all with flat fees and no hidden costs. Additionally, find answers to your most pressing questions on our FAQs page.

Frequently Asked Questions

Can I change from joint tenancy to tenancy-in-common at any time?

Yes, changing from joint tenancy to tenancy-in-common is possible but requires mutual agreement and legal documentation. Seek advice from legal professionals as the process involves specific steps to ensure a smooth transition.

How does joint tenancy affect my ability to sell or Will my HDB flat?

Joint tenancy affects your ability to sell or Will your HDB flat in the following ways:

1. Selling: In a joint tenancy, all owners have an equal share of the property. This means that if you want to sell the HDB flat, all owners must agree to the sale. Each owner's consent is required before any transaction can take place.

2. Will: In a joint tenancy, if one owner passes away, their share of the property automatically transfers to the surviving owner(s). This means that you cannot Will your share of the HDB flat to another individual unless you sever the joint tenancy and convert it to a tenancy-in-common.

It's important to understand these implications before making any decisions regarding the sale or inheritance of your HDB flat under joint tenancy ownership.

What happens to a tenancy-in-common arrangement if one owner passes away?

In a tenancy-in-common arrangement, if one owner passes away, their share of the property doesn’t automatically transfer to the co-owner. It becomes part of the deceased owner's estate and is distributed according to their Will or intestacy laws.

Is it possible to have unequal shares in a joint tenancy?

In a joint tenancy, all owners have equal shares, entailing the right of survivorship. Unequal shares are not possible in this ownership type as each owner has an undivided interest in the property.

Disclaimer: The information provided here is for general guidance and does not constitute legal advice. Please consult a lawyer to seek legal advice that is specific to your needs.
Published on , and updated at .