Whether you are planning to buy a property alone or with your spouse, you have to be aware of your rights and what type of contract you are getting into; and making logical and factual decisions are the cornerstone of good asset management singapore.
If you’re planning to buy with another person, you have all the more reason to be informed about ownership and tenancy agreement. Knowing how many types of ownership there are will help you decide if you’re better off buying it alone or with another person.
Types of Ownership in Terms of Asset Management in Singapore
1. Joint Tenant
Joint tenancy refers to the ownership between you and another person. You are co-owners having bought a property together. You and the other person both have equity to the house(if you bought a house). This equity is shared equally between the two of you, and you are viewed as one single ownership. In the case of you buying a land or asset with three or more people the rule still stays the same, you all have equity to the property.
- Right of Survivorship – this is a right that applies to joint tenants. Take for example you buy a house with your brother or a best friend when that brother or best friend dies his share of the property will immediately be transferred to you. He can’t write in his will that he will give his share to his kid like in an equity trust, his share is not his to will away. So if you are planning to buy a property with a friend or sibling for the sake of inheritance to your children, then you might consider another type of ownership.
- Joint tenancy can only be possible if you and another person share unity in time, title, interest and possession. A joint tenancy will become terminated when one of these unity (time, title, interest and possession) is destroyed.
- A clear example of the statement above is this scenario: three friends Desmond, Jing Xuan, and Soon Yong decide to buy a property together. Desmond decides to sell his share to a woman named Annie, by doing this Desmond destroys one of the four unity (title). This, in turn, terminates the joint tenancy between him and Jing Xuan and Soon Yong. Annie then does not become a joint tenant to Jing Xuan and Soon Yong but instead becomes a tenant in common.
- As a joint tenant, you have the right to sell, mortgage or transfer your interest without the consent of your fellow joint tenants. And you are also free from unsecured debts.
- Net Assets – When you or your co-owner dies the property will be added to the total net asset of either of the survivors.
2. Tenants in Common
This similar to joint tenancy where you buy a property with another person; it can be two to three co-buyers, depends on you. But unlike joint tenancy, you all have distinctive shares on the property like let’s say 50% or 45%. You all share a single ownership of the property, just like in joint tenancy, but you know how much of the property you own, similar to a company.
- There is no right of survivorship when you die your share of the property goes to your heirs through a will. So if you plan to give your property to your heirs when you grow old then consider this type of tenancy.
- You have unity in ownership, but each of you holds separate titles.
3. Community Property
This is the property you acquire after you get married, also known as matrimonial assets. These assets are governed by the country’s law concerning the division of assets. Fixed assets you buy like homes, businesses will be under the marriage law of Singapore. So if you have a spouse, then you both have equal shares to a property you buy during a marriage.
Purchasing a property is not a walk in the park, you need to put enough thought and have a sound mind before you make a decision. Being informed and aware of your decision will the long run bare fruit of good asset management, but the choice is yours to make.