Oran Hall | Reversing tenancy on a title
Published:Friday | May 25, 2018 | 12:00 AM
Q: I would like some advice on how to remove my name from a property title. What is the process? What is the least expensive route? I am on a title as a tenant-in-common and I would like to have access to the full benefits of my NHT loan. Both parties are in agreement to have my name removed. Both of us have never received a loan from the NHT.
Melissa
FINANCIAL ADVISER: Yours is a very interesting case, but it can be resolved.
Tenancy-in-common is the simultaneous ownership of real property by two or more parties. All tenants-in-common have individual and undivided ownership in the property.
Each tenant-in-common has an equal right to possession of the whole property but not the right to possess any part exclusively. Tenants-in-common may hold unequal share in the property, but if no share is stated, ownership is assumed to be in equal share such as 50:50 in the case of two tenants-in-common.
Tenants-in-common have the right to individually transfer their ownership or ownership interest as they see fit, by gift or by sale, for example. But such transfers would require the payment of legal fees, charges at the Stamp Office and Transfer Tax Department of Tax Administration Jamaica, and charges at the National Land Agency. Transfer by gift is the cheaper of the two options.
It is worth noting that tenancy -in-common does not have the right of survivorship by which, at death, ownership of property passes under the terms of the will or, if there is no valid will, interest passes under the terms of the Intestate Estates and Property Charges Act. The right of survivorship is a feature of joint tenancy.
If you want to surrender ownership in the property, you may choose from one of the two options mentioned earlier, but the National Housing Trust (NHT) has a facility which would allow you to derive a benefit without requiring you to do so. You could get a permission letter from the other tenant-in-common, signed and stamped by a justice of the peace, allowing you to build on the property.
This letter would allow you to get the full $5.5 million benefit under the build-on-own-land loan facility, but you would need to handle this very carefully considering that issues could arise later between you and the other owner of the property.
Beyond this, you would need to consider if you can afford to build with the loan funds from the NHT and other funds you may have, and if you would be able to borrow additional funds if there is a shortfall.
You mentioned that neither owner of the property has received a benefit from the NHT, but you did not say if you would both consider co-owning a home and possibly be able to borrow up to $11 million, together, from the NHT to do so.
MINIMUM REQUIREMENTS
There are other non-homeowners loan facilities you could qualify for if you opt to divest yourself of part-ownership of the property.
The open market loan is for houses being sold on the market by individuals or agencies other than the NHT. The maximum loan amount is $5.5 million per qualified contributor.
The NHT scheme house loan is another. This is for houses financed or developed by the NHT and sold directly to NHT contributors. These units are advertised by the NHT in the media and contributors are invited to apply. The maximum sum each contribute can qualify for is $5.5 million, but two qualified contributors may join to apply and become eligible for a loan of $11 million.
Bear in mind that applicants for NHT benefits must meet the minimum requirements to have a chance of making a successful application. Earning enough income to be able to service the loan is a major hurdle to cross. You should be currently contributing to the NHT, have made at least 52 weekly contributions, 13 in the last 26 weeks just before the date of application, and have paid with interest any outstanding contributions due in the past three years.
If you are relatively young, count it as a bonus as age bears strongly on the time given to repay the loan. This is important as the longer the time available to make the repayment, the lower the monthly sum to be repaid.
Being a tenant-in-common does not mean you cannot receive a benefit from the NHT.
- Oran A. Hall, the principal author of 'The Handbook of Personal Financial Planning', offers personal financial planning advice and counsel.