It is very common for family members to leave their valuable real estate to the younger generation. A parent, grandparent, aunt and uncle may leave their landed houses, apartments or flats to those they love. It is common that siblings inherit a landed property together from a deceased parent or grandparent and are now co-owners of the said property. As new co-owners, siblings may not necessarily agree or share the same views on how the property should be used or dealt with.
Perhaps your brother is still living in the inherited home or maybe your sister does not want to move out so you can let out the property or sell the property and distribute the proceeds. They have lived in the property for so many years, often before the parent or grandparent passed away and sometimes because they help care for the person during his or her lifetime and have no immediate plans to move out. Perhaps they have also contributed to the expenses to upkeep the property or perhaps they were also under the impression that the parents/grandparents had intended for them to stay on after their demise. To the siblings, it is their permanent home and they have no plans to move away. At times, perhaps they also simply cannot afford another home of similar quality.
As co-owner, you are entitled to also derive benefits from the inherited home. Perhaps you would like to collect rent or feel that there are better investments than holding on to the property. You may also prefer to dispose of the property to pay for other pressing needs such as to finance your children’s education, medical expenses or for other purposes as you so choose. In such an event, if your sibling and you do not see eye to eye and they have refused to pay rent or move out, can you sell your share of your property or can you evict your sibling from your inherited home?
Selling your Share of the Property?
It is important to note that the co-ownership regime in Malaysia is a tenancy in common. ‘Tenancy in Common’ means that each co-owner’s shares are divided and treated as separate from the beginning. You, as co-owner, having a divided and separate share in the property, is permitted to dispose of your share in the inherited property to any other 3rd party including your sibling.
In a Tenancy in Common, each co-owner is also entitled to the possession and enjoyment of the property as a whole. In other words, each registered co-owner owns his fractional share over every part of the property and has full access to each and every part and corner of the house. It will be a good option if your sibling agrees to buy up your share of the property. However, if you are planning to sell to a 3rd party, do note that while you may sell your shares to a 3rd party, you can imagine that it will be difficult for any 3rd party to want to buy your shares if it means having to live in the property with your sibling. Your sibling as co-owner will have full access to each and every part of the house. Any potential 3rd party purchaser would likely want to acquire the entire 100 percent of the house, free from encumbrances and with vacant possession. In other words, to be able to sell the property to a 3rd party, your sibling will have to agree to sell his or her share as well and move out.
How Do I Remove my Sibling from the Inherited Property so It can be Sold?
As you and your sibling are co-owners, it is not possible to evict or remove your sibling from the inherited property. Remember that all co-owners have a right to enjoy the property and a right to access each and every part of the house. It is also not legally possible to confine each co-owner to a separate part of the home.
If you would like to partition the property, all co-owners will have to give their consent. Approval for partition application is subject to various technical, planning, policy and other conditions presently in effect. In most circumstances related to a residential home such as a landed house, apartment or flat, it may not be an option to physically split the inherited house by partitioning – it just would not work. In circumstances where partitioning is viable, then each of the owners should have a separate title deed of his share of a property and may deal with the relevant property unilaterally thereafter.
Option to Terminate Co-Ownership
If your sibling is not agreeable to moving out, you as a co-owner also have the option under Section 145 of National Land Code 1965, to apply to the court to terminate the co-ownership in the property. The termination of the co-ownership may involve:
- your sibling selling you his or her share of the property or vice versa. This may involve valuation of the undivided shares in the property and the transfer of the undivided shares of the property to the other co-owners for a price; or
- the property may be sold by court order in a manner to be determined by the court and the proceeds to be distributed between the co-owners according to their share in the property.
Generally, the court may make an order for sale by way of a public auction, but this may be undesirable for the parties as they may not be able to fetch the highest price for the property in an auction. There are a number of other manners of sale which you may plead for such as a sale by private treaty or some other direct sale for the court’s considerations. The court may appoint a party or person to conduct the sale, fix a reserve or minimum price or give such other directions as it sees fit. In one decided case, the court saw it fit to order a sale of land by private treaty to the highest offeror within a certain time frame, with a reserve price to be determined by a chartered valuer and the conduct of the sale to be handled by the same chartered valuer.
If you are having difficulty co-owning an inherited property, know that you are not alone and it is a common issue in property ownership. Property ownership with a sibling can come with complexities that are intertwined with familial relationships and expectations.
The above information is general and may not be applicable to your specific circumstances. However, feel free to get in touch with Kirsten Toh (kirsten@tohlaws.com or 016-206 8128) if you wish to obtain more specific legal information.