The New Fatwa on Joint Tenancy: A Cinderella Story
The Fatwa on Joint Tenancy 2019 states that a contract of joint tenancy is a form of contract that has its own benefits and serves the needs of the community. This is permissible in Islam, as its objective is clear and unambiguous and there are no elements of injustice, oppressiveness or deceit within the contract.
Thus, upon entering into a joint tenancy contract, joint tenants agree to the following terms:
that the property that is the subject matter of the contract will remain wholly owned by the surviving tenant(s) upon the death of the other tenant(s); and
that the interest of each joint tenant in the property ceases upon his/her death.
Background to the Fatwa
Before the Fatwa Joint Tenancy 2019, there were 2 Islamic concepts that bear a resemblance to the concept of joint tenancy as we know it. The first concept is that of a sharikah contract, where the share of each joint tenant is set at 50%, and the second concept is that of “one ownership”, where joint owners only partially own the property upon the death of one of the joint owners.
However, as the main tenet of joint tenancy is the concept of right of survivorship, neither of the above concepts reflected the true position of joint tenancy that is stipulated by the law. This caused confusion for Muslims in Singapore when a joint tenant of a property passed away, as there were doubts as to whether the concept of right of survivorship applied or whether the concept of faraid overrides it.
This was the exact problem faced in the case of Shafeeg bin Salim Talib v Fatimah bte Abud bin Talib (“Shafeeg Salim”). The estate of the Deceased, Obeidillah bin Salim Bin Talib, (“the Estate”) argued that the Deceased, who owned a property as joint tenant with his widow, owned a half-share in the same property and as such, this half-share was to be distributed in accordance with faraid. However, the Deceased’s widow argued that her interest in the property was a gift from the Deceased to her and that he had expressed that he wanted her to have the property upon his death. The Deceased’s widow had filed a Notice of Death shortly after the death of the Deceased and was registered as the sole proprietor of the property. She subsequently transferred the property to herself and her two sons.
The solicitors representing the Estate then wrote to MUIS to seek a fatwa regarding joint tenancies. The fatwa issued by MUIS in response stated that the property, which was jointly owned by the Deceased and his widow, was considered a matrimonial property and that half of it would be considered as inheritance that should be distributed in accordance to faraid. (“the 2008 fatwa”) Thus, joint tenants who wished to give their shares to the other joint tenant(s) in the event of their death would have to make use of instruments such as nuzriah or hibah ar-ruqba to make such intentions clear.
Problems arise in implementing the 2008 fatwa for various reasons. Firstly, there were instances when the joint tenant’s intentions in relation to his/her share in the property upon his/her death is unclear as nuzriah or hibah ar-ruqba documents were not prepared in time and the deceased’s share in the property had to be distributed according to faraid. As the distribution can only occur after the property is sold, the surviving joint tenant(s) would be pressured by the beneficiaries of the deceased to sell the property and this tends to cause hardship to the surviving joint tenant(s).
Secondly, the 2008 fatwa was difficult to implement as according to the law of the land, the interest of a joint tenant would pass on to the remaining joint tenants in the event of the former’s death, which differs from the 50%-50% ownership decided by the fatwa. The position taken by the Court of Appeal in the case of Shafeeg Salim made it clear that according to the laws of Singapore, the concept of joint tenancy would take precedent over the 2008 fatwa.
The Cinderella Story
The story of Cinderella is a popular fairy-tale told to children. However, it parallels common situations faced today.
Cinderella was a girl whose mother passed when she was very young. After her mother’s death, Cinderella and her father never moved out and continued to live in the same house. Shortly after the death of her mother, Cinderella’s father married a woman who had 2 children of her own. A couple of years went by and Cinderella’s father also passed on, leaving Cinderella with her stepmother and 2 stepsisters. Although the house originally belonged to Cinderella’s mother and father, and subsequently belonged to her father, ownership of the house finally vested in Cinderella’s stepmother upon her father’s death. Cinderella was forced to do all the chores in the house and was heavily mistreated in the very house she grew up in.
The first potential issue is one that has been faced by many Muslims in Singapore today. It is the very same Cinderella story, where a stepmother (or father, as the case may be) is added as a joint tenant to the house. In many cases, the matrimonial property would have been substantially paid off by either the father or mother, prior to the death of either or both parties, with the stepmother contributing nothing or very little to the payment of the house. However due to the right of survivorship that exists under joint tenancy and the current fatwa, the original biological children are left with no share or interest in the house in the event of the passing of the original husband and wife, as only the biological heirs of the step-mother would inherit.
First Potential Issue
Second Potential Issue
Another potential issue posed by the fatwa arises when a parent has several children but only one sibling looks after him or her. In recognition of this fact, the parent names the sibling as joint tenant to the house. The sibling and parent thus own the house as joint tenants. This would mean that upon the death of the parent, the right of survivorship applies, and the sibling alone owns the house. However, when the parent passes on, the other siblings, who did not aid in caring for the parent and who believe that the house belongs to the parent would want the house to be sold to give everyone a “rightful” share under faraid. The sibling is then pressured into selling it by his/her siblings, even though the house rightfully belongs to him/her. Such a scenario is common place by anecdotal evidenced in this writer’s own legal practice.
Positive Impacts of the Fatwa
The fatwa has cleared up confusions brought about by the 2008 fatwa about ascertaining the intentions of parties to a joint tenancy agreement. Following the fatwa, as soon as the parties enter into a joint tenancy agreement, it is clear indication of their intention for the surviving joint tenant to own the whole of the property solely, or in the case of more than 2 joint tenants, for the deceased’s interest in the property to lapse and for the surviving joint tenants to own the whole of the property in joint tenancy.
It has also made it easier for Muslims who intend for the other named joint tenant to be the sole owner of the house in the event of their passing, as they are no longer required to execute other instruments such as hibah ar-ruqba or nuzriah, which would incur additional cost.
For the avoidance of doubt, the fatwa, although not legally binding, harmonizes the common law position and the Singapore Islamic position and carves out properties under a joint tenancy from the pool of assets under faraid. Therefore, the fatwa also protects surviving joint tenants from feeling pressured to sell the property to satisfy beneficiaries of the deceased.
Despite the positive impacts of the fatwa, it is clear that the first of the Cinderella problems still remain unresolved. This writer believes that this can best be done with better knowledge and greater awareness on the difference between joint tenancy and tenancy-in-common as well as the impact of choosing one manner of holding property over the other on faraid. This will enable parties to make better informed decisions, as they will be made aware of the potential consequences and implications of their choice. This is especially important as the fatwa only affects properties held under joint tenancy. Since properties held under tenancy-in-common remain as part of the pool of assets to be distributed under faraid, it is an option parties might wish to consider should they prefer their biological heirs to inherit a portion of the same.
Although there are still parts of the Cinderella story that remain unresolved, it is clear that the fatwa has clarified that the legal position held in Shafeeg Salim, i.e. that a property owned in joint tenancy is carved out from the pool of assets to be distributed under faraid when there is a surviving joint tenant, is accepted in Singapore Islamic law. Moving forward, there are still steps that can be taken to further protect the interests of Muslims in Singapore and the response of the Fatwa Committee to the issues with the 2008 fatwa gives hope that such steps could be implemented in due course.