You either own something or you don’t, right? Well, it can get a tad more complicated. Law has created a number of ways in which property can be owned. The different categories serve varied property ownership situations so that there is something for everyone.
An interesting scenario comes about when the property owner is not a natural person but an artificial legal person such as a company. While many of the ownership dynamics remain the same, there is the fact that the artificial person cannot by itself act but uses its human agents to carry out legal activities.
In a previous article, we looked at different interests that may be held over land. One of these is a leasehold interest which is not absolute. This interest has sub categories, among which are joint tenancies and common tenancies.
A joint tenancy is one in which two or more individuals have identical interests in the whole of the property. This means that on his own, no individual owns any part of the property but as a group, the tenants own the entire property. A joint tenancy has the right of survivorship such that upon the death of any of the owners, that interest is extinguished and the survivors have an interest in the whole property. The interest of the joint owners is identical in extent, nature and duration.
A tenancy in common is one in which the owners hold divisible interests in the property. There is no unity of interests and the tenants may hold unequal shares. Companies can own property as joint tenants. In the case of Kenya, the relevant enabling provision is section 16 of the Companies Act. Where there is any instrument on property affecting a company that would have resulted in a joint tenancy in the case of an individual, the company becomes entitled to that property as a joint tenant. Companies can also own land as tenants in common. This is a less complicated form of ownership for companies than joint tenancies. For both forms of tenancies, companies can be co-owners with either other companies or with individuals.
Upon the dissolution of a company that is a joint tenant, its interest accrues to the surviving owners just as it would if the joint owners were individuals. There is absolutely no residual interest for the now dissolved company, its successors or it assigns.
Upon the dissolution of a company that is a tenancy in common, there is no right of survivorship so the company’s interest does not automatically devolve to the other tenants. Instead, the interest held would be dealt with by the company’s liquidator as though it were any other asset depending on whether or not the company is insolvent at the time of dissolution.
So really, it’s not always so simple as now you own it, now you don’t.