"We both own the house. Can I sell it if the other owner refuses?"

Two siblings jointly own a house inherited from their parents.

Each is registered as the owner of an undivided one-half share.

One sibling wants to sell because the house is vacant and becoming expensive to maintain. The other refuses because he believes the property should remain within the family.

An interested buyer makes an attractive offer.

The first sibling says:

“I own half of the house. Surely I can sign the Sale and Purchase Agreement for my half and let the buyer deal with my brother later.”

The legal position is not that simple.

A co-owner may have a registered share in the property, but that does not mean the co-owner owns a specific bedroom, floor or physical half of the land.

1. An undivided share is not a physically divided portion

Where two people are registered as co-proprietors in equal shares, each generally holds an undivided interest in the whole property.

Unless the land has been formally partitioned, neither owner can ordinarily point to a particular physical area and say:

“This part is legally mine, and the other part belongs to the other owner.”

An informal family arrangement may determine who occupies which part, but it does not necessarily alter the registered ownership.

This distinction becomes important when one co-owner wants to sell, charge, lease, renovate or develop the property.

2. Selling the entire property usually requires every registered owner

To transfer the entire property to a purchaser, all registered proprietors will ordinarily need to participate in and execute the relevant transaction documents.

One co-owner generally cannot transfer the other co-owner’s registered interest without lawful authority.

The buyer will also want to know that:-

• Every registered owner has agreed to sell.

• The transfer can be executed by all necessary parties.

• Existing financing can be redeemed.

• Vacant possession can be delivered.

• No co-owner will later challenge the transaction.

• The sale proceeds can be distributed properly.

A Sale and Purchase Agreement signed by only one of several owners may not give the buyer the whole property that the buyer expects to acquire.

3. Can one owner sell only his undivided share?

A co-proprietor may, subject to the title, applicable restrictions, existing agreements and legal requirements, be able to deal with his own undivided share.

However, selling an undivided share is commercially different from selling a physically separated portion of land.

The buyer may become a new co-proprietor with the remaining owner. The buyer may not obtain exclusive ownership of any particular room, building or section merely by purchasing that share.

This raises practical questions:-

• Who may occupy the property?

• Can either owner collect rent?

• Who pays for repairs and taxes?

• Can the buyer renovate?

• What happens if the owners continue to disagree?

• How will the property eventually be divided or sold?

For these reasons, the market for an undivided share can be significantly smaller than the market for the entire property.

4. A private agreement between the owners should be reviewed

Some co-owners have previously signed an agreement regulating the property.

It may contain:-

• A right of first refusal.

• A restriction against selling to outsiders.

• A method for valuing a departing owner’s share.

• A requirement to offer the share to the other owner first.

• Rules on occupation, rental and expenses.

• A mechanism for resolving deadlock.

• An agreed timetable for a future sale.

The registered title should therefore be considered together with any co-ownership, settlement, shareholders’ or family agreement affecting the property.

Even where nothing has been signed, messages and past conduct may become relevant if the parties later dispute what was agreed.

5. What if one owner has paid more than the other?

One owner may have paid the deposit, loan instalments, renovation expenses or property taxes.

That financial contribution does not automatically change the registered proportions of ownership.

However, it may become relevant to a separate claim or to the accounting between the owners, depending on the evidence and legal basis relied upon.

The parties should gather:-

• Bank statements and payment receipts.

• Loan records.

• Renovation invoices.

• Rental records.

• Messages concerning their original arrangement.

• Evidence of who occupied the property.

• Any agreement concerning reimbursement or beneficial ownership.

The distribution of the eventual sale proceeds should not be decided only by whoever currently holds the keys.

6. What happens if a co-owner dies?

The deceased owner’s share does not automatically pass to the surviving co-owner merely because both names appear on the title.

The effect depends on the legal nature of the ownership and the applicable succession process.

Where the deceased’s share forms part of the estate, the appropriate personal representative or beneficiaries may need to be identified before a sale can proceed.

This may mean obtaining a grant of probate, letters of administration, distribution order or another relevant estate document.

A buyer should not accept signatures from family members who have not yet obtained the legal authority to represent the deceased owner’s estate.

7. Can co-ownership be terminated if agreement is impossible?

The first option should usually be a practical negotiated solution.

The owners may agree that:-

• One owner purchases the other’s share.

• The property is sold to a third party.

• The property is rented for an agreed period.

• The land is partitioned, if legally and physically permissible.

• One party occupies the property and pays agreed compensation.

• The sale proceeds are divided after agreed expenses are deducted.

If no agreement is possible, the National Land Code contains mechanisms relating to partition and the termination of co-proprietorship. Court proceedings may also be considered in appropriate circumstances.

The available remedy depends on the title, land area, planning requirements, number of owners and facts of the dispute. The National Land Code is the principal land legislation for Peninsular Malaysia but does not apply to Sabah and Sarawak, which have their own land laws.

A forced sale or court process should not be treated as automatic. It can involve valuation disputes, legal costs, delay and further deterioration of the relationship.

8. Do not accept a buyer’s deposit before the authority to sell is clear

Before marketing a jointly owned property, confirm:-

• The names and registered shares on the title.

• Whether every owner agrees to the proposed sale.

• Whether any owner is deceased, bankrupt or lacks capacity.

• Whether the property is charged or subject to a caveat.

• Whether consent to transfer is required.

• Whether a co-ownership agreement exists.

• How the sale proceeds will be distributed.

• Who will deliver possession upon completion.

If only some owners wish to sell, that issue should be resolved before a purchaser is asked to pay a deposit.

Joint ownership works while the owners share the same plan.

When their plans change, the registered shares, transaction documents and available exit mechanisms become critical.