Property can be bought and owned jointly by more than one person and that is what joint ownership means in the simplest term. However, the whole subject can be pretty complicated; specially definitions of their different forms and their implications.
One of the most common reasons for owning property jointly is of course financial. People pool in funds to buy a property. A common example of this is purchase of property by husband and wife. By clubbing their incomes, they are also eligible for a higher loan amount. The couple having separate sources of income may pool in their resources to buy a home.
Let’s start by knowing the different types of co-ownership under the law:
Tenants in Common: When two or more people buy a property but do not specifically mention the share that each has in the property, a 'tenancy-in-common' is said to exist. All the co-owners can use the entire property and every co-owner is deemed to be having an equal share in the property. Upon death of one of the co-owners, the interest in the house does not pass to the other co-owners but to the person named in the will of the deceased, who will then become a tenant-in-common with the surviving co-owners.
Joint tenancy: Joint tenancy is a form of co-ownership where property is owned by two or more persons at the same time in equal shares. This type of tenancy provides rights to ownership of the property for the co-owners who outlive other co-owners.
Unlike tenants-in-common, when one joint tenant dies, his/her interest automatically passes on to the surviving joint tenant(s).
However the legal requirement for this type of co-ownership is that the co-owners need to take the same title at the same time, same deed and with equal interests.
Tenancy by entirety: This is a special form of joint tenancy when the joint tenants are namely the husband and wife -- with each owning one-half. Neither spouse can sell the property without the consent of the other. In this type of tenancy also, the share of ownership of one co-owner automatically passes on to the co-owner who outlives the other. Apart from these aspects in joint tenancy, there is one more here. This last aspect is the unity of marriage, which can be terminated only by divorce, death or mutual agreement of both the spouses. However, such a termination will result in the type of ownership to be converted to 'Tenancy in Common'.
What are laws regarding transfer of property by a co-owner?
Section 44 of the Transfer of Property Act 1882 deals with transfer by a co-owner and it also deals with the rights of a transferee in this type of a transaction. According to the Transfer of Property Act every joint or co-owner has a proprietary right of the entire property. Hence, any sale has to be done with the consent of all co-owners involved. If, however there are specific conditions in the agreement that gives co-owners exclusive rights to certain parts/portions of the property, a co-owner can sell his portion to whom he chooses. However, a currently dwelling house is an exception to this rule, where consent has to be sought from both co-owners who jointly own the house.
What are the rights of a co-owner?
A co-owner is entitled to three essentials of ownership:
1) Right to possession.
2) Right to use.
3) Right to dispose off his share of the property if it is clearly stated, in the deed.
Therefore, if a co-owner is deprived of his property, he has a right to be put back in possession.
Why is co-ownership better?
If you are a married couple, co-owning a house it with your spouse has many benefits. Both can get tax benefits. In case of a joint ownership, the husband as well as the wife individually will be able to claim deductions under Section 24 of the Income Tax Act, for up to Rs 150,000 for interest.
You can claim tax benefits for your principal amount under Section 80C for a maximum of Rs 100,000. It also enables you to bargain for a bigger loan amount by clubbing your spouse's income. It also enables easy transfer of property to your children.
A partition deed for a property is executed to divide the property among different
Mr. Anil Mithas, CMD of Mithas Group, a realty major with several projects in the NCR advises, “Before getting into a joint-ownership please do your due diligence and most importantly be absolutely sure that you want to be in a co-ownership relationship, since it is complex in nature.”
Source: http://www.unnatifortune.com/
One of the most common reasons for owning property jointly is of course financial. People pool in funds to buy a property. A common example of this is purchase of property by husband and wife. By clubbing their incomes, they are also eligible for a higher loan amount. The couple having separate sources of income may pool in their resources to buy a home.
Let’s start by knowing the different types of co-ownership under the law:
Tenants in Common: When two or more people buy a property but do not specifically mention the share that each has in the property, a 'tenancy-in-common' is said to exist. All the co-owners can use the entire property and every co-owner is deemed to be having an equal share in the property. Upon death of one of the co-owners, the interest in the house does not pass to the other co-owners but to the person named in the will of the deceased, who will then become a tenant-in-common with the surviving co-owners.
Joint tenancy: Joint tenancy is a form of co-ownership where property is owned by two or more persons at the same time in equal shares. This type of tenancy provides rights to ownership of the property for the co-owners who outlive other co-owners.
Unlike tenants-in-common, when one joint tenant dies, his/her interest automatically passes on to the surviving joint tenant(s).
However the legal requirement for this type of co-ownership is that the co-owners need to take the same title at the same time, same deed and with equal interests.
Tenancy by entirety: This is a special form of joint tenancy when the joint tenants are namely the husband and wife -- with each owning one-half. Neither spouse can sell the property without the consent of the other. In this type of tenancy also, the share of ownership of one co-owner automatically passes on to the co-owner who outlives the other. Apart from these aspects in joint tenancy, there is one more here. This last aspect is the unity of marriage, which can be terminated only by divorce, death or mutual agreement of both the spouses. However, such a termination will result in the type of ownership to be converted to 'Tenancy in Common'.
What are laws regarding transfer of property by a co-owner?
Section 44 of the Transfer of Property Act 1882 deals with transfer by a co-owner and it also deals with the rights of a transferee in this type of a transaction. According to the Transfer of Property Act every joint or co-owner has a proprietary right of the entire property. Hence, any sale has to be done with the consent of all co-owners involved. If, however there are specific conditions in the agreement that gives co-owners exclusive rights to certain parts/portions of the property, a co-owner can sell his portion to whom he chooses. However, a currently dwelling house is an exception to this rule, where consent has to be sought from both co-owners who jointly own the house.
What are the rights of a co-owner?
A co-owner is entitled to three essentials of ownership:
1) Right to possession.
2) Right to use.
3) Right to dispose off his share of the property if it is clearly stated, in the deed.
Therefore, if a co-owner is deprived of his property, he has a right to be put back in possession.
Why is co-ownership better?
If you are a married couple, co-owning a house it with your spouse has many benefits. Both can get tax benefits. In case of a joint ownership, the husband as well as the wife individually will be able to claim deductions under Section 24 of the Income Tax Act, for up to Rs 150,000 for interest.
You can claim tax benefits for your principal amount under Section 80C for a maximum of Rs 100,000. It also enables you to bargain for a bigger loan amount by clubbing your spouse's income. It also enables easy transfer of property to your children.
A partition deed for a property is executed to divide the property among different
Mr. Anil Mithas, CMD of Mithas Group, a realty major with several projects in the NCR advises, “Before getting into a joint-ownership please do your due diligence and most importantly be absolutely sure that you want to be in a co-ownership relationship, since it is complex in nature.”
Source: http://www.unnatifortune.com/