Joint or Co-Ownership of Property in India: A Sneak Peek

Did you know? The rights of co owners of property may vary for husband-wife and business partners. Tax implications of joint ownership of property might bring some benefits. Find the various types of joint ownership of property and understand the context behind. 

Joint Property Rules in India

As the term suggests, when two or more people jointly own a property and the shares are not separated but unified, the phenomenon is called joint or co-ownership of property. It could be joint ownership of property with parents, husband and wife, business partners, etc. The laws regarding joint ownership of property are specifically rooted with Section 44 of the Transfer of Property Act, 1882. The joint owners of a property enjoy mutual rights unless someone is restricted from enjoying certain aspects of common ownership of property in terms of possession, use, etc. Problems with joint ownership of property mainly arise in case of a dispute among joint owners. In such cases, property lawyers may help resolve such disputes to safeguard the rights of co owners of property. 

While buying a joint property via bank loan, one must assure that all the necessary documents are in place. It is easier to enter a co-ownership of property in one go. However, if a co-owner has to be added later on, it may be done through gift deed or a further sale of that particular portion of share in the property. People entering the joint ownership of property should make sure that all of them are on the same page regarding the terms and conditions of the enjoyment of property. 

Types of Co Ownership of Property

Joint Tenancy

It can be understood as the kind of ownership of property whereby each co-owner shares their interest in the property. The right of survivorship is crucial in a joint tenancy whereby the joint owner surviving the other gets the shares of the joint owner dying first. The co-ownership of property in joint tenancy need not be shared among relatives, since it could be a stranger as well. Example could be a group of friends owning a land jointly.

Tenancy in Common

Diverting from the concept of joint tenancy in the co-ownership of property, tenancy in common gives undivided interest in the property to each. In this type, each co-owner pays separate consideration (amount) for the property, based on which, the shares in the joint ownership of property are determined. For instance, if 5 partners buy an office space to carry out their business, the extent of ownership of each partner/ co-owner shall depend upon the amount of consideration, unless decided otherwise. In case one of the partners suffers from an untimely demise, his/ her legal heirs will become the rightful co-owners to the extent of property held by the deceased partner. 

Tenancy in Entirety

This is the kind of joint ownership of property whereby married couples jointly own a property. The property ownership is not considered separate but decisions are made mutually by the husband and wife. If one of the spouses wishes to make any changes in his interest in the property, consent of the other spouse is inevitable. The shares of one go in the name of the other in case of death. For example, when husband and wife jointly own a property, their shares of the property are also joint. The shares of one who dies earlier go to the surviving partner. Here, death of a person in co-ownership of property leads to dilution of shares with the other partner’s. For joint ownership of property of husband and wife in Kolkata, a lawyer in Kolkata may assist. 

Coparcenary

It is a concept exclusive to hindu religion whereby after a few generations living/ owning jointly an ancestral property, people get a rightful share in the property by birth/ adoption. Both sons and daughters are equal shareholders in the ancestral property being a coparcener. All the coparceners are the joint owners with equal shares in the property. Examples include co-owners with grandfather, father, aunt, son, sisters, daughters, all born into a joint hindu family having an ancestral property. 

Rights of Co-Owners of Property

As per section 44 of the Transfer of Property Act, 1882, there are three rights which a person enjoys being in a co-ownership of a property as depicted below:

1. Right to Possession
2. Right to Use
3. Right to Dispose-Off Share

It may be noted that one or more of these rights may be restricted to some conditions as per the agreement between the joint owners. For example, disposal of joint ownership of property may be subject to consent of the other owners. However, all these rights are restricted to the share of such co-owner in most of the cases unless it is the case of a married couple or so. 

Termination of Co-Ownership of Property

A joint ownership of property may come to an end through the following pathways:

• Voluntary Partition if all the partners mutually agree to end the joint ownership of property without court’s intervention.
• Termination by Court is also an option if co-owners are not able to reach a common podium amicably while discussing the partition. 
• A tenancy in entirety may come to an end with divorce or death of one of the spouses. It may also terminate with mutual consent of the husband and wife. 
• Release or relinquishment deed in case of family members willing to transfer their share of property in the name of another blood relation without seeking any consideration. 

Also Read NRI’s Right to Sell Property in India. 

Perks of a Joint Ownership of Property

• One can become one of the co-owners of a property which might otherwise be out of budget. 
• In case of need, co-owners can sell their own share of property, unless restricted in the agreement.
• Joint owners of a property enjoy tax benefits in case of a home loan. 
• Stamp duty is also less for co-ownership of property.

FAQs related to Joint Ownership of Property

Q- What happens when a joint owner of a property dies?

A- In case of joint tenancy or tenancy in entirety, death of one of the co-owners leads to devolution of share in surviving co-owners. For tenancy in common and well as coparcenary, death of one of the joint owners does not affect the co-ownership of property. It merely transfers rights in shares of such deceased joint owners to his/ her legal heir. 

Q- I have a joint ownership of property with parents. Due to this, I am unable to get HRA. Can I relinquish my share of property?

A- Yes, if the ratio of shares is not mentioned in the registration deed, you can easily release your shares in favour of your parents. This will help get those HRA benefits which were unavailable due to co ownership of property.

Q- My wife and I own a joint property. I am aged and ill, so I want my wife to carry out the sale of property without my involvement. Is it legally possible?

A- Yes, you can give the power of attorney to your wife empowering her to decide and carry out the sale without your presence. The other way could be releasing the 50% of your shares in your wife’s favour. For residents of Kolkata, the property lawyers in Kolkata can help carry out the legal formalities. 

Q- My husband and I bought a house and took a loan jointly. He has stopped paying the EMI and I am bearing the costs all alone. Now, I want to pay the loan alone. Is it possible to remove my husband from the joint ownership?   

A- It is possible to get the husband removed from co-ownership of the property through a suit of declaration from the court in this regard. You should possess all the necessary evidence proving payment of loan EMIs by you.