Simple Article on Co-ownership

Simple Article on Co-ownership


Table of Contents

Co-ownership of property 

Types of co-ownership

Laws related to the transfer of property by a co-owner

Rights of a co-owner

Co-ownership benefits


Co-ownership of property 

Co-ownership or joint ownership means when two or more persons hold title to the same property. Co-owners of a property mean all the owners of that particular property. Any co-owner can transfer his/her personal share in such property to a co-owner or even a stranger which results in that transferee stepping into the shoes of the co-owner. A co-owner generally has the right to possession, right to use, and even dispose off the property.


Types of co-ownership

There are a few types of co-ownerships. These have been explained below:


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. Each tenant-in-common has a separate fractional interest in the property. However, each tenant-in-common may possess and use the entire property. Each tenant-in-common can freely transfer his/her interest in such property. Tenants-in-common don't have the right of survivorship. Hence, if one dies, his/her interest passes by way of Will or through laws of intestacy to another individual who can then become a tenant-in-common, along with the surviving co-owners.


Joint Tenancy: Joint tenancy is a form of co-ownership where the 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. Joint tenancy entails the right of survivorship. If one such co-owner dies, it is immediately passed on to the surviving/other joint tenants. All the joint tenants have a single unified interest in the whole property. The joint tenancy must have undivided interests in the entire property, and not divided interests into separate parts. A joint tenancy can be created by a Will or a Deed. Each joint tenant should have estates of the same type and duration as well.


Tenancy by the entirety: This is a special form of joint tenancy when the joint tenants are namely the husband and wife -- with each owning one-half. To exist, tenancy by entirety requires the two co-owners to be married i.e., husband and wife. Under this type of co-ownership, no one spouse is allowed to convey or transfer his/her interest to a 3rd person. However, the husband or the wife can convey his/her share to their spouse. A tenancy by the entirety can only be terminated by way of a divorce, death, or a mutual agreement between the husband and wife. Such terminated tenancy becomes a tenancy in common.


Laws related to the 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 transaction.

According to this Act, every joint or co-owner has a proprietary right on 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.


Rights of a co-owner

A co-owner is entitled to three essentials of ownership:


Right to possession

Right to use

Right to dispose of his share of the property if it is clearly stated, in the deed.


Co-ownership benefits

If you are a married couple, co-owning a house with your spouse has many benefits. Both can get tax benefits. In case of joint ownership, the husband, as well as the wife individually, will be able to claim deductions under Section 24 of the Income Tax Act . In order to understand why co-ownership is better, you must take the help of a good property lawyer, who will be able to guide you in the right direction after understanding the facts and circumstances of your case.You can also contact us for Free Legal Advice.


Bharath L 

Advocate

High court of Karnataka, Bangalore

9844734166

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