Legal tips related to shared ownership of property in India

A person can either own a whole parcel of land or property all by himself or can jointly own it with some other person. So, when a sole individual holds the title to any property, it is called ‘Sole ownership’. On the contrary, when more than just one person owns the property, it is said to be in a ‘Shared ownership’. Hence, it is also sometimes called Co-ownership or Joint-ownership. A property could be jointly owned by anyone, e.g., husband and wife, business partners, family members, etc. When parties have their share in any property, they, being the co-owner, will have the right to use, possess, and dispose of the said property.

Can a co-owner sell his share in a jointly owned property/shared ownership property?

1. Section 44 of the Transfer of Property Act 1882 clarifies that if one co-owner transfers his share in the property, then the transferee of the said share will be clothed with all the rights, liabilities, and obligations of such transferor. The transferee shall be entitled to the right of joint possession, enforcing partition of the property, or to enjoy such common or part enjoyment of the land to an extent the transferor wants.
2. Suppose the co-owner transfers his share of the property where the co-owners are dwelling. In that case, the transferee will not be entitled to the joint possession, any other part, or common enjoyment of the house as he is not a property member. This provision of the Transfer of Property Act, 1882, ensures the transferee’s right to joint possession and does not confer any right to exclusive possession without executing the partition on the land in question.
3. Furthermore, according to Section 47, when multiple co-owners of an immovable property transfer a share of the said property without specifying and identifying such share, then in such case, the transfer shall take effect on all the shares of the co-owners equally. And in case the property shares of the co-owners are unequal, then the transfer shall take place proportionately to all such unequal shares.

Property purchased from the common fund and co-owners interest.

1. In situations where two or more people buy the property from their common fund, each co-owner’s interest in the property would be directly proportional to their respective share in the common fund.
2. Further, if the property is bought in the good conscience, with the consent of all co-owners, and can later at any stage be established by the acceptable evidence that the payment amount for the purchase of the said property/land emanated from the common fund, then it would not become a stumbling block even if the said property is purchased in the name of only one of the co-owners.

How can a law firm help you?

There are perks to the shared ownership property. Still, it is always a bit of a pickle when it comes to selling the jointly owned property or partitioning a shared ownership property, as it is not mandatory that the percentage of the share will be equal for all the co-owners of the property. However, executing the partition deed, each owner will hold the individual title of their respective share and can deal with it as per his whims. Such partition of the property can be done voluntarily with mutual agreement among all the owners, or it can be done by filing a suit in a court of law without any mutual consent.

As mentioned above, the owner’s rights and obligation in the property entirely depend upon the type of joint agreement he has entered into. A law firm can help NRIs understand the contract’s legality between the co-owners. In addition, they can provide legal advice in case of any legal disputes and be able to guide the party in executing the partition or sale of any property in question.

Summary:

1. Understanding the pros and cons of shared ownership of property is extremely important.
2. As co-owners of a property, the parties have the right to use, possess, and dispose of the said property.
3. Any sale of shared/joint property has to be done with the consent of all the co-owners.
4. However, certain specific conditions in the agreement give co-owners exclusive rights to certain parts/portions of the property; a co-owner can then sell his portion to whomsoever they want.
5. Shared ownership of a property has its benefits. For proper guidance and assistance, one must consult a property lawyer.