Owning a property, as rewarding as it is, comes with its own set of headaches. Most people usually buy or rent a property in our country in collaboration with another or more people. Now there are various types of agreements that two or more people can enter into when they own a property together. The laws that govern property transfer differ slightly for different agreements, two of which are owners/tenants in common and joint property ownership.
Why should that bother you, you wonder? Lots of people in our country get swindled in property deals. Whether they are buyers or heirs, there is a high chance that someone might take an interest in their good fortune. It is no wonder that the majority of the pending cases that play a part in making our Indian Judicial system one of the most inefficient by reputation are property cases. Hence, you see most big families always have a property lawyer at their call.
This blog discusses the difference between two of the most common types of co-ownership agreements under which people share their rights to immovable property. Read on to understand the difference, so that you can have enough knowledge to call your property lawyers in Chandigarh if someone tries to take advantage of you over a piece of land.
Co Ownership Meaning
When two or more people own a property together, it is called co-ownership. These properties are called jointly-owned properties. These parties owning the property together could be business partners, friends, family, or another group of people having common interests. When the two people sharing co ownership of property are husband and wife, the marital version of joint ownership of assets applies.
Types of Co-ownership
There are 4 types of joint ownership or co-ownership of property in India, which differ mainly on the basis of co owned property rights. They have been listed below:
- Joint Tenancy
- Tenancy in Common
- Tenancy in Entirety
Joint Property Ownership
Also more commonly known as joint tenancy, this is a very attractive form of co-ownership, common among long-term partners. This type of ownership hinges on the unification of the parties’ unification of interests, rights, and responsibilities. Joint tenancy entails the right to survivorship, which means when one tenant dies, their rights go to the other tenants who survive.
It, however, requires a bunch of conditions, which we’ve listed below:
- A joint tenancy can only be created through a will or deed
- The joint tenants must have unified interest in the entirety of the property and not divided interests in separate parts
- The document that creates the joint tenancy must in clear language convey the intent to create an estate in joint tenancy
- The joint tenants must vest their interest at the same time
- Each joint tenant must have estates or shares of the same type and duration.
Tenancy in Entirety
This is a type of joint tenancy that requires the condition of marriage and as such is most common between husband and wife. The rights of the property transfer to the previous spouse in the event of the demise of the other. The joint ownership stands altered however if the spouses mutually file for an alteration or a divorce.
Tenants in Common
This type of co-ownership is the more common one. In a tenants-in-common agreement, all the co-owners have equal rights to use the property while they are alive, though they may have different shares in the property. However, the co-owners in this type of agreement do not get the right to survivorship. When one co-owner dies, his share goes to his heirs, not the other co-owner/s. That heir then becomes a co-owner with the surviving co-owner/s.
However, it is to be noted that the tenant in both these types of co-ownership is not to be confused with the tenant paying rent to a landlord, as that is governed by a different law than the co ownership property law.
Also Read: What is Rent Control Act of India?
Co-Owners Property Rights
Section 44 of the Transfer of Property Act lists three rights that a co-owner of a property might enjoy. These rights are listed below:
- Right to possession
- Right to use
- Right to dispose of the share
However, some of these rights may be restricted in some cases where the co-owners have previously agreed to the same. For example, the sale of shares of one co-owner may be subject to the consent of the other joint owners.
Why is Co-Tenancy the Default?
When a deed does not specifically state the shares of the partners or any instance of joint tenancy, then it is automatically assumed to be a tenancy in common. There are many advantages to this approach. This contract allows for any of the co-owner to transfer his/her share to a third party without hassle. Also, when a co-owner passes away, their share can pass equally to both their male and female heirs, who can also choose to sell those if they want.
While there are a few more kinds of property co-ownership in India, the two most common ones differ only in terms of the right to survivorship. While joint tenancy guarantees the right to survivorship to the co-owners, tenancy in common does not provide that right. Instead, it provides for the transfer of the right of ownership to the heirs of the deceased.
Lex Solution has some of the best property lawyers in Chandigarh, in case you might have been thinking of getting a property lawyer of your own, just to be on the safe side. Even if someone you know is tangled up in a property transfer case, with a basic understanding of the difference between two of the main types, you might be able to tell them if they need a lawyer.
1. What is meant by Coparcenary?
Coparenarcy is a form of ownership among members of Hindu Undivided Families (HUFs) which is governed by the Hindu Succession Act of 1956. This type of joint ownership allows the unborn child to have equal shares in a property owned by the HUF.
2. What is the advantage of jointly owning a property?
There are many advantages to owning a property jointly. The most obvious among them are cost-effectiveness and tax benefits in the case of a home loan.
3. What are the units that need to be shared by the co-owners in joint property ownership?
The four units that need to be shared by all the co-owners in joint property ownership are the units of time, possession, title, and interest.
4.Which unity is required to form tenants in common?
To form a tenant in a common agreement, only the unity of title is necessary.