Due to rising property prices in the country, it is becoming increasingly difficult for a medium-sized buyer to buy a home in a good location. As a solution to this growing prohibitivity, a number of home buyers are looking to co-own real estate. It may seem easy to simply share your financial burden, but you should know that there are several types of shared ownership of real estate in India, as well as several legal aspects. So let`s talk about it in detail. The Hindu Succession Act of 1956 establishes the co-park form of ownership between members of Hindu undivided families (HUF). This concept, which is similar to roommates, allows an unborn child to have an equal share in a HUF property. After its birth, a Coparcener becomes a shareholder of the assets jointly held by HUF. An important feature that distinguishes joint rental is that there is no concept of “survival” as in joint rental. In other words, if one of the co-owners dies, the property does not automatically pass to the remaining survivors. Rather, it is passed on to the heirs or successors of the deceased. It is important to note that ownership of the property does not need to be acquired by all co-owners at the same time. Each co-owner holds a 25% stake in this property (unit of interest).
Finally, it is advisable to carefully read the deed of sale or the purchase contract. If a legal term or legal clause is unclear, it is best to consult a lawyer. It is a fact that the mere mention of roommates or tenants in common in the purchase contract at the time of execution does not arouse suspicion. At the same time, a study of its implications will make you think twice before signing. Real estate co-ownership is very common in India, especially with a spouse. Personally, I do not offer co-ownership with parents due to inheritance and other issues/problems. With the increase in marital and family conflicts, co-ownership sometimes becomes a major pain point. In happy moments, we don`t think about future effects. If the potential buyer learns of a dispute between co-owners, it can be difficult to dispose of the property. Such sales are in trouble, as I shared in my post, Beware of heavily discounted real estate. For example, A and B can be roommates with an equal share for two years, after which they agree to add C to the property.
Now, A and B can decide to own 25% of the property, while C can own 50% of the property. The share of each co-owner is therefore different. Section 44 of the Transfer of Ownership Act 1882 provides for the transfer of a co-owner`s shareholding and rights. The above type of co-ownership must also operate in accordance with religion-specific laws to have legal validity. This is where the concept of co-park comes into play, which is provided for in the Hindu Inheritance Act. There are mainly two types of co-ownership, namely shared accommodation and joint tenancy. 1. The biggest question now is, if the common ownership is not mentioned in the purchase contract or deed of sale, what will happen then.
As I understood by default, the type of shared ownership is Tenants in Common. In other words, the share of the property is passed on to the legal heirs or beneficiary of the WILL. When buying a common property, it is very important to ensure that the exact form of the property and the conditions between them are known in order to avoid disputes over property claims in the future. Inheritance rights under different religions are a very important consideration for co-ownership of property in India. For example, the Hindu Succession Act of 1956 provides for a form of co-separation of property between family members. In such scenarios, the conditions of common ownership are read in accordance with religious inheritance laws. Now, you must be wondering what this article is about. This post is dedicated to the biggest dispute, that is to say when one of the co-owners or co-owners dies.
In the recent past, I have received only a few requests in this regard. In my opinion, it is very important to mention the type of co-ownership in case the co-owners are not relative. Here, I want to clarify that by non-relatively unprivileged (no legal inheritance), I mean. Condominium can be a good option for you if you are struggling to afford ownership completely on your own. This is especially good for spouses, as the government has also given women some discounts in terms of buying real estate. It could also be a good choice for buying a commercial property in India, as trading partners may have equal rights to the property or as stated in the agreement. If you want to buy a property together, you can get the full support of Geetanjali Homestate in this regard. Our experts will guide you every step of the way. Since the concept of co-park does not affect survival, a member`s undivided share of ownership passes to his heirs and not to other co-parkers at the time of death. A COPArcener of a HUF can also sell his share of the common family property. I have observed that in a professionally drafted deed of sale or a purchase contract, the nature of the common ownership is mentioned. It should also be added that this clause is more decisive in the event of the death of one of the co-owners.
There are the following 2 types of shared ownership There is no right or wrong answer as to whether I should mention roommates or tenants in common in the deed of sale or in the purchase contract. It is situational in nature. It depends on how I want to inherit my share of the common property. The laws in India are somewhat complex in nature. Even a reference to the nature of the common good may be challenged by the injured party. For example, in the case of joint tenants, the surviving co-owner may contest the transfer to legal heirs, indicating the source of the funds. If two or more people jointly own a property, but the other three forms of unit are not applied, then this is called colocation. Colocation also doesn`t work with the concept of survival.
Only the unity of title is visible in this arrangement, while the unity of possession, time and interest may not be present. Since the concept of survival does not work, each tenant can jointly transfer their interest in the property. An agreement in which two or more people agree to own property together is called a “co-ownership agreement.” This can be done for various reasons, e.B convenience in transactions, inheritance preferences, tax benefits, etc. There are different types of co-ownership contracts, each of which sets and regulates the conditions of co-ownership. Colocation, on the other hand, is characterized by the characteristics of “unit of title”, “unit of time”, “unit of interest” and “unit of ownership”, which means that owners acquire the same and the same title deed at the same time on the basis of the same title deed. Co-tenant: With this type, the share is automatically passed on to the surviving co-owner. As I shared in the examples above, the ownership share is passed on to the surviving co-owner. Tenants in common: The interest of the tenant or deceased co-owner passes to the legal heirs and not to the surviving tenant or co-owner. For example, if I buy a joint property with my brother-in-law, he is also technically treated as a non-parent because he is not a direct beneficiary of my assets under the Hindu Inheritance Act. In such scenarios, the nature of the co-ownership may replace the WILL of the deceased. Suppose I die and leave a will that my share of the commons will be inherited from my wife.
At the same time, it is assumed that the type of common property mentioned in the deed of sale is roommate (I will explain what this means later). In this scenario, my share of the property is passed on to my brother-in-law (surviving co-owner) instead of my wife. With this type of co-ownership, the share of each co-owner is not determined at the time of purchase of the property. By default, they have the same rights to the property. However, in the event of the death of one of the co-owners, his rights are not automatically transferred to the surviving owners. The division of property is based on what is mentioned in the will of the deceased owner. For example, if Shreya and Shweta purchased property under the joint tenancy and Shreya`s will mentions that her share of the property should be passed on to her son Utkarsh, the property rights will be transferred to Utkarsh after Shreya`s death. An important point to keep in mind here is that if the nature of the co-ownership is not explicitly mentioned in the agreement, it will be considered a colocation by default.
4. For joint tenants, provided that there are 2 co-owners (non-parents). One of them dies and there are 2 legal heirs of the deceased. In this case, the share of the surviving co-owner remains at 50% even after the death of the co-owner. The legal heirs each receive a 25% share. Here I guess everyone has the same share of the property. A flatshare is one if the title deed of the property is based on the concept of unity by granting them an equal share of a property. The main determinants of unity in this form of co-ownership are the unity of title, the unity of time, the unity of interests and the unity of possession. .