LAWS RELATED TO CO-OWNERSHIP OF JOINT PROPERTY

Introduction
When two or more people, such as a husband and wife, business partners, friends, or family members, hold title to the same property, this is referred to as co-ownership or joint ownership. All of the owners of a property are considered its co-owners. Any co-owner may transfer his or her personal interest in such property to another co-owner or even to a stranger, in which case the transferee will assume the co-owner’s duties. In most cases, a co-owner is entitled to possession, use, and even disposal of the property. For instance, Rakesh and Smita had a happy marriage until they decided to divorce. Rakesh hired a lawyer to handle his claim because he insisted on dividing everything, including their jointly owned house. After explaining all of the financial details to her, the lawyer was able to persuade ‘ignorant’ Smita that she had no stake in the house. As a result, if a co-owner is deprived of his property, he has the right to reclaim it. Such a co-owner has an interest in every part of the property and has the right, regardless of the amount of his share, to be in joint possession with others. This is also known as joint ownership. This article helps in understanding co-ownership and its types, the rights of a co-owner, legal provisions regarding the transfer of property, and whether co-ownership is better.

  1. Types of Co-ownerships

a) Tenants-in-common: Tenancy-in-common is the legal status that exists when two or more people jointly own a piece of property, but their respective interests are not expressly stated. Every co-owner has an equal share in the property, and all owners are permitted to use the entire property. The property is divided into separate fractional interests for each tenant-in-common. However, the entire property may be owned and used by each tenant-in-common. The interest in such property may be freely transferred by each tenant-in-common. Tenants-in-common do not have survivorship rights. The interest in the property does not pass to the other co-owners when one of the joint owners dies. The property is distributed to the person named in the deceased’s will. He is then a tenant-in-common with the remaining co-owners.

b) Joint Tenancy: It is a type of co-ownership in which two or more people own the property in equal shares. This type of tenancy gives co-owners who outlive other co-owners the right to ownership of the property. In contrast to tenants-in-common, when one joint tenant dies, his interest automatically passes to the other surviving joint tenant (s). Four legal requirements aid in the formation of a joint tenancy: Unity of time, possession, title, and interest require co-owners to take the same title at the same time, with the same deed, and with equal interests. If one unity is missing at any point during the joint tenancy, the type of co-ownership changes to tenancy in common.

c) Tenancy by Entirety: This type of co-ownership is only available to a husband and wife. The right of survivorship is provided by tenancy by entirety. Tenancy by entirety requires the two co-owners to be married in order to exist. Tenancy by the entirety does not permit one spouse to transfer his or her interest to a third party. However, one spouse may express his or her desire to the other spouse. Divorce, death, or mutual agreement by both spouses are the only ways to end a tenancy by entirety. When a tenancy by entirety is terminated, it becomes a tenancy-in-common.

2.1 Legal Provisions Available Regarding Transfer of Property by a Co-owner
It is critical to review the laws governing the transfer of property in order to understand one’s rights.


Section 44 of the Transfer of Property Act, 1882
Co-owner transfers are covered in Section 44 of the Transfer of Property Act of 1882, along with the rights of a transferee. Every joint or co-owner has a proprietary right to the entire property, according to the Act. In short, all co-owners must agree to any sale before it can be completed. A joint owner, however, is free to sell his or her share of the property to anyone he or she chooses unless there are specific terms in the agreement that grant co-owners exclusive rights to certain parts or portions of the property.
A transferee who accepts a transfer from another assumes the role of his transferor. He inherits all of the transferor’s rights and assumes all of the transferor’s liabilities. He becomes a co-owner in the same way that his transferor was before the transfer.
An exception to this rule states that a transferee who is a stranger cannot assert joint possession of a family dwelling house until and unless partition occurs.

2.2 Rights of a co-owner
A co-owner is entitled to three basic ownership rights:

  1. Right to possession
  2. Right to use
  3. Right to dispose of his share of the property if stated clearly in the deed

3. Judgments

In Konchunju Nair v. Koshy Alexander (1999), it was determined that if a co-owner wishes to erect a dwelling house on the land, he may do so. If co-ownership of property is divided, the co-owner can demand that the property be allotted to his share. Normally, the Court would grant such an equitable right.

A co-owner who is not in actual physical possession of a parcel of land cannot transfer a valid title to that portion of the property, the court ruled in Baldev Singh v. Darshani Devi (1993). The transferee’s options for redress include obtaining a share of the property divided after the partition, obtaining a decree of joint possession, or seek compensation from the co-owner.

The High Court of Madras ruled in Rukmini and others v. H.N T. Chettiar (1984), that a co-sharer cannot be allowed to cause prejudice to the other co-sharers by erecting a substantial structure during the pendency of a partition suit filed by the other co-sharers.

4. Is Co-ownership preferable?
1. Income tax benefit: Income from the sale or rental of the property can be split between the owners, which reduces the tax burden.

2. Representation: In the case of joint owners, agreements may be signed by either or both of them (with the necessary arrangements to do so), and either or both of the owners may handle all operations relating to bank accounts, society, statutory, and regulatory matters.

3. Legal Continuity: means that even if one owner passes away or becomes physically or mentally incapacitated, the others can still manage, use, and enjoy the property.
Joint or jointly-owned property is not without risk. Although later in life, people often want to add others’ names to the title of their property as a way of estate planning without paying attorney fees, this can increase the risk of embezzlement.

Conclusion
In most cases, a co-owner of a property is a member of the same family. Another method is for the Co-Owner to be named by a will that is made in his favor. Each Co-Owner may either have a share of the property in his name or equal rights to use it like the others. When there are more than two co-owners of a property and one of them passes away, the share he owned automatically passes to the other co-owners or his dependents. When co-owners transfer ownership, the transferee assumes the role of the transferor and receives all of the rights and obligations of the transferor. The transferee thus assumes the same degree of co-ownership that his transferor did prior to the transfer.

References

  1. Baldev Singh v. Smt. Darshani Devi and another AIR 141 (HP 1993)
  2. Kochukunju Nair v. Koshy Alexander (C. A. No 9725, 9726 of 1995)
  3. Rukmani And Ors. Vs. H.N. Thirumalai Chettiar AIR 283 (Mad 1985)
  4. See Jadhav Kakoti, Joint Ownership : All You Need to Know, Timesproperty.com (March 22, 2021) https://timesproperty.com/news/post/joint-ownership-all-you-need-to-know-blid702
  5. See Shaveta Dua, All You Need To Know About Co-ownership Of Property And Your Rights, makaan.com (Aug 26, 2016) https://www.makaan.com/iq/legal-taxes-laws/all-you-need-to-know-about-co-ownership-of-property-your-rights
  6. Ashish Gupta, Joint Ownership of Property, THE ECONOMIC TIMES (FEB.22,2009)
  7. Prince Raj , Transfer by Co-owner under the Transfer of Property Act: An Analysis, 4 (3) IJLMH Page 237 – 251 (2021), DOI: https://doij.org/10.10000/IJLMH.11440
  8. The Transfer of Property Act, 1882, Acts of Parliament, 1882 (India) s.44

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