Laws related to co-ownership of a joint property

What does Co-ownership of property mean?

Co-ownership or joint ownership means when two or more persons hold title to the same property.

What are the types of co-ownership?

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.

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.

Tenancy by entirety: This is a special form of joint tenancy when the joint tenants are namely the husband and wife -- with each owning one-half.

What are laws related to 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 a 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.

 
What are the 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.

Why is co-ownership better?

If you are a married couple, co-owning a house it with your spouse has many benefits. Both can get tax benefits. In case of a joint ownership, the husband, as well as the wife individually, will be able to claim deductions under Section 24 of the Income Tax Act. Deduction available for each individual is 1.5 lakh for principal u/s 80C and 2 lakhs for interest component u/s 24(B).