Property ownerships are of different types, and this article will guide you if you are wondering about those types.
Depending on the nature of the legal hold that an owner has over an immovable asset, there can be property ownership of numerous types. Sometimes it might be absolute ownership, while it may not be so in other cases. Depending on the number of individuals who own a specific immovable asset, there are different types of property ownership. We examine how the rights and obligations of the owners and joint owners are affected by each ownership category.
As the revolution in digitisation has given every owner clear and quick access to property ownership details, it is no longer a troublesome task in India to check property ownership details online. You can get the complete history of the parties involved in the transaction with just a finger click on your mouse, and this has reduced the defrauding practices which were predominant in the system.
Individual Ownership/ Sole Ownership of Property
Whenever an individual buys a property and registers it in their name, they alone hold the sole ownership of the property. Such types of property ownership are known as sole ownership or individual ownership of property.
It is crucial to keep in mind that if the sale deed is solely registered in the name of the principal buyer, even if other parties assisted the owner in securing financing for the property purchase, they do not have any right to the property. Below is an explanation of the same with an example.
Let’s say a buyer asked his wife for assistance setting up the down payment for a house purchase. Imagine that he adds his wife as a co-applicant for the mortgage. The property is finally recorded in the husband’s name, nevertheless. In such a situation, the ownership of the property still lies in the husband’s name. Although the wife has a right over the property according to the law, due to the country’s prevailing inheritance laws, it does not change the fact that the husband holds the property ownership title.
Benefits of Sole Property Title Holding
If you are considering sole property ownership, then these points will help you understand their benefits:
- According to the law, an individual will decide whether to sell the property or not.
- No other party’s consent would be necessary for the same. Due to the small number of owners, it is also simpler to divide such a property.
- When the owner passes away, his property will get distributed following his legal will. Certain inheritance laws would apply without a will, and the property will be distributed among the deceased owner’s legal heirs following those laws.
- Let’s discuss the above example; suppose the husband decides to sell his house; he is legally allowed to sell without his wife on board. He has the single-handed right to determine what he wants to do with his property. Although the wife has the right to claim her share in the sale, her consent for sale is not considered as far as the legal formalities are concerned.
Joint Ownership/Co-Ownership of Property
The immovable asset is under joint ownership whenever a property is registered in the name of more than one person. Those individuals holding the title to the property in such ownership are known as joint owners or co-owners of the immovable property.
It is crucial to remember that there is no difference between joint ownership and co-ownership of property under any law, and the two terms can be considered interchangeable. People can hold property jointly in multiple ways. These include:
Joint tenancy is one of the oldest types of property ownership. Each joint owner has an equal portion of the property, and the property’s title deed operates on the notion of unity.
Tenancy in Entirety
This form of joint ownership is the joint tenancy between married people. Married couples jointly hold the ownership of their property in this system. They will have to obtain the consent of the other if any of the two wants to make any modifications concerning their share. The surviving partner will completely own the property if any partners meet their demise.
Tenancy in common
Tenancy in common is the legal term for joint ownership when two or more people jointly own the property but do not have equal rights or claims over it.
The Hindu Succession Act of 1956 established the coparcenary form of ownership among members of Hindu Undivided Families because Hindu law does not permit distinct types of joint ownership (HUFs). An unborn kid is provided with an equal stake in a HUF property under this belief, which is somewhat corresponding to joint tenancy. If a property is owned jointly, each owner will influence how it is distributed or sold in the future. Therefore, if there are disagreements among the joint owners, the sale and distribution of it would become complex.
Property Ownership by Nomination
The process in which the property owner has the right to give his immovable property and assets to others after his death is called a nomination. Property nomination has also gained much popularity among landlords. In doing so, the landlord may guarantee that the property won’t go unclaimed or be the subject of legal action after his death.
This type of property ownership is usually seen in cooperative housing organisations, where members must select a person while obtaining a membership. The cooperative housing association will transfer the property ownership to the nominee if the owner passes away.
Although a nominee has possession of the property and got it transferred in his name, he does not acquire legal ownership of it. A Supreme Court verdict from 1983 states that a nominee is a "trustee of the property" and is responsible for transferring ownership to the deceased owner’s rightful heirs.
In 2009, the Bombay High Court stated that this nominee would only act as a trustee for the lawful heirs of the deceased owner and would not have any ownership rights over the property.
It implies that a nominee would not have the right to say anything in the distribution and sale of the property. Before entering into transactions, the buyers of property must confirm that the seller of the property is an actual owner of the property and not a nominee to avoid any legal complications in the future.
Rules Regarding Property Ownership by Nomination
Required Documentation and Procedure
Depending on the property’s location, the buyer must submit the documents to be registered regarding property ownership by nomination to the Sub-Registrar of Assurances.
Crucial documents are:
- Two authorised witnesses’ signatures must be present,
- The buyer’s and seller’s signatures
- Both the buyer and seller and witnesses need evidence of identity for the documents to be approved, like PAN cards, Aadhaar cards, and driver’s licenses, among other things.
The buyer must give all documentation to the sub-registrar, including the stamp duty receipt and the property card. After verification, it will be decided by the sub-registrar if the document can be registered or not.
Time Constraints and Payments to be Made
Within four months of executive, the requisite fees and the paperwork must be given to the sub-registrar. If there is a delay in presenting the documents, a delay condonation could be requested, and it must be completed within the following four months. If there is any failure to register your property, it will result in a critical situation, as in case there is a dispute for the property, you will have to evidence to present in the court trial.
Each state forms its rules, even though entire real estate is centralised. Only 13 states now have regulatory authority and the power to amend centrally issued legislation.
Real Estate Crisis and Conflicts
Homebuyers can resort to specialised real estate tribunals in every state if a problem arises. Over the past five years, this has efficiently accelerated the settlement process.
Penalties for the Late Realisation of Projects
Any delays in housing developments will lead to repercussions for the builder. The builder will be obliged to refund the entire sum or pay interest until the buyer receives the property. The interest rate will be 2% more than that charged by the SBI or State Bank of India on the total amount paid by the investor.
There are multiple types of property ownership to managing and holding the title to a piece of commercial real estate. Each category of the commercial property owner has its pros and cons, from tax advantages to liability traps, so it’s crucial to understand them all before you take on a new real estate asset.
It is highly recommended to speak with a lawyer who specialises in real estate and practices in the state where the property is based when attempting to purchase commercial property.
What do you need to know about property ownership in India?
There are different types of property ownership depending upon the nature of the legal hold that an owner has over an immovable asset. It may or may not be absolute ownership depending on the circumstances.
What are the three types of property ownership?
The three property ownership forms are individual ownership, joint ownership and ownership by nomination.
What is individual ownership of a property called?
The type of ownership in which a property is bought and registered in the name of one individual and holds the property's sole ownership title is known as sole ownership or individual ownership.
Is there any other option for individual ownership of a property?
While individual ownership may seem as simple as one can imagine, some variations can emerge when considering different forms of individual ownership.