Are you considering joint property ownership? It’s crucial to recognize that the dynamics of co-ownership differ when purchasing a property with your spouse compared to acquiring it with a sibling. The realm of property co-ownership can be intricate, and understanding the various types is essential to steer clear of potential confusion in the future.
Four primary approaches exist for joint property ownership:
- Tenancy In Common: In this form of ownership, co-owners don’t explicitly specify their shares during the purchase. Referred to as tenants-in-common, all co-owners enjoy equal rights while alive. If a co-owner passes away, their share doesn’t automatically transfer to the surviving co-owner. The property distribution depends on the terms outlined in the deceased’s will.Example: Sita, Geeta, and Anita collectively invested in a property. After Sita’s demise, her adopted son, Anil, inherits her share as specified in her will and becomes a new tenant in common.
- Joint Tenancy: Joint tenancy requires all co-owners to simultaneously acquire the property through a single sale deed with equal interests. The right of survivorship applies, ensuring that in the event of a co-owner’s death, the property rights seamlessly pass on to the surviving tenant. Unless stated otherwise in property documents, ownership is legally perceived as tenancy in common.Example: Sita and Geeta, having explicitly stated joint tenancy in their property documents, ensure that if one co-owner passes away, the entire share transfers to the surviving tenant.
- Tenancy In Entirety: Exclusive to legally married individuals, tenancy in entirety involves simultaneous property acquisition with equal interests. Similar to joint tenancy, the right of survivorship applies. Selling the property requires mutual agreement, and the tenancy in entirety dissolves in case of divorce, death, or mutual agreement.Example: After marrying Geeta, Ram acquires property, and they become tenants in entirety. In the event of Ram’s death, his share automatically transfers to Geeta. A divorce would transform the ownership contract into tenancy in common.
- Coparcenary: Applicable in Hindu Undivided family structures, coparcenary is akin to joint tenancy. It allows even unborn children to have an equal share in the family property. Upon birth, a coparcener gains joint ownership, and in case of death, their undivided share passes to their heirs.Example: Expecting a child, spouses Ram and Geeta incorporate the unborn child’s right to the ancestral property. If Ram passes away, the child inherits his undivided share in the property.