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What Are The Different Types of Property Ownership?

Author
Blox Social
Posted on
Feb 8, 2023
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Owning a property, real estate, apartment, house, or flat is an aspiration most of us cherish. 

Property ownership is a legal concept that defines the rights and responsibilities of owning, using, and disposing of property. However, not all property ownership is the same, and several types of property ownership exist. It is essential for individuals looking to buy or inherit property, as well as for real estate investors, to know the different types of property ownership deemed legal in India.

Each type of ownership has its unique characteristics, and understanding these differences is crucial for making informed decisions about your property. Let’s delve into each type of ownership in detail and explore the legal implications associated with each type.

Individual ownership

Single ownership or sole ownership refers to a situation when one individual buys or inherits a property, and it is registered in the name of this individual. In such a case, this single owner has complete ownership rights over the property and can sell, mortgage, lease, gift, or will it according to their wishes. Even if other parties may have assisted in the procurement of funds or assisted in the buying process, the legal right of the asset rests with the individual on record. Let us understand this with an example. If a father helps his son by lending him funds to buy a property or by helping him locate and purchase the real estate, the son whose name is registered as the owner has complete legal control over the property, not the father. When a sole owner dies intestate, the relevant laws of inheritance determine who comes to own the property next.

Joint ownership

Joint ownership is when several individuals jointly own a property or immovable asset. Joint ownership or co-ownership of a property can be complicated, and each individual may have limited rights over the property. Let us take a look at some of the common forms of joint ownership.

  • Coparcenary - Coparcenary is by far the most common form of joint ownership in India. Coparceners are those who have claims on ancestral properties. For example, in a Hindu Undivided Family (HUF), three generations have a claim on the ancestral property by virtue of birth. This property cannot be sold, mortgaged, or leased by any one individual as it is jointly owned and claimed by all three generations.
  • Joint tenancy - Joint tenancy is when all the co-owners are deemed to have equal interest and legal rights in the property. The sale deed mentions all the owners as co-owners or joint owners. In case of the death of one co-owner, the surviving tenant gains the rights over the property. In such cases, the property documents must specifically mention "joint tenancy". If not, the property is assumed to be a tenancy in common.
  • Tenancy in common - Tenancy in common refers to joint ownership of a property or immovable asset in which two or more persons jointly gain legal rights. While they jointly own a property, the rights of all co-owners may not be equal, and the sharing scheme is stipulated in the property documents. The individuals holding the property also do not have any rights of survivorship. This means that if one of the owners dies, the interest of that person's share passes on to his/her legal heir and not the other co-owners.
  • Tenancy in its entirety - When the two owners of a property are married to each other, they can opt for tenancy in its entirety as the ownership protocol. They both jointly own the property and have equal interests. Any change in this status or sharing arrangement requires the other's permission. On the death of one of the co-owners, the surviving spouse gains full control of the property.
  • Fractional ownership - Fractional ownership of commercial properties has been gaining popularity in the country. It allows the cost of the property to be divided into several fractions and distributed among the fractional owners. This is usually a long-term investment and has a specified lock-in period. Unlike REITs, however, fractional owners can choose to invest in certain properties and have full control over their investments.

Ownership by proxy

Property ownership by proxy or nomination is a process whereby a property owner gives another person the right to hold the property in case of the owner's death. The nominee or proxy, in this case, does not gain legal ownership but holds the title of the property so that it does not go unclaimed or become the subject of litigation. In most cooperative societies, the property owner needs to name a proxy who can act as a trustee of the property on the owner's death till such time it can be handed to the legal heirs. This is ownership by proxy. It is a temporary right to bear the property title but does not give the nominee the right to sell, mortgage, gift, or will the property.

We at Blox offer a customer-centric online platform that provides end-to-end support to homebuyers. We bring you direct listings of RERA-registered properties from verified developers and builders with a track record of delivering high-quality projects on time. Our digital platform makes it possible to buy your dream property in seven clicks. You can contact your Blox relationship manager if you plan to buy a property jointly with your spouse or a co-owner. 

Real Estate