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LEGAL CHAT

Rights of co-owners are unrestricted

While tracing and verifying the title to an immovable property in the hands of the present owner i.e., the seller in a transaction, there can be co-ownership rights held by a group of persons in such property.

In the verification to be made about the correctness and completeness of the title in the hands of such co-owners, certain basic features, rights, interests and obligations under the law have to be studied and understood and they are highlighted below .

The terms “Ownership” and “Co-ownership” have not been defined in any of the central enactments such as the Transfer of Property Act, 1882, and the General Clauses Act, 1897, and hence they have to be understood from the basic concepts and principles of legal jurisprudence. Rights of absolute ownership in an immovable property means that all and every form of right and interest in relation to such immovable property is owned and held by a person who is the owner.

The rights are unrestricted in nature and unlimited on the point of duration.

When two of more persons jointly have such absolute ownership rights in an immovable property i.e., in a land, site, house, flat or an apartment with a right to common possession and enjoyment of such property, there is co-ownership in such immovable property and each of the persons is called a co-owner or also as a co-sharer.

This concept of co-ownership is used and applied in providing ownership rights in flats and apartments in high-rise buildings to the prospective buyers.

The share of a co-owner is a specified one, but at the same time it is held in an undivided state only.

To illustrate, in the case of a co-ownership of a land held by three persons jointly in equal ratio, then, each co-owner owns 1/3rd undivided share, interest or title in the entire property i.e., in each and every part and parcel of such property.

Under the law, co-ownership rights and share in the hands of a co-owner are both transferable and inheritable. In other words, a co-owner can independently transfer his co-ownership rights alone to another person and such transferee becomes a co-owner in the property fully succeeding to the place of transferor co-owner.

Similarly, any person can succeed to the co-ownership rights of an individual on the individual’s death (under laws of inheritance and succession).

Co-owner’s share and rights also can be separately mortgaged or any charge or security can be created on the same. The nature and extent of co-ownership share and rights in an immovable property to be acquired by an individual co-owner is to be clearly defined and specified in the legal document.

In the absence of any such specific reference, the nature and extent of an individual co-owner’s share and rights in an immovable property will be decided with reference to the provisions of Section 45 of the Transfer of Property Act, 1882.

The Section provides that the total price and consideration paid for the entire immovable property is to be ascertained first.

Then what is the financial contribution of each of the co-owner towards the total consideration is to be ascertained and in that proportion, the share of each co-owner is determined.

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