What is property ownership?

The legal notion of property ownership, also referred to as a property title, establishes a person’s or an organization’s rights to use, own, and transfer land or buildings. It stands for the formal acknowledgement of property ownership. A deed, which contains the owner’s name and particulars about the property, is typically used to record a property title. The owner has a number of rights under this title, including the ability to lease the property, transfer ownership, and profit from its use. In real estate transactions and while obtaining house loans, it is essential to make sure that property titles are unambiguous and uncontested.

Types of property ownership

There are three kinds of ownership:

• Individual ownership/sole ownership
• Joint-ownership/ Co-ownership
• Property ownership by nomination

Individual ownership/ sole ownership of property

When a property is purchased and registered in a single person’s name, that person is the only one with the property’s ownership title. This kind of property ownership is referred to as individual or solitary ownership. It is important to remember that if the sale document is only filed in the name of the major buyer, then even if other parties assisted the owner in raising money for the purchase, they still have no ownership rights. Below is an example that explains the same.

Let’s say a buyer has enlisted his wife’s assistance in securing the down payment for a house purchase. Suppose he adds his wife to the list of co-applicants for the house loan. In the end, nevertheless, the husband’s name is listed as the owner of the property. In this case, the husband would hold the property separately. Although it is true that the wife will have a legal claim to the property, this will not change the fact that the husband is the only owner of the land due to the nation’s strong inheritance rules.

Joint ownership/ co-ownership of property

An immovable asset is considered to be jointly owned when it is registered in the names of many people. Joint owners or co-owners of the immovable asset are those who possess the title to the property in such ownership. It is important to remember that under no law does joint ownership and co-ownership of property differ from one another; rather, the phrases are interchangeable. A property can be jointly owned in a number of ways. These consist of:

Joint tenancy

Joint tenancy is the term used to describe ownership when the property’s title deed gives each joint owner with an equal part of the property and operates on the principle of unity.

Tenancy in entirety

This type of joint ownership is simply a married couple’s shared tenancy. Married spouses jointly own their property under this method. The other’s approval would be required if any of the two wanted to make any modifications about their share. In this scenario, in the event that one partner passes away, the remaining partner will be the sole owner of the property.

Tenancy in common

Tenancy in common is the term used to describe a situation in which two or more people jointly own property without having equal rights.

Coparcenary

The Hindu Succession Act of 1956 established the coparcenary form of ownership among members of Hindu Undivided Families (HUFs) because Hindu law does not allow for many forms of joint ownership. Every coparcener is born with an interest in a coparcenary property. This idea gives an unborn kid an equal share in a HUF property and is somewhat equivalent to joint tenancy. Each owner will have a voice in how the property is divided or disposed of in the future if it is jointly held. Therefore, if disagreements emerge among the joint owners, the procedure of selling and distributing it would become complex.

Fractional ownership

Commercial property fractional ownership is growing in popularity. According to this approach, the fractional owners split the cost of a property into multiple shares. Usually, it’s a long-term investment with a predetermined lock-in time. Fractional owners have complete control over their assets and can choose which properties to invest in, unlike Real Estate Investment Trusts (REITs).

Property ownership by nomination

A property owner can designate someone to inherit his real estate and other assets in the case of his passing by using the nomination process. In order to prevent the property from becoming unclaimed or from being the subject of legal action after his death, property nomination has also become a popular practice among owners. Cooperative housing societies, which require members to designate someone at the time of membership, frequently exhibit this type of property ownership. The cooperative housing society then transfers the property ownership to the nominee in the event of the owner’s death.

However, because the property has been transferred in his name and he is in possession of it, a nominee does not actually become the property’s legal owner. A 1983 Supreme Court decision states that a nominee is a “trustee of the property” and is responsible for transferring it to the deceased owner’s heirs. A 2009 decision by the Bombay High Court stated that this nominee would not have any ownership rights over the property and would only act as a trustee on behalf of the late owner’s legitimate heirs.

This implies that a nominee would not be able to influence the property’s distribution or sale. Therefore, before making a purchase, buyers of real estate must confirm that the seller is the true owner and not a nominee to prevent future legal issues.