Buying a property in joint ownership can be really beneficial in terms of sharing investment cost, but often people hesitate to buy a joint property owing to their apprehensions about legal complexities. Joint Ownership Agreement is a solution for all such doubts. To understand Joint Ownership Agreement, first, let’s have a clear idea of joint ownership. When a property is jointly purchased by two or more owners, then it is known as joint ownership. Joint Ownership can be between spouse, family members, business partners or even friends. And the document which certifies that a property is jointly owned with the details of property and owners is called Joint Ownership Agreement.
To have a more clear idea on Joint Ownership Agreement, let’s understand the types of joint ownership.
Joint Tenancy with Rights of Survivorship
In this type of ownership, one joint owner gets the full ownership of the property in any the other partner dies. Both the joint tenants own an undivided interest in the property that they have purchased and both of them have the full right to rent, possess, occupy, or use the property. Upon the death of any one owner, the other owner directly gets the complete ownership without going through any type of probate.
This type of joint ownership is authorized by the government of a few Indian states only. While buying property in India, married couples get extra protection in tenancy-by-entirety type of joint ownership. In this ownership, any of the partners, whether husband or wife, cannot transfer, deal in, or mortgage the property without the other partner’s consent. In case any of the spouses dies, the ownership gets directly transferred to the other partner.
When someone buys their property in the ownership type of tenancy-in-common, the ownership of the property gets passed on to the respective heirs listed in the will in case of death of any one owner. This happens when two or more individuals decide to own a property together but still have separate titles to the property. In fact, the owners in this type of joint ownership, can also decide whether they want the same percentage of ownership for each owner or divide it individually.
In case of community property ownership, the property, whether owned by the husband or the wife, is equally owned by both the partners. In fact, community property even goes out to state that the salary owned by any of the two spouses is also owned by each of the spouses equally.
Things To Keep In Mind While Entering A Joint Ownership Agreement
Before entering a joint ownership agreement, both the parties need to take legal counsel to ensure a smooth and hassle-free ownership procedure. There are a number of other things that individuals must keep in mind while entering into a joint ownership agreement.
- Get everything in writing to record the intentions of the partners
- Decide on the price and payment method beforehand
- Read the document carefully and verify any legal term that you do not understand
- Ensure who among the partners would be responsible for the management of property and the expenses incurred in maintenance
- Discuss the effective terms of dispute resolution, if any arises after the joint ownership
- Note down the period of the ownership. Also, note till what time the ownership would remain valid
- Discuss the exit strategies beforehand so that any of the owners do not face any hassle while exiting from the joint ownership agreement.
These are some of the main things that one should know about joint ownership agreement. It is important to know everything about joint ownership before buying property in India and entering into any joint ownership agreement to ensure that you do not get into any legal hassle or other dispute once the agreement has been made.