An article about " Immovable property - Types of ownership "

Immovable property - Types of ownership

 

The ownership of an immovable property may be broadly classified into six types. The property may be owned by an individual company. Apart from this, the property may also be owned by two or more persons, jointly called co-owners. Co-ownership is of three types (1) Joint tenants (2) tenants-in-common (3) Co-parceners. The other type of ownership, are Benami Ownership, dual ownership, trustee and beneficiary, legal and equitable, ownership. We shall discuss each type:

(A) Joint ownership or Joint Tenancy

Joint ownership or tenancy is created by grant, device, dissersion. When a property is purchased by more than one person jointly and the deed does specify that the each purchaser has separate interest in the property, the ownership is called joint tenancy. The joint tenancy has four characters. Unity in title, unity in interest, unity in possession, and unity of time. Each owner has common interest in the property as a whole the interest of the each of the owners is similar in extent, nature and duration.

Similarly when the property is bequeathed jointly to more than one person, without specifying the each beneficiaries specific share, the owner-ship is jointtenancy and interest of each is similar in extent, nature, duration.

No simple owner has priority of title interest, right over others or separate interest right or title.

Acquiring the property under joint tenancy by dissersion more than one person enter into possession without title under such circumstances, the statures of limitations possession titled in joint tenancy unless the circumstances point to contrary.

In case of joint tenancy or joint ownership the property goes to the other co-ownership, survivorship and nor to the legal heirs of deceased co-owners. This concept of joint tenancy is basically a British Concept, but unknown in India except in cases of joint family property of undivided family governed by Mithakshara law. Law where the passes by survivorship. It is to be noted that transfer of property act does not provide for formation of joint tenancy. However Section 45 of the act states that When a property is purchased for consideration by more than one person and when the consideration is paid out of common fund, bequeathing to all, and when the terms of contract does not provide, how the property is to shared, right, title and interest of all the purchases is as that of what they are entitled to the common fund and in the absence of evidence of share of each in common fund all are presumed to be equal interest. The joint tenancy is in our country is an outcome of contract and nor a matter of law. As such if in case of joint purchasers, if the purchasers, wants to the property to held as joint tenants. Where thesuccession is by survivorship, a specific clause to that effect need to be added in the document. In the absence of such clause, the two courts may consider the title of tenancy in common. We may also refer to section 106 of succession act 1925, which recognises the joint tenancy. The section states that if an asset is given to two more pensions, jointly and if one of the beneficiaries dies before the testator will (one who makes the will), the other beneficiary takes the entire property. This section is applicable to Hindus also. Though this section prefers to only two beneficiaries, it has been held that reference to more than one person jointly means and includes not just two persons.

This mode of joint tenancy is of only temporary nature and ceases when one of the owner assigned his undivided share to a third party or when of the, owner contract to sell his share, by mutual agreement of all the owners by reverence of possession or partition, by notice by one or more owners to others or when the entire property vests with last surviving co-owner.

(B) Tenancy in common

This is different from joint tenancy or joint ownership. If joint ownership has four deciding parameters unity in interest, title, possession and time the tenancy is common has two characters, unity of tenancy where the owners do not have distinct share and own the property as a whole the tenancy in common, each owner has some specific undivided share in the property. This right, is passed to their legal heirs or beneficiaries under will and not to other tenants in common. Their share in the property is as per the terms of contract, or linked in their investment in property. In the absence of any evidence terms to share in the property is as per the terms contract, or linked to their investments in property. In the absence of any evidence terms to share in investments. All the owners have equal shares in the property.

(C) Hindu co-parceners

Hindu co-parceners is joint body of persons of Hindu undivided joint family. Each of the members are related to the head of the family within four degrees. The ownership of the property is like that of joint tenancy / ownership. Where each co-parcener do not have specific, distinct separate Share in the property, until partition is effected, on death of any co-parcener, the surviving co-parceners where is within four degrees to the hand of the family succeeds to the property as a member of co-parceners. Every member for in joint family, acquires the right in the family by birth.

(D) Benami Ownership

In Benami transaction, the persons who invests is different, and the person to whom property is transferred is different. The substance of the Benami transaction is that the consideration for transfer must flow from one person and transfer is taken in the name of another person and the consideration so paid for transfer of the property is nor a gift to the person to whose name the property is transferred. The Benami transaction prohibition act, 1988 completely prohibits the Benami transaction. The act has come into effect from 18th May 1988. Section 3(1) of the act provides that no person shall enter into a benami transaction, and succession 3 x 4 makes benami transaction, a criminal offence. Mainly exception is the purchase of property in the name of wife or unmarried daughter. However acquisition of the property in the name of the wife of co-parcener is benami transaction.

Section 4 of the act does not allow any legal action by the real owner to enforce his right against benamidar with some exceptions. When a person in whose name the property is held as a co-parcener is Hindu, undivided family which held for the benefit of such family and when a person who is holding the property is trustee Section 5 is more interesting. It provides that properties held in benami are subject to acquisition without compensation.

However, benami transactions made prior to the act are not illegal, but cannot be enforced as such by courts.

(E) Dual Ownership

In dual ownership the land belongs to one person and the structure on the land belongs to other person. Thus the property has two owners, one for the land and another for the structure. This type of dual ownership is very common where the owner of the Land ceases the Land to another with right to contract structures on the land and enjoy the fruits of such structures. The lease will be for certain specific period. The terms of the lease provide for as to how the ownership of the structure is to be determined after the expiry of the lease period. The ownership of structure may pass on the owner of the land or he may have pay certain amount to the lessee of the land to acquire the ownership of the building. Generally in most cases the lease will be renewed.

(F) Trustee and beneficiary

The trust in fact is another mode of dual ownership. There are two owners to the property in trust. Trustee and beneficiary. The trustee is the legal owner and the beneficiary is the beneficial owner. The ownership of trustee is of special type. Anyway he is not the absolute owner, and he has to abide by the terms and conditions of trust deed, and the author of the trust. He cannot exercise his rights for his benefit that for the benefit of the beneficiary.

(G) Legal and Equitable Ownership

In English law the ownership may of two types, legal ownership and equitable ownership. legal ownership has originated from common law and equitable ownership from principles of equity. but Indian law does not recognise the ownership by equity though certain equitable principles are recognised in India.