Transfer by co-owners

co-owners

When a property is owned by more than one person, such owners are called as co-owners. When one or more parties have ownership rights in a property, they are termed as co-owners. Co-owners possess all the rights of ownership in a property in proportion to their share. The co-owners have the right to use, right to dispose and right to possess the property. When a partition of a property takes place, the owners resulting from such partition are termed as co-owners. The term co-ownership includes joint tenancy, tenancy in common and tenancy by the entirety. [i]

Types of co-owners

Joint Tenancy-

Joint tenancy is a type of co-ownership where there are two or more owners of a property having an equal share in the property. On the death of one of the joint owners his or her interest automatically passes on to the remaining joint tenants who are alive as on that day.

Tenancy in common-

When two or more people jointly own a property but their share in the property is not defined, such individuals are said to be tenants in common. All the co-owners will have equal ownership rights in the property. However, on death of one of the owners, his share will pass to his legal heir or any individual as stated in his will and such an individual will then be the tenant in common with the surviving co-owners.

Tenancy by entirety-

This kind of co-ownership is exclusively for husband and wife. The owners of the property should be married for co-owning a property in entirety. A spouse cannot transfer his or her interest to a third party. He or she can transfer the interest only in favour of the other spouse. This kind of co-ownership will be put to an end if either party dies or on divorce or by mutual agreement between the two.[ii]

Transfer by Co-owners under Transfer of Property Act 1882

Section 44 of the Act lays down that if one co-owner of the immovable property transfers his share in the property, the transferee of such share acquires the rights of the transferor. That implies the transferee will be clothed with all the rights of the transferor. Such rights include the right to joint possession and the right to partition to the extent enjoyed by the transferor.

The right of transfer will apply to all transferees including mortgagee, lessee etc. However in case of a dwelling house belonging to an undivided family transferred by the transferee who is not a member of the family in that case he is not entitled to joint possession or other common or part enjoyment of the house. [iii]

 In the case of Durga v. Debidas,[iv] the family members were separated and living in different places. They stayed in that house for specific purposes. The Court held that using a property for a short period and for a specific purpose will not make it a dwelling house. Dwelling house is one where there is ancestral dwelling in existence and the family members should have not abandoned the house.

Principle involved

This section is based on the principle of subrogation and substitution where the transferee will be bestowed with all the rights of the transferor on the transfer of the immovable property. For example A, B and C mortgage their field to X. C subsequently transfers his share in the field to D. Under this circumstance, D will have the right to joint possession with A and B and also the right to claim partition however the share acquired by D will still be subject to the mortgage.

Transfer by co-owners of share in the common property

Section 47 states that when several co-owners of immovable property transfer a share in the immovable property without specifying the exact share or shares of the transferors, the transfer among such transferors take effect on such shares equally when the shares are equal. However, if the share in the property is unequal the transfer will take effect proportionately to the extent of the share. [v]

Illustration

A the owner of 80 units, B and C the owner of 40 units each in a property, transfer 20 units of share to D, without specifying from which of their shares the transfer is made. To that effect the transfer of a share shall be in proportion to their holding, that is 10 units from the share of A and half a unit from the share of B and C each.

In the case of Baldev Singh v. Darshani Dev,[vi] the Court held that the co-owner should be in actual physical possession of the immovable property to transfer a valid legal title of that property. If the co-owner is not in actual possession of the land then the transferee will be entitled to a share in the property or get a decree for joint possession or he can claim compensation from the co-owner.

Frequently Asked Questions

What are the rights of the co-owner?

The co-owner is entitled to the right to possession of the immovable property, right to use, right to dispose off and right to partition.

What are the requirements to create a joint tenancy?

Following four unities are essential for joint tenancy –

  • Unity of time, that is the interest in the property shall vest in the co-owners at the same time.
  • Unity of possession- the co-owners shall have an undivided interest in the entire property.
  • Unity of title- the interest vested in the co-owners shall be executed the same instrument.
  • Unity of interest- the co-owners should have interest in the same property at the same time.

Edited by Sakshi Agarwal

Approved & Published – Sakshi Raje

Reference

[i]Mohit Agrawal &Romit Agrawal, Transfer of Property By A Co-Owner Section 44 of Transfer of Property Act, Legal Service India

http://www.legalserviceindia.com/article/l125-Transfer-of-Property-by-Co-Owner.html

[ii]Makaaniq, what are the rights of the co-owners in a property, August 21,2013

https://www.makaan.com/iq/legal-taxes-laws/what-are-the-rights-of-the-coowner-of-a-property

[iii] Transfer of Property Act 1882, section 44

[iv]AIR 1974 Cal 14

[v] Transfer of Property Act 1882, section 47

[vi]AIR 1993 HP 141

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I am Dhruvi Dharia from University of Mumbai Law Academy (UMLA), pursuing B.B.A.-LL.B.(Hons.) I have a penchant for studying Corporate laws like Companies Act, Securities Law, Insolvency and Bankruptcy Code, mergers and acquisitions etc. and strong inclination towards numbers. I am also a budding Company Secretary and one level away from becoming one. I aspire to become a Corporate Lawyer in the future. I have always enjoyed reading and working on various legal matters whenever given a chance to. I constantly try to better myself by reading various Acts, articles, interviews of eminent lawyers and professionals and researching on various topics. I like reading on various contemporary legal issues and articles and I sometimes attempt writing on the same. Apart from academics in my free time I like drawing, painting and travelling to new destinations.