There are different ways in which a person can own a specific property. Joint ownership of property is one such ways. The concept of joint ownership of property is governed by many different laws such as Contract Act’s, Sale of Property Acts and Transfer of Property Acts. The simple definition of a joint ownership of property is a property, whose title of ownership is held by more than one person. There are several different concepts that come into picture as a result of the joint ownership. Based upon the characteristics of this kind of ownership some important classifications have been made in the different joint ownership forms (Scholasticus, 2010).Types of Joint Ownership of Property
A joint ownership of property agreement and its content decides what type of ownership it is. The joint ownership of property is always within two or more than two legally legitimate people or parties. The following are some commonly observed types of ownership agreements. While going through the following categories, one must note that a tenancy is a synonym of ownership.
- Joint ownership with rights of survivorship: The joint ownership with rights of survivorship is an agreement, where more than one person hold ‘shares’, of the property. These shares are not divisible but a joint owner can rightfully and legally sell his ‘share’ to another party at a price higher than the earlier price, with the consent of others. With the death of a joint owner, the property automatically gets transferred to a heir, in accordance with the operation of law. However in the absence of a heir, the share automatically passes over to the surviving joint owners.
- Tenancy by entirety: A tenancy by entirety or ownership by entirety is a unique joint ownership of property. In such an ownership, a husband and wife own equal joint ownership of property rights and share of the property. In such a situation either is prohibited from selling the share. Joint ownership of property after divorce, thus often becomes a difficult situation and the court may intervene in case of a liquidation dispute.
- Tenants in common: The concept of tenants in common, is similar to that of a joint ownership with rights of survivorship. The difference is that the owner can sell his share to another person without the consent of other owners. Another differentiating point is that the owners can own unequal or non-homogeneous shares. The ownership can be passed on to an heir only by the way of a will.
- Community owned property: The concept of community owned property is different from that of normal ownership. A property becomes a community owned property, only when it is acquired through a marriage. The community property law, unfortunately is applicable only in 9 states, namely, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, and Washington. According to the terms of a community property, any property acquired before marriage or by inheritance, is considered and treated as a personal property. The community ownership is in most cases, applicable for people who purchase a property just after their marriage. Now, one might argue that a community property can also become a property under the provisions in entirety. A property becomes a community property on the signing of a contract between the joint owners. The advantage of such a property ownership is that the couple can have a house plan or an estate plan that becomes applicable in case of death of a particular spouse. An estate plan basically effectively and legally transfers the lien to the surviving spouse.
The best way to identify the type of joint ownership of property is to have a look at the terms of property transfer agreed at the time of real estate investment.
Reference
Scholasticus, K. (2010). Joint ownership of property. http://www.buzzle.com/articles/joint-ownership-of-property.html
