How to deal with shared ownership of property

shared ownership of property

 My name is V K Patel, and I am a non-resident Indian (NRI). I co-own a property in India with my two relatives. I am planning to sell my share of the property. But I want to avoid any problem in transferring or taxation related to my share of assets. How can I deal with shared ownership of assets? How can I have a smooth division of property and protect the interests of all my co-owners? What do I need to do? Kindly explain.

There are two ways to deal with shared ownership of property – One can either sell his share to the other owners or divide the concerned property among the co-owners.

The act of dividing the jointly owned property among the co-owners in which each individual becomes the titleholder of his share and also requires transferring as well as surrendering the rights of that property is known as Partition of Property.

After the partition, each person becomes the independent owner his share and can deal with his share as per his choice. It is also required that each individual transfers and surrender his rights on other parts of the property.

A division of assets can take place

  • on a voluntary basis if all owners agree to it – With Mutual Consent or
  • with the help of law (filing a suit in court) if all owners doesn’t agree – Without Mutual Consent or
  • as the law deems fit

In the case where it’s Mutual – The partners who have shared ownership in property can execute a Deed of Partition with the terms as per the mutual understanding. It must be signed by the co-owners irrespective of the number of partners.

The share of the each owner may depend upon the share of their investment as disclosed in the purchase document. But if the amount of investment is not present in the purchase deed then the property is to be divided equally among the associates (as per the law.) Therefore, it’s not essential that the percentage of all the owners will be equal.

One has to remember to register the Deed of Partition at the office of the sub-registrar (where the property is located.)

shared ownership of land

In the case where it’s not Mutual – The partners who have shared ownership in property can file a suit in the appropriate court of law. For the easy process of division, it is must to have ownership papers, transfer papers and all other original documents related to the property.

The partition deed should be executed on a stamp paper and clearly state the share of each person explicitly with their names and should be registered with the sub-registrar office (where the property is located.)

In the case where the assets cannot be parted – The court takes action such cases. According to the court order, the concerned assets are sold, and then the proceedings from such action are distributed as per share of each person involved.

Point to keep in Mind – A Partition Deed is a lawfully binding instrument ensuring that the distribution of property takes place as per the law.

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