Not everything is shared so easily – Especially not property!

shared ownership of property in India

The need for legally entering into a Partition suite arises when there has to be a distribution of shared ownership of property among the potential shareholders, whether they are family members and relatives.

A partition, by simple definition, is a division of assets owned collectively by either family members or relatives so that each person gets a share and becomes the owner of the share. The division is done as per the shares to which each of the members is authorized according to law. While undergoing the same, keep in mind the following aspects:

When shared ownership of property is in family members/relatives 

The partition can be performed by mutual consent or via court:

Property Dispute and Family Settlement

  • If division is opted by mutual consent, it is executed by the family/relatives themselves. It is to be noted that the act of division should be registered at the office of the sub-registrar of the place where the estate is located. More than one person may jointly own the assets.
  • The mode of partition is different when the division of shared ownership of property is not desired by all and only one or more of the members want the estate to be distributed. In such a scenario the suit is filed in the appropriate court of law. The deed must be executed on a stamp paper and drafted clearly and explicitly. The share of each person should also be mentioned specifically.

Explicit Partition Deed:

  • A partition deed makes new owners of the assets, and it should be listed at the sub registrar’s office to make it legal and obligatory.
  • The deed must mention the date from which the distribution is potent.
  • The names of the people of the family and relatives with their respective shares should be explicitly declared.

Distributed assets get a new ownership:

  • The shared ownership of property is distributed as decided and each share is subject to a new ownership.
  • Each shareholder gives up his/her interest in the property in favor of other shareholders.
  • Therefore, a division is an aggregate of surrender and transfer of individual rights in the estate.
  • The transferee can deal with the assets in any way he/she shall desire. It can be sold, transferred, exchanged, gifted, etc. by the individual just as an absolute owner would.

Inheritance law plays a significant role in the Partition of Asset:

  • Different rules can be applied for separation of belongings.
  • However, distribution of shared ownership of property is also subject to the laws of inheritance applicable to a particular person.

In this competitive world, everyone wants individual ownership of everything one owns. With increasing nuclear families, the trend of shared ownership is gradually disappearing. The distribution of any property, whether among co-owners or family members, can be done either by gaining mutual consent or by filing a case in an appropriate court. It is, however, preferred to solve such matters mutually without dragging the case to the court of law.

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.