Co-owners shares should be specified in sale deed


Property can be bought and owned jointly by more than one person. There are some legal and financial implications in such a case that need to be taken care of so as to avoid disputes.

One of the most common reasons for owning property jointly is financial. People pool in funds to buy a property.

A common example of this is purchase of property by husband and wife. By clubbing their incomes, they are also eligible for a higher loan amount. The couple having separate sources of income may pool in their resources to buy a home.

When two or more people buy a property but do not specifically mention the share that each has in the property, a ‘tenancy-in-common’ is created. All the coowners can use the entire property and every co-owner is deemed to be having an equal share in it. After the death of one of the co-owners, the interest in the house does not pass on to the other co-owners but to the legal heir or a person named in the Will of the deceased, who will then become a ‘tenant-in-common’ with the surviving co-owners.

In case the property is owned by two or more persons in equal shares, it is referred to as a joint tenancy. In case one of the joint tenants expires, his interest automatically passes on to the surviving joint tenant(s).

In case a property is jointly owned by two or more persons, the fact should be specifically mentioned in the sale deed. A property can be acquired by two or more persons jointly by pooling in their resources. Unless there is a contract to the contrary between the parties, co-owners will have a share in the property that is proportionate to the funds contributed by them to buy it.

The names of the co-owners, along with their respective shares of joint ownership or the ownership in the property should be clearly and specifically mentioned. As such, in case of any income from the property or any gains received on the transfer of such a property, the returns can be divided in the respective proportions of ownership.

Under the Transfer of Property Act, every joint or co-owner has a proprietary right of the entire property. Accordingly, a sale has to be with the consent of all coowners involved. Only in certain cases, the co-owners get exclusive rights to certain parts of the property, which one can transfer. In case of a house, consent has to be sought from all co-owners owning the house.

A co-owner is entitled to right of possession, use and to dispose off his share in the property if it is clearly stated in the deed. In case a co-owner is deprived of his property, he has a right to be put back in possession.

It is to be noted that mere co-ownership of property without reference to any specified extent would imply that the co-owners have equal interests in the property. For any specific, pre-agreed shares, the details have to specifically be mentioned in the property documents. The sale deed can specify the shares of the coowners – the proportion of ownership among the individuals.

In case one wishes to add a co-owner at a later stage he can execute a sale deed. He can sell a portion of the property to the other person and then get the sale deed registered as a co-owner of the property by paying the necessary charges. This will entail payment of stamp duty.

Alternatively, one can execute a gift deed. He will need to make a gift deed and get it executed on a stamp paper, and register it at the registrar’s office.

In case of co-ownership, transfer of property is easy as if one of the partners die. The surviving spouse then becomes the sole owner of the house.

Tax benefits

Both the owners can claim tax benefits. Both can claim deductions of up to Rs 1.50 lakh against the interest paid on the home loan. They can also claim tax benefits of up to Rs 1 lakh against the principal amount repaid under Section 80C.

If the property is sold, the co-owners will have to pay tax on the capital gains earned by them. Section 54F of the Income Tax Act provides that if a taxpayer invests the sale proceeds received from the sale of any capital asset in buying a residential property, the long-term capital gains on sale of the property will be exempt. In order to claim this exemption, the house should be purchased by the taxpayer. However, it does not stipulate that the house should be purchased in the name of the taxpayer only. Including the spouse’s name as co-owner will not impact the exemption granted by the Act.

Source: Times Property, The Times of India, Bangalore

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Chennai Real Estate Trends – 2012


The Chennai market has been volatile in the last three quarters.The recent budget will have its impact on pricing due to the increase in the service taxes from 10.3% to 12%. The increase in excise duty across the product categories has led to an increase in the initial input cost, directly impacting the selling price in the market.

The good news, amidst the negative impact of the tax hike is that affordable housing has found its takers due to the increase in the number of people opting for homes in the affordable segment and the National Housing Board in-turn addressing the consumer challenges by promoting the affordable housing segment. The NHB has allotted 5000 crores to promote affordable housing and hence all the Housing and Finance Corporations across the country has lowered the tax rates for homes that come under the affordable housing slot.

This report will analyze the latest real estate trends in the Chennai Market for the last three quarters. Here we go:

Budget & Sq. feet:

In Chennai, Q3 saw a dip in buyer’s budget preferences. But in Q4, the demand has gone up considerably with home loan rates forecasted to go down and inflation coming under control. The budget preferences of the buyers have gone up by about 10% whereas the avg. sq. feet preferences has seen a 12% drop compared to Q2 figures indicating a clear movement towards smaller SKUs. One reason could be that the buyers are going for premium amenities and branded builders even if that means they have to shell out more.

BHK precedes Sq. feet:

The chart below gives a snapshot of the BHK preferences of property seekers in Chennai. An interesting trend emerging from the analysis is that though consumers’ average sq. feet preferences have come down distinctly, there has been a shift in preference from 2 BHK to 3 BHK units over the past 3 quarters. The trend indicates that the average buyer gives more importance to the BHK specifications of a property than the sq. feet specifications.

Hypothetically, a prospective buyer in Chennai is more likely to choose a 3 BHK/1000 sq. feet flat over a 2 BHK/1200 sq. feet available for the same price.

Locality preferences:

Property seekers were given the flexibility to choose up to 3 localities in a particular city in their order of preference and each locality was rated. The overall (Last 3 quarters) locality preference chart indicates how each locality fared. The Tambaram & GST belt emerge to be the hot zones in Chennai that are in great demand. Apart from its proximity to IT parks & good connectivity, the re-emergence of this region as a viable investment option is due to planned infrastructure projects like satellite city, airport and mono-rail in the pipeline.

Mood in the Market:

The Q3 of 2011-12 was a difficult period with the demand/urge to buy a property remaining weak in most markets due to higher interest rates, inflation and forecasts of a glooming recession. This reflects in the purchase intention of the buyers as well. The percentage of buyers that intended to buy a property within the next 4 months went down in Q3. More buyers decided to wait and watch the market and postpone their buying decision in Q3.

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Article Source:INDIA PROPERTY

7 factors that propel home buyers to invest in Tier 2 and Tier 3 cities


These days Tier 2 and 3 cities are viewed as excellent investment option as the property prices in metros are soaring. Within Tier 2 and 3, most Metro city dwellers feel it is a good option to buy a property in nearby vicinity to the city rather than in a completely new city and with high property prices. Here are 7 factors that propel home buyers to invest in Tier 2 and 3 cities.

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1. Cost effective alternative to metros: Tier 2 and 3 cities are a better alternative as house rent, transportation, education, and many necessities are more cost effective compared to the expensive metros.

2. Second homes: Many buyers are buying homes in tier 2 and tier 3 cities as second homes to support their parents. Old generation often find it hard to catch up with the pace of metros. They often feel insecure and secluded. Tier 2 and 3 provide a comparatively hassle free life.

3. Retirement planning: With increasing awareness about personal finance and planning, people have started thinking of planning early for their retirement. Many prefer to spend their retirement in a place they grew up in their native place.

4. Appreciation in land rates: Land available in these cities is affordable now and expected to rise in the near future with rapid urbanization.

5. Better Connectivity: Most Tier II and Tier III cities are better connected today making them much more accessible. City like Amritsar has an international airport thus assuring a steady flow of tourists and pilgrims.

6. Better Standard of Living: With all the world class facilities now available in well developed townships and distances within the city much smaller than metros, Tier 2 and Tier 3 cities offer stress free life.

7. NRI Investing: Integrated township construction with a bungalow spread across acres of land is the most popular choice of investors in these cities. It is also a way for them to connect with their roots.

Source:makkan