Property ownership is a significant milestone and a key aspect of financial security for many individuals. Understanding the types of ownership, the rules governing property rights, and expert guidance are essential for a smooth transition into property or house ownership.

This article will explore the different aspects of property ownership, property titles, and how home loans can ease your way to house ownership. Knowing these can help you to make informed decisions in acquiring your piece of real estate.

What is Property Ownership or Property Title?

Property ownership, often referred to as a property title, is a legal term that denotes the rights of an individual or entity to possess, use, and dispose of land or buildings. It is the official recognition of who owns a piece of property. A property title is typically documented through a deed, which records the owner's name and the property's details. This title grants the holder various rights, including the ability to transfer the ownership, lease it to others, or access any benefits arising from the property. Ensuring clear and undisputed property titles is essential when buying or selling real estate and securing home loans.

Types of Property Ownership

1. Individual ownership: This is when a property is owned by one person in their name.
2. Co-ownership: Property is owned by 2 or more individuals together.
3. Joint tenancy: Co-owners have equal shares, with the right of survivorship. This means that if one owner dies, their ownership will transfer to the remaining owner(s) without probate. Probate is a court process that deals with the assets and debts of the deceased.
4. Tenancy in entirety: Similar to joint tenancy but only available to married couples.
5. Tenancy in common: Co-owners can have unequal shares, and there is no right of survivorship.
6. Property ownership by nomination: In case of demise, the property is transferred to a nominee.
7. Coparcenary: An ownership form that allows family members to have a share in a property that is part of a joint family property.

All types of property ownership have different implications for rights of transfer, inheritance, and sale. It is important to choose the right type of ownership based on individual circumstances and objectives.

Must Read - Lease vs. Rent: Why Owning Your Home is the Ultimate Investment

Property Ownership by Nomination

Nomination allows a property owner to designate someone to inherit their assets, including immovable property, upon their demise. This method ensures that the property is not unclaimed or entangled in legal disputes post-demise. Particularly common in cooperative housing societies, members must nominate a beneficiary when acquiring membership. The cooperative society then transfers the property to the nominee after the owner's death.

Yet, despite the transfer, the nominee does not gain legal ownership. Per the Supreme Court's decision in 1983 and a Bombay High Court ruling in 2009, the nominee acts as a trustee, representing the legal heir(s) without ownership rights. They cannot engage in any sale or division of the property but are responsible for managing it until handing the property to the legal heir(s). Therefore, property buyers must confirm the seller's actual ownership, not just nominee status, to prevent future legal issues.

Property Ownership: Rules and regulations

• Indian Contract Act, 1872: Overseas contract formulation, execution, and the rights and remedies in case of breach, including contracts involving land.
• Transfer of Property Act, 1882: Regulates the processes of selling, leasing, exchanging, mortgaging, and gifting both immovable and movable property.
• Indian Stamp Act, 1899: Advises stamp duty payments and registration processes for various legal documents.
• Indian Registration Act, 1908: Mandates the registration of all property transactions over Rs. 100 in India to confirm ownership and prevent fraud.
• Real Estate Regulation & Development Act (RERA) 2016: Aims at consumer protection, overseeing the real estate industry’s marketing and development activities, and requires registration of real estate projects.
• FEMA and FDI Policy, 1999: Protects foreign investment by managing the purchase and sale of property by non-Indian residents.

Must Read - Complete Guide About RERA Act and What Are The Rules

How Do Home Loans Facilitate Property Ownership?

A home loan acts as a bridge between the high upfront cost of the property and a buyer’s ability to afford it. As purchasing homes is generally very expensive, home loans can help a larger part of the population realise their dream of home ownership. Some lenders offer home loans up to 90% of the property’s market value, which can be paid back over a period of up to 30 years* with interest. If the borrower cannot pay back the loan in its entirety, the lender may take legal possession of the property. Therefore, it is important to carefully assess different lenders and choose the one that offers the most favourable terms.

Conclusion

Understanding what goes behind property ownership, the different types, and the associated rules will help smooth your way to owning a house. Having expert guidance will further help your cause.

Home loans can be a stepping stone for achieving your goal of house ownership. SMFG Grihashakti offers customized home loan options to suit your needs. We offer loans of up to INR 1 crore* – up to 90% of the property value. Apply online for a quick and hassle-free process or visit your nearest branch to see how we can help you realise your dream. Before applying, check the documents required for a home loan and make sure you have all of them ready for a faster process.