Significance of adding a co-owner to your property
When you buy a property, you have full ownership of it. But at times, one can wish to partially gift or sell their real estate. Property owners have the liberty to grant co-ownership of their apartments, houses, and flats at any point in their lives.
There are various reasons why a property co-owner is assigned by a certain individual, but the most common one is to avoid the conflict that may occur during the distribution of the will after the death of the property owner.
Always remember that a verbal agreement isn’t enough when it comes to assigning a property co-owner to your real estate. At the same time, you can’t randomly decide that you want a property co-owner. If your existing deed has your children’s names then interest would be created for their benefit. After this, they won’t automatically inherit your real estate property and your ownership interest would be at stake.
An owner will have to create a new deed altogether to add a property co-owner to his real estate. It is imperative to register the new deed at the sub-registrar’s office in order to make it valid under the Transfer of Property Act.
Types of deeds for transferring partial property rights
A new sale deed must be created here and it takes the form of a typical sale. The sale deed should mention the portion of the property being transferred to the co-owner. This deed, like all other deeds, should be registered at the sub-registrar’s office. Registration charges and stamp duty charges will be charged.
Gift deed
A person can assign a property co-owner by gifting a portion of the real estate asset to the concerned person. In such cases, a deed of the gift must be registered at the sub-registrar’s office. Registration charges and stamp duty charges will be charged.
Clarity of title
It is essential to clarify the title you and your property co-owner would share. A joint tenancy with a right of survivorship would be apt if you want to share the ownership equally. If one person dies, the ownership would be transferred to the other. But if there is a case of unequal ownership, it would be a tenancy in common.
Adding a co-owner on home loans
The bank will have to be informed if the owner is still paying a home loan for the property that he wishes to partially sell or gift. The bank will have to create a new home loan agreement to add a property co-owner. All of this must be registered and the stamp duty charges must be paid.
The bank would insist on making the property co-owner a co-borrower in the home loan that is applicable. The bank will do a credit check of the new party by following its standard procedures. According to the bank’s policies, the owners will pay all the charges.
Adding a co-owner to your property should be thought through and should not be a decision taken hastily. Since all of this involves control and cost issues, one must read all the documents before signing anything. The deed drawn should have all the clauses that the old owner would like the new owner to keep in mind.
Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. PropertyPistol does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.
