Before understanding the terminology of
'Ownership of Immovable Property' it is necessary to understand what an
immovable property is in common parlance immovable property means land,
buildings and things which are permanently attached to the land.
According to Section 2(gg) of the Karnataka Stamp Act,1957 “immovable property” includes land, buildings, right to ways,
air rights, development rights, whether transferable or not, benefits to arise
out of land and things attached to the earth or permanently fastened to
anything attached to the earth. The Transfer of Property Act, 1882, does not
define the word 'immovable property' in detail, but only mentions that
immovable property does not include standing timber, growing crops or
grass. According to the Karnataka General Clauses Act, 1899 immovable property shall include land, benefits to
arise out of the land and things attached to the earth or permanently fastened
to anything attached to the earth. The
words “attached to the earth” has been elaborately described in Sec.3 of the Transfer of Property Act. According to
this section, attached to the earth means --
1. Rooted
in the earth as in case of trees and shrubs;
2. Imbedded
in the earth as in case of walls or buildings or
3. Attached to what is so imbedded for
permanent beneficial enjoyment of that to which it is attached.
Let us now understand something about
ownership. Ownership can be broadly classified into two absolute ownership and
restrictive ownership. The ownership is
an amalgam of rights, interest and title which is recognised under law. The word absolute ownership is a bundle of rights connected to some
specified property. The word right has a wide meaning. It gives powers to the person said to have
rights to do something or act, or not to
do such thing or act, in relation to his property. Rights are of different types such as Right
in Rem, Right in Personam etc. “Right in Rem” is available against the whole world while the “Right in Personam”, is
available against a specified person, or group or group of persons. The owner of any property has a legal right
which is recognised under the laws of
the land. It consists of following
rights which are only illustrative and not exhaustive:
2. Right to use and enjoy his property
without undue interference of outsiders.
3. Right of alienation of his property as
provided under law in favour of any person/s without any restrictions by way of sale, gift, transfer by Will, and
by creation of trust.
4. Right to make alteration to the property/structure, consume, destroy, repair, reconstruct, hypothecate,
mortgage, lease and to use the property as security to borrow funds.
These rights are rights in rem
available against the whole world subject to the restrictions imposed under
various laws like Land Reforms Act, Land Revenue Act, Town Planning Act etc.
Apart from absolute ownership, there are
other types of ownerships which are restrictive in nature. In restrictive ownership, certain rights
detailed under absolute ownership are restricted or not available for certain
specified period.
Under co-ownership, there will be more than
one person who jointly own the same
property. Both the persons have equal or
certain percentage of rights to possess and enjoy the property as agreed to
between them. In the case of
co-ownership, the owners own the whole
property jointly and thereby their respective shares are not physically
ascertainable with definite measurement and boundaries. The shares are
undivided. For example, in case four persons own a property of 1200 sft,
each of them would be entitled to 300
sft.of undivided share in this property. This 300 sft of undivided share of
property could be any part of the building/property and cannot be confined to a specific part. Share of the co-owners in the property need
not necessarily be equal. It depends on
their investment in the property as detailed in the purchase document. In the absence of any such details as to the
share of investment made for acquisition of property it is presumed in law,
that all the co-owners have equal undivided share of interest, right and title in
the property as per section 45 of Transfer of Property Act. It is always
advisable to clearly mention the share of investment of each co-owner in the
property and their undivided share in right, interest, title in the property
for the purpose of alienation, inheritance and taxation.The Co-owners share in
the property is inheritable and
transferable. The concept of this
co-ownership is often termed as “Tenants in common” in legal parlance.
Practically, it is not possible to identify or divide a property held jointly by metes and bounds. Thus, the co-owners
possess and enjoy the property in unison.
Many owners of land, lease the property to
others on long lease. The terms of lease
also gives right to the lessee to construct buildings and enjoy the benefits of
such buildings on leased lands. This
practice has led to dual ownership of land and building. The land is owned by one person and the
structures thereon is owned by another person. The terms of lease also stipulate whether the ownership of the building
will get transferred to the lessor or the owner of the land free of cost on
expiration of the lease period or has to pay for acquisition of such
structures. The Income Tax Act
recognises the dual ownership concept and the owner of the building is taxed
for the income received from the property.
In sale and purchase of immovable property,
the parties generally enter into a sale agreement detailing the terms of
contract and registration of the sale deed is done later, on performance of duties
by the parties as detailed in sale agreement. At times the seller receives major portion of consideration and hands
over vacant possession of the property to the purchaser pending registration of
sale deed. This is called part
performance. The purchaser / transferee
who is in possession of property gets equitable title over the property. This is recognised under section 53 A of the
Transfer of Property Act. Even in the absence
of registered sale deed and though legal title is not conferred on the
purchaser / transferee, the rights of the purchaser / transferee is secured
against the seller or any person claiming through the seller. The only remedy available to the seller is to
file a suit for payment of balance of sale consideration. The requirements of part performance as
detailed in Section 53A are as follows;
1. There
must be a contract like sale agreement, etc., in writing containing details of the contract including handing
over of the vacant possession of the property to the purchaser.
2. The
contract shall be for transfer of immovable property for consideration.
3. After
the contract is entered into the seller has put the purchaser in possession of
the property and the purchaser has taken the possession of the property in part
performance as per the terms of contract.
4. The
purchaser has done something in pursuance of the contract like payment of
consideration or has performed or is willing to perform his part of contract.
However, this equitable right derived from
part performance is available only against seller or anybody claiming under or
through the seller. But the provisions
of this section do not affect the rights of a person who has purchased the property for valuable consideration and who has no notice of prior contract or part performance. Equitable rights of transfer under part performance are recognized
under the Income Tax Act 1961.
The other most frequently used word in
property transaction is “interest”. It
is a right available against the entire world, when it is related to some
property, land, building, immovable and movable. The interest may be vested, contingent or
absolute.
Vested interest is an interest in property
enforceable by a person at present or on a future date linked to happening of
certain specified event whereas the contingent interest is an interest
available only on a future date and not at present, which is subject to
happening of some uncertain event. In
vested interest the happening of the event is certain, whereas in contingent
interest it is uncertain. Hence it is
contingent. As the interest is
contingent, it is not transferable or inheritable. But on the happening of such uncertain event,
the contingent interest becomes vested interest, when it is transferable and
inheritable.
The word title which an owner has over the property is a legal right. The title has to be established with documentary
evidence. The title is transferable and inheritable. From the
documents of title you will come to know who is the owner of the property and
if the documents of title are defective even the financial institutions will not advance for purchase or
construction.
This is different from Tenants in Common or Co-ownership. In Co-ownership, the legal
heirs succeed to the right and title of the deceased co-owner. In Joint
tenancy, the other Joint owner succeeds to the right of the deceased joint
owner and not his legal heirs. This
concept is not in practice in India, unless specifically made in certain
documents. In the absence of any such
specific reference, the court presumes the ownership as 'Tenants in common' and
legal heirs succeed to the share of the deceased joint owner.
Knowledge of the type of ownership of the property you own would help you immensely
in your possession and enjoyment of the property.
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