In today’s fast-growing world, property buyers are looking for practical ways to invest in real estate. Owing to this shift in consumer behaviour, several distinct buying trends are now emerging in the real estate industry. Many investors and property seekers are opting for joint property ownership over sole ownership due to its more than one advantage. In this blog, we will discuss why joint property ownership is a step towards prosperity in your property ownership ladder.
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Types of Joint Property Ownership
Understanding jointly owned property and its legalities can be a little difficult, especially when you aren’t familiar with legal jargon. Don’t worry. We can help you out. Shared ownership of immovable property can be altered depending on its category. So let’s begin from understanding the two basic types of joint property ownership:
- Based on the Rights of Survivorship: This type of ownership enables all the partners to hold an equal right to the property. In some regions of Pakistan, every partner is free to decide what happens to their share without the permission of the other owners. However, the property cannot be sold or mortgaged without the consent of all the partners. In this type of ownership, the property gets transferred to the rest of the partners if one of them passes away. The surviving partners are required to submit a death certificate of the deceased in order to confirm their ownership of the property.
- Based on Entirety: This type of joint ownership can only exist between spouses. Just like the rights of survivorship, neither husband nor the wife needs spouse’s permission to do anything with their share of the property aside from one exception. Both the partners need to mutually agree upon the mortgage or sale of the property. In the case of one partner’s demise, the property is transferred to the other by default.
Now that you completely understand the types of joint property ownership with the help of Zameen.com, we’d like to tell you that we’ve compiled a list of real estate glossary that explains almost every term used in Pakistan’s property market by real estate agents, contractors, developers, and experts.
We will now move on to the key features and advantages of joint property ownership in the following sections.
Key Features and Advantages of Joint Property Ownership
Joint property ownership involves both tangible and intangible assets. But in this blog, we are particularly talking about immovable properties (houses, buildings, and plots). Joint partnership is a feasible way to own a property when you are under budget. It is a practical approach to secure your money in the real estate industry. Here’s a list of advantages of joint property ownership:
- When two or more people apply for a bank loan over the shared property, the bank sums up the total income of all partners. It is only natural that the higher the net salary is, the higher the loan amount can be applied for.
- The property is transferred without hassle. For instance, if one of the partners dies, the property gets transferred to the other without any complicated paperwork. It is ideal for properties that are shared among family members.
- Each property owner has the full right to enjoy the yields from the property.
- All the owners have the same title, at the same time, in the same deed.
- The possession of the property is ultimately shared at the same time.
- The percentage of ownership depends on the percentage of investment. It can either be 50/50 or 25/75, depending on how much each partner has invested in it.
Frequently Asked Questions about Joint Property Ownership
Property ownership is defined by state laws; so the way in which a property is owned prevails over how it will be distributed upon the owner’s death and under any other circumstances. It is always wise to stay ahead of your needs and carefully plan to avoid unforeseen circumstances that may result in complications. The better you understand the laws and regulations governing joint ownership in Pakistan, the higher your chances of avoiding unfavourable scenarios.
Here are some commonly asked questions about joint property ownership and its legal values:
Who can share joint property ownership?
Joint property ownership can be shared between anyone. It can be anyone from your family, your spouse, your parents, children, or siblings. It is not uncommon for the ownership to be shared between business partners or even friends – so it will be justified to say that there’s no certain law for who your partner in co-ownership can be.
What happens when one of the property owners die?
According to law, in shared property ownership, if one of the partners dies, their share is transferred to the other owner(s) by default.
What is the Right of Survivorship?
The right of survivorship is an important characteristic of joint property ownership. If included in the title, the right of survivorship is a major factor that determines what happens to a joint property when one of the partners dies. This right permits the surviving partners to absorb the share of the deceased partner, and it continues until only one owner remains.
Is there any alternative for Right of Survivorship?
While the right of survivorship might sound like the best idea to what happens to a shared property when one of the owners dies, it isn’t always the best solution. There can be numerous scenarios where it isn’t desirable, especially when the property is shared between friends and business partners. Let’s say, if one of the owners wants their share to be transferred to a family member instead of partners – they need to mention conducts within the right of survivorship in detail. Additionally, it is important to understand that stipulations within survivorship differ from one region to another, so you need to be extremely cautious about it.
However, that’s just one case of what happens to a shared property when one of the owners dies. There are many other situations where stipulations need to be amended. So, it is in your best interest to check with local property laws to see what additional steps are needed in your particular case.
What happens when one of the partners want to sell their share in the co-ownership property?
It is quite a common case when one of the owners decides to sell their share. In situations like these, the matter needs to be taken to a local court and the court will give a decision according to the purchase agreement.
On a side note, if you’re looking forward to selling or transfer your property any time soon, we would suggest you go through our recently published guide on selling and transferring property in Pakistan and make an informed decision.
Are there any limitations on whom you can sell your share to in jointly owned property?
There is no limitation on the sale of a jointly owned property as long as there is a unanimous agreement between the partners. Partners can sell their share of the property to one or more of the existing partners or even to someone outside of the partnership.
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