• Apartment Co-ownership for my father

I am going to buy an apartment with my husband by applying loan, and my father will be contributing 40% payment for the same by selling one of his property. 
When we apply for loan, the bank wants the registration document to be in applicants and co-applicants name.
But i want to add my father also as co-owner of my apartment. How can I add him to my property registration document and on what grounds.
Asked 7 years ago in Property Law
Religion: Hindu

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11 Answers

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 'tenantin-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, preagreed 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 longterm 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

Sanjay Baniwal
Advocate, South Delhi
5474 Answers
13 Consultations

your father is contributing 40 per cent of cost of flat by selling his property

2) in order to claim long term capital gains exemption he has to invest capital gains in purchase of another property

3) apartment can be purchased in name of your father , you and your husband

4) however your father will have to be an co applicant to the loan too if any loan is being taken for purchase of the apartment

Ajay Sethi
Advocate, Mumbai
96808 Answers
7811 Consultations

Dear Client,

In case ur father is contributing 40% in the purchase, than buy property in the name all u three as co sharer according to contribution or with choice.

Consecutively, apply for loan in the name of all u three.

Yogendra Singh Rajawat
Advocate, Jaipur
22989 Answers
31 Consultations

Hi

Either add your father name as co-applicant in load file or you can add him as co-owner only after completion of loan tenure.

Thank You

Rahul Jatain
Advocate, Rohtak
5365 Answers
4 Consultations

Hi, you can add your father as co-applicant in loan document so his name also included in the sale deed.

Pradeep Bharathipura
Advocate, Bangalore
5611 Answers
338 Consultations

1. All three of you, being your father, yourself and also your husband. should jointly enter in to an agreement for sale with the seller for buying the said property and he should be the joint title holder of the property when the sale deed is registered at a later date.

2. While applying for loan, inform the bank that your father will stand as a guarantor and joint mortgagor along with you two signing all the required documents and in that case the Bank will accept the arrangement to provide you the loan required by you.

Krishna Kishore Ganguly
Advocate, Kolkata
27453 Answers
726 Consultations

let your father and your husband become the joint applicants instead of you and your husband. in that case payment of your father will be treated as applicant's contribution towards loan taken by your husband.

Manish Paul
Advocate, Kolkata
287 Answers
2 Consultations

You may require the consent of your hisband for the same. Since a pert of money is being contributed by him he can become a co owner in the same.

At the time when the sale deed is being done your father name can be added as the co-owner

Regards

Anilesh Tewari
Advocate, New Delhi
18090 Answers
377 Consultations

As Co -Owner of the apartment as he is contributing 40 of the sale price. sale deed can be registered in multi names under one deed.

Rajashekar
Advocate, Bangalore
591 Answers
4 Consultations

Hi, you can add the name in the sale deed

Hemant Chaudhary
Advocate, Gurgaon
4630 Answers
67 Consultations

If the property is purchased by a registered sale deed in joint names of you and your father, then he becomes a co-owner or joint owner.

If that is the case he also becomes liable for the loan proposed to be availed on the property desirous of buying now.

In that case there will be three applicants i.e,,yourself as the main applicant and the other two i.e., your husband and your father shall be co-applicants but the provisions of law may not allow three applicant especially your father, when you are a married woman, to be an applicant for the loan.

Therefore before buying the property you should ascertain this legal position especially if you are desirous of availing home loan on this property.

T Kalaiselvan
Advocate, Vellore
87009 Answers
2335 Consultations

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