Why NOT to buy jointly-owned property?
It is a perplexing situation for a buyer in India to delve into property transfers or joint ownership of the property. As a concept, it suffers from a serious lack of awareness, complex and outdated laws coupled with inordinate delays in rendering justice. This leaves not only the realtors, developers and buyers in a fix, but also the government confused about its effective implementation.
There are certain loopholes in the execution of laws in this area. For instance, when a buyer or an owner of a residential apartment nominates the property in someone's name, he does not know that the nomination does not entitle him to convey the said property to the nominee upon his demise. The nominee only becomes the trustee or a caretaker, until the actual owner takes over the property.
Often, some properties are conveyed not by actual transfer, but by transferring a company, which owns the property as a 'shell' company. When these transactions are challenged, the buyer is at a loss and does not know whether his ownership of the company would continue to give him the ownership of the property that he intended to buy.
In case of the Hindu Undivided Family (HUF), complications arise when a minor turns adult and disowns the decision of the karta of the HUF. This can lead to problems for the buyer and embarrassment for the karta. The transfer of protected tenancy or pagdi, is also unique to the Indian state of affairs. The Government conferred it an official recognition stating that such premium or pagdi, which is paid on the transfer of tenancy could be carried out by cheque and brought to tax under the Indian tax laws.
In my experience, I have observed that disputes take place when properties are sold and many claimants, who were otherwise dormant for years suddenly want to have a share of the pie. Land titles and land records are particularly complicated since government records may be defective or do not represent the facts.
Property passed on without a properly notarised will or a letter of administration also creates legal issues. There have been numerous instances where non-existent family members have turned up demanding a share in the property in the absence of a will. Relatives claiming to be stepsons and daughters come forward demanding a share in the deceased person's property.
The case of justice delayed is justice denied holds true for India. Here, enforcing your right can take years and sometimes decades, no matter how 'right' you may be. This can be frustrating for the buyer and at times, give rise to settling disputes through extra legal means, with the help of the underworld. Along with the processes, even the laws need a re-look. Clarity and consistency in the execution of such laws coupled with a quick and efficient public redressal system is the need of the hour.
Source: Economic Times
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