Joint Ownership, Nomination and a Will: How to Hold Property Title in Bangalore
Many couples and families in Bangalore register a flat in two names and assume the paperwork is finished. The sale deed settles who owns the home today. It is silent on who owns each share after one owner dies. This guide explains how co-ownership works in Indian law, what a nomination does, what a will does, and what to put in place on the day of purchase.
What Co-Ownership Means in Law
Two or more people who buy a property together each hold an undivided share in the whole of it. The share runs through the entire home, with no owner holding a particular room or floor. Each share is property in its own right, so it can be sold, gifted, mortgaged or inherited separately.
The sale deed may state the shares, such as 50:50 or 70:30. Where the deed is silent, section 45 of the Transfer of Property Act, 1882 sets the shares in proportion to the money each buyer paid. Where the payments cannot be traced, the law presumes equal shares.
A deed that states the shares clearly saves a later argument. It matters most where one buyer has paid far more than the other, or where a parent has helped with the down payment.
Why the Surviving Owner Does Not Inherit Automatically
English law knows two forms of co-ownership. Under a joint tenancy, the share of an owner who dies passes to the surviving owners. Under a tenancy in common, the share passes to the heirs of the owner who died.
Indian courts treat a joint purchase as a tenancy in common unless the deed clearly shows a different intention. A standard sale deed in Bangalore carries no survivorship clause. The share of a co-owner who dies therefore goes to that person's heirs, and the surviving co-owner keeps only the share already held.
A survivorship clause is unusual in Indian deeds, and courts read such clauses with caution. A buyer who wants the co-owner to receive the whole home will find a will the surer route.
Who Inherits a Share When There Is No Will
A person who dies without a will is said to die intestate, and the share then passes under the succession law that applies to that person. The main rules are listed below.
- A Hindu, Buddhist, Jain or Sikh man: the Hindu Succession Act, 1956 gives equal shares to his widow, sons, daughters and mother, who are the main Class I heirs.
- A Hindu, Buddhist, Jain or Sikh woman: her sons, daughters and husband inherit first.
- A Christian or Parsi owner: the Indian Succession Act, 1925 applies.
- A Muslim owner: Muslim personal law fixes the heirs and their shares.
Take a married couple who own a flat equally, with two children and the husband's mother living. On the husband's death without a will, his half is divided equally among his wife, the two children and his mother. The wife ends up with her own half plus one-eighth, and the flat has four owners.
A sale, a new home loan or a khata transfer then needs every heir to sign. A share that belongs to a minor child adds a further step, because a sale of that share needs the permission of the court.
What a Nomination Does
A nomination names the person who receives or holds an asset when the owner dies. Banks, insurers, housing societies and provident funds all accept nominations. The Supreme Court has held in several rulings that a nominee receives the asset on behalf of the legal heirs and does not become its owner.
A sale deed has no nominee column, and the sub-registrar records owners only. For a Bangalore flat, nominations appear in the records of a housing co-operative society, in some apartment association registers and in the insurance cover taken with a home loan. A nomination speeds up the paperwork after a death, but the heirs or the persons named in a will remain the owners.
What a Will Does
A will is the document that decides who owns a share after the owner's death, and it takes priority over a nomination. Under section 63 of the Indian Succession Act, 1925, a will must be in writing, signed by the person making it and attested by two witnesses. Each witness must see the owner sign or hear the owner acknowledge the signature.
A will needs no stamp paper, and registration is optional. Registering it at a sub-registrar's office creates an official record that the owner signed it, which makes a later challenge harder. A will may be changed or replaced at any time during the owner's life, and the latest valid will prevails.
Each co-owner needs a separate will covering that person's own share. Witnesses who are younger than the owner, and who receive nothing under the will, are the safest choice. A person who inherits under a will should not sign it as a witness, because that can put the gift at risk and invites a challenge.
Co-Ownership, the Home Loan and Income Tax
Banks usually ask every co-owner to join the home loan as a co-borrower. Two incomes raise the loan amount the bank will sanction, and the EMI calculator shows what a larger loan costs each month. A co-borrower who is not a co-owner, such as a parent added for eligibility, gets no share in the property.
Income tax treats each co-owner separately when the shares are definite. Under the old tax regime, each co-owner who is also a co-borrower may claim the benefits listed below, limited to the amount that person actually pays.
- Interest on the loan for a self-occupied home, up to Rs. 2 Lakhs a year for each co-owner.
- Principal repaid, within the overall Rs. 1.5 Lakhs limit for specified savings and payments.
The new tax regime allows neither deduction for a self-occupied home. A name added to the deed without a share in the loan or the repayments earns no deduction. The shares in the deed, the loan and the actual payments should therefore match.
The 1% tax deducted at source on a purchase of Rs. 50 Lakhs or more is tested on the total price of the property. Since 1 October 2024 the limit applies to the whole consideration, even when each buyer pays less than Rs. 50 Lakhs. Each co-owner deducts the tax on that person's part of the payment and files a separate challan-cum-statement.
What to Put in Place at Purchase
The purchase is the easiest moment to settle these points, because a lawyer is already drafting the documents. The steps below cover most buyers in Bangalore.
- Decide who will be on the deed, and avoid adding a name only for sentiment or for loan eligibility.
- State each owner's share in the sale agreement and the sale deed.
- Keep the loan, the down payment and the EMI payments in line with those shares.
- Have each co-owner sign a will for that person's share, with two witnesses, and consider registering it.
- File nominations with the apartment association or society and with the insurer of the home loan.
- Tell the family where the sale deed, the wills and the loan papers are kept.
- Review the wills after a marriage, a birth, a death or a separation in the family.
After a Co-Owner Dies
The survivor and the heirs need the death certificate first. With a will, the persons named in it apply for the khata and the utility records to be changed to their names. Probate of a will is not compulsory for a property in Karnataka, though a bank or a later buyer may still ask for it where the will is disputed.
Without a will, the family obtains a family tree or legal heir certificate from the revenue office to establish the heirs. Heirs who agree that one person should own the home sign a registered release deed in that person's favour. Disputes among heirs go to the civil court, which is slow and costly, and the home cannot be sold or mortgaged in the meantime.
An outstanding home loan does not end with the borrower's death. The co-borrower remains liable for the full amount, unless a loan insurance policy pays it off.
