Types of Ownership

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

There are various types of ownership or forms of ownership by which we can understand the right or interest in land of somebody.

      The followings are the types of ownership or forms of ownership:

1. Single/Sole ownership: It is also known as “estate in severalty” where the title of property is held by one person. The ownership may be centered in one individual who enjoys all property rights.




1. Advantage:

Ø      Flexibility-in case of buying and selling

Ø      Can make all the decision easily

Ø      Manage the property easily

2. Disadvantage:

Ø      High entry cost

Ø      Can not purchase everybody

Ø      No easy access for all income group

 

2. Tenants in common:

Ø      When two or more persons wish to share the ownership of a single property, they may do so as tenants in common.

Ø      As “tenants in common” each owns an undivided interest in the whole property.

Ø      This means that each owner has a right to possession of the entire property.

Ø      None can claim any specific portion for himself.

Ø      In a tenancy in common, the interests need not be the same size.

Ø      For example- suppose that you invest Tk. 20000 along with two of your friends, who invest Tk. 30000 and Tk. 50000 respectively; together you buy 100 acres of land as tenants in common and presuming that everyone’s ownership interest is proportional to his or her cash investment. You will hold a 20% interest in the entire 100 acres and your two friends will hold 30% and 50%.

 

You can not pick out 20 acres and exclude the other co-owners from them, nor can you pick out 20 acres and say “these are mine and I am going to sell them”. Nor can they do that to you. You do, however the legal right to sell or otherwise dispose of your 20% interest (or a portion of it) without the permission of your two friends. Your friends have the same right. If one of you sells, the purchaser becomes a new tenant in common with the remaining co-owners.

 

When a tenancy in common exists, and if a co-owner dies his interest passes to his heirs or devisees, who then become tenants in common with the remaining co-owners. There is no right of survivorship.

 

If the co-owners fail to manage the property cost such as tax, repairing etc. then it is possible to request a court order partition. If 1 house and 3 owners exist, then it will be sold and distributed to the co-owners.   

 

3. Joint tenancy: Another form of multiple person ownership is joint tenancy. Its two key characteristics are-

Þ     The co-owners are considered to be joint and equal owners of the same undivided interest

Þ     A right of survivorship exists.

Ø      For joint tenancy, four unities must be present. They are-

Þ     Unity of time:

Ø      It means that each joint tenant must acquire his/her ownership interest simultaneously.

Ø      Once a joint tenancy is formed and it is not possible to add new joint tenants later unless an entirely new joint tenancy is formed among the existing co-owners and the new co-owners

Ø      Example- A, B, C are three joint tenants. If A sell his interest to D, then B, C, D must sign document to create a new joint tenancy among them. 

 

Þ     Unity of title:

Ø      It means that there is only one title and each co-owner has a share in it.

Ø      In contrast, each co-owner has a separate legal title to his undivided interest in a tenancy in common

 

Þ     Unity of interest:

Ø      It gets some interest and no matter how much each has contributed.

Ø      Example- three joint tenants, each have a 1/3 interest.

Ø      If the co-owners attempt to overcome this by listing disproportionate interests, the law will consider them to be tenants in common.

 

Þ     Unity of possession:

Ø      It means that the joint tenants must enjoy the same undivided possession of the whole property.

Ø      All joint tenants have the use of the entire property and no individual owns a particular portion of it.

 

4. Tenancy of partnership:

Ø      A tenancy of partnership exists when two or more persons as partners unite their property, labour and skill as a business to share the profits created by it.

Ø      The agreement between the partners may be oral or written.

Ø      Two types of partnerships exist in tenancy in partnership-

A.      General partnership:

Þ     Undivided interest holder

Þ     Property may not be same

Þ     In any time they have the right to remove any partner

Þ     Involve management and other activities

B.     Limited partnership:

Þ     Involve labour and property

Þ     They get both management and labour property

5. Syndicate:

Ø      Some people meet together and formed an organization and they have no formal ownership.

Ø      They invest property and skill, labour and benefit are distributed to the people who invested.

Ø      It is not a form of ownership; rather it refers to individuals or firms combining to pursue an enterprise too large for any of them to undertake individually.

Ø      Applied to real estate investing, the term “Syndicate” usually refers to a limited partnership in which the limited partners provide the investment capital and the general partners provide the organizational talent and ongoing management services.

Ø      Two types of partnerships exist in syndicates:

Þ     General partnership: The general partners receive compensation for purchasing, managing and reselling the properties

Þ     Limited partnership: The limited partners receive a return of their investment if the syndicate is successful. And it get compensation both for general and labour supply.

6. Real estate investment trust:

Ø      Here one person holds the property and another person invest to it.

Ø      These real estate investment trust (REIT) pool the money of many investors for the purchase of real estate.

Ø      Investors in a REIT are called beneficiaries and they purchase beneficial interest some what similar to shares of corporate stock.

A.      Advantage:

Ø      Small scale investors are beneficiary

Ø      No financial liability

Ø      Large amount of capital from numerous investors

Ø      The investors are free of day to day property management problems

7. Condominiums:

Ø      Condominium ownership is designed to provide exclusive use and ownership of a larger property, plus shared use and ownership of common areas.

Ø      The most popular application is in the apartment-type homes and town-house currently being offered for sale

Ø      Under the condominium arrangement, the individual owner has the exclusive right to occupy the space where his unit is located.

8. Cooperative:

Ø      Two or more partners formed a cooperative by some condition and construct a buildings & distributed within them by own.

Ø      One partner can not sell his property outside. But if he sell it, the condition he must be sell within the partner on which price he purchase it.

Ø      Under the cooperative form of ownership, a non-profit corporation is formed to purchase a building in severalty.

Ø      When a person buys stock in a cooperative apartment building, the stock gives him the right to occupy a specific apartment in the building.