Rajashri is very sad this afternoon.
After meeting her college friend Sucharita, her mood dampened.
They had a close bonding during their college days. They shared their joys and sorrows, dreams and disappointments quite freely.
But as usual, life took them in different directions.
Sucharita was brilliant in her studies and it was not difficult for her to get a job as a scientist in a pharmaceutical company in Hyderabad.
The last they met was at her wedding when Rajashri also met with Sucharita’s husband, Rajat, a bright software engineer.
And today, after almost 5 years at Salt Lake Sector 5, Rajashri met a sad, broken-down Sucharita.
The Sadness of a Broken Home
Rajashri and Sucharita went to a cafe nearby and settled themselves.
Rajashri was dying to ask why Sucharita was so run-down but decided to wait for her to speak up.
After the initial pleasantries, Sucharita opened her heart to her friend.
Her marriage was not a happy one, she confided.
Only after a few months, Sucharita and Rajat started having differences on various grounds.
One thing led to another, and their marriage is near the end of a precipice now and none could stop the slide.
They have a 3-year-old son and Sucharita is expected to get his custody.
But there is one thing for which she wanted Rajashri’s help.
“I know your brother, Srijit, is working in NK Realtors and I want to know a few things from him,” said Sucharita.
“Of course, we can go and meet him right now. Their office is not far from here. And he knows you since you came to our home many times while we were in college.”
Sucharita Met with Rajashri’s Brother
Srijit was surprised and shocked to see Sucharita after so many years.
“Is there anything wrong with your health? You look quite run down.” her brother asked.
Sucharita told her story, often helped by Rajashri.
Silence fell in the room after the story ended.
Coffee came and while sipping from her cup, Sucharita said to Rajashri’s brother, “Srijit, I have a jointly owned apartment with Rajat. What is the legal implication for divorce on it? Can you guide me so that my interest is protected?”
“We will discuss that now. Tell me, is there pending home loan repayment?”
“Yes, there is,” revealed Sucharita.
What is a Joint Property?
Any property bought with another person/entity is known as joint ownership. The two parties involved are known as ‘joint tenants’ or ‘tenants in common’ and the contribution size determines the percentage owned by each tenant.
To distribute the burden of buying a home, people often opt for joint ownership, with relatives, especially the spouse.
It is generally a good idea to buy a home in co-ownership for various reasons. Each person can enjoy tax benefits if they have separate and genuine sources of income. A home loan is also approved for a higher amount in that case.
However, if any legal dispute arises over the property, then, all the co-owners will be involved in the case.
According to the law, a specific property belongs to the person under whose name it has been registered. It makes no difference who puts money into it, who is the primary contributor, or anything of the sort. Legally, whether or not any one or both spouses paid for the property, the ownership lies with the person whose name is on the property deed.
Legal Implications of Divorce on Joint Property
If a property is registered jointly, both the wife and the husband will have a claim on it at the time of divorce. However, no regard is given to the wife’s contribution to the purchase of the property; the court will grant her a rightful share nonetheless.
However, in the case of the property being solely registered in the name of the wife or the husband, the registered owner has a full claim on it. Still, the spouse who is not named in the registration deed can claim a portion if he or she can prove financial contribution in buying the house.
If the property is registered in the husband’s name and he is the one who contributed to buying it by applying for loans, then the wife has no stake in the property and will get no share of it.
If the wife made an upfront payment towards it, then the husband will be asked to treat this as a loan and pay it back with interest.
Home Loan Repayment
If a property was bought by a couple who both have taken out loans in their names, a thorough study of contributions is made, and the court of law divides the asset based on their share of the purchase price. Also, both spouses would be liable to pay the loan back in this scenario.
This is because all co-borrowers have a responsibility to repay the loan. In situations of the joint property after divorce, the financial institution provides no waiver, and so every co-borrower is liable to make the repayment on time.
In case of a dispute or death of a co-owner or divorce or insolvency, etc., which may lead to a default on the home loan repayment, the lending institution can proceed with the recovery process against all borrowers.
Jointly Owned Mortgaged Property Settlement on Divorce
When a couple, joint owners of a property, decides to divorce, the settlement of the house must be done amicably. This is especially true in the case of a mortgaged property.
There are a couple of ways of settling the outstanding amount to the financial institution:
- The couple can sell the home, pay off the debt, and then split the remaining amount of money.
- One of the spouses could take ownership by repaying the contribution of the other. The new owner is then liable to repay the mortgage and clear the other’s name from the loan account after it has been cross-checked by the financial institution.
Buying a home involves a whole lot of paperwork and induces a lot of financial stress, so most couples prefer to do it together. While this appears to be a good idea in general, things can go wrong, if the couple chooses to get a divorce.
Although nobody thinks of a divorce-like situation in advance, it is very important for couples to take help of the legal experts, before buying a home in joint names.
NK Realtors empowers homebuyers with its comprehensive knowledge base on different aspects of the real estate sector.
NK Realtors has recently launched NK Homestoreys, a dedicated division for offering property-related legal services.
Contact us for any kind of property-related legal services in Kolkata.
This particular incident is based on real-life incidents. The names are changed for privacy.
