This Is How You Can Claim Your Share In A Jointly-Owned Property After Divorce

Family is what makes a home. However, when a marriage breaks, thus, dividing the family, a home (a property)  becomes the toughest asset to divide. With increasing cases of divorce along with home ownership becoming a norm, women should be smarter in planning their financials for the long-term irrespective of their marital status.

In most cases, both wife and husband contribute towards buying a home in an urban set-up. As they both struggle with finances and upfront payments during the purchase of a home, they do not maintain a clear documentation of each of their contribution towards the payment of the home.

There might be a genuine oversight of 'who paid what and when', which might end up in disastrous property wars, making the process of a divorce much messier. Any chances of amicable divorce is crushed due to battles on property, resulting in heavy lawyer fees and delay in divorce settlement.

So, it is very important for couples to keep an eye on every penny spent and maintain records as there are a lot of incidentals while purchasing a home. 

How to establish your claim?

If there is documentation to the extent of claim and the equity that you have in, then the process of division is an easy affair. This is in the case of joint ownership of a property in India.

All you have to do is to go through documents of and decide the extent of equity at the time of investment and extend it to the current value and claim it. This will however require bank receipts and proof of payments to determine the contribution and hence the share held by each of the spouse.

However, in most cases husbands decide to register a home in the name of their wives to take advantage of lower stamp duty that is to be paid in case of a female owner. This can backfire in case of a divorce as Indian laws on marriage recognise titular ownership of homes.

If the wife has contributed to the purchase of a property and the title is held only by the husband, then the wife will have to prove that she has contributed to the payment. This will require any documents of loans that were extended or bank receipts and equated monthly instalments (EMI) payment details, among others, will have to be furnished before staking claim on the home.

In many cases, wives make a significant contribution to the upfront payment of a home while the husbands take care of the monthly EMIs, this will become very tough to execute while division. The husband will have to treat the amount that is extended by the wife as a loan and have to pay it back with agreed-upon interest.

Only those properties that were bought after marriage are eligible for division by law. Also, homes that become family possessions in the form of inheritance cannot not be divided and shall belong to the person, who inherited those assets.

In India, a woman who seeks divorce will not have the right to property if it is held in her husband's name. However, if the husband seeks divorce, he will have to contribute to the ex-wife in some way of alimony or other assets for her maintenance which might include the home.

How to divide a residential property?

There are three ways in which a couple can divide real estate in India. If it is a home that they are currently residing in, they can both vacate it, give it to rent and divide the rent for the rest of their lives or until they decide to sell it. This is a good option if the value of the home is appreciating. They can agree to sell it at a later date to take advantage of good returns on investment.

The second option is for one of them to keep the home, on the condition that they are willing to buy out the other. The buying party should decide on the value of the home, agree on a price and calculate the extent of equity of the other and pay it. Most of these payments will have to be done in cash and sadly the other party generally tends to charge a premium due to inside information on sentimental attachment. If it is tougher for one spouse to move out, one of them can rent it to other. If the ex-husband decides to rent it to wife, it can be adjusted against any alimony payments that the former has to make.

The third is the best and easiest way to divide a property is to sell it. This is very popular especially in cases where a long tenure home loan still exists. It would be a burden for either of the parties to keep paying half of the EMI, while they reside at another accommodation.

(Katya Naidu has been working as a business journalist for the last nine years, and has covered beats across banking, pharma, healthcare, telecom, technology, power, infrastructure, shipping and commodities)