What Happens To A Joint Property After Divorce?

People buy homes for different reasons. However, almost always, the need to buy one’s own home is felt as soon as one ties the knot or decides to go in the family way ─ before that, rented accommodation works just fine. Husband and wife join forces to make it happen, to have a house they would call home. Separate savings are quickly accumulated. Loans are fast applied for (banks are only too eager to assist them materialise their dream). An “ideal” property is diligently picked, loan application from are smoothly filled, the date of registration soon approaches. In no time at all, the family is ready for the griha pravesh ceremony, a ritual where higher powers are invoked to safeguard the house for the lifetime. Much to their dismay and disappointment, not all couples will have a happy thereafter in their new home; some would find their differences “irreconcilable” and head towards separation, known as divorce in legal terms. Caught in the crosshairs of this family discord would be the dream house that was bought in happy times. What happens to this house now? Who gets what? Let us find out what the law says about this.

Before we proceed further it would be crucial to note here that that law acknowledges a property to belong to the person on whose name it is registered. Any contributions made during the purchase by any other party, cash or kind, are not recognised, legally speaking, unless you have enough proof to prove otherwise. 

Breaking it, piece by piece

If the property is registered as the joint property of a soon-to-be-former married couple, the wife would be able to stake a claim at the time of divorce. Based on her contribution to the property, the court will grant her her share. In case the property is registered solely in the name of the woman, she will be able to claim it entirely unless the man can prove he contributed to the purchase.  His account statement, for instance, could show he has been paying the monthly installments towards the loan repayment. His account details would also reveal he paid the upfront amount at the time of purchase. The wife could also use these details as a proof of her contribution in case the property is not registered in her name.

To encourage property ownership among women, the government provides them certain incentives. In almost all states, they pay less stamp duty on property registration. In Delhi, for example, women buyers pay only four per cent of the transaction value as stamp duty, while men have to pay six per cent of the house cost as stamp duty. Properties are, hence, often registered in the name of the woman of the house, to save money. Similarly, many banks offer cheaper home loans to women, as compared to their male counterparts. If the loan is taken in the name of the woman of the house, it could help the household to save a great deal of money in the end. At SBI, for example, a woman borrower can currently avail of home loans at 6.95 per cent per annum. The rate of interest for men is seven per cent per annum. While these sops may prove beneficial during happy times, the scenario may change, if the relationship turns sour.

In the eyes of the law, the property belongs to the person in whose name it is registered; in the eyes of the bank, the person in whose name the loan is granted would be responsible to repay the loan. In case a property is registered solely in the same of the wife and she is also the sole applicant of home loan, the law grants her ownership of the said asset. However, this ownership of assets and liabilities cuts both ways. In a happy household, one partner might be able to pay the EMI because the other has been taking care of the remaining expenses. Upon divorce, you are on your own.

In a scenario where the property is registered in the joint names of a married couple and both are also co-borrowers, the court will decide the contribution made by each party and divide the asset accordingly. Both parties would be responsible to pay the loan, though. Do note here that the bank is only concerned about getting its money back. How a divorcing couple manages to do it is not really their concern.

Then there can be a scenario in which the property is registered in the name of the man of the house, and he is also the sole borrower. In such cases, the woman cannot stake any claim at the time of divorce under the existing Hindu law, the Hindu Marriage Act, 1955. The fact that the property was bought after the marriage would not have any bearing on the subject. Simply put, a wife can stake no claim on her husband’s self-acquired property if they decide to divorce.  The Marriage Laws (Amendment) Bill that talks about woman getting a share in her former husband’s property is gathering dust in Parliament since 2010, and is set to be junked in all likelihood. The man’s ancestral property he is expected to inherit also remains out of bounds for the woman seeking divorce.