Question

Read the case study below and answer the questions that follow:

A private investor recently experienced an increase in her profit due to the changing ways of doing business. She would like to investigate the feasibility of hiring a property manager for her mostrecent residential-commercial project in the outskirts of Ghala. All of her other projects concern import & export (e-commerce) and this is the first time that she will be responsible for a construction project.

Q11.b. The investor has inquired about joint leasing between tenants for this building. Prepare a document addressing her query.

The document should include:

i. A brief description of each of the types of joint ownership available.

ii. Any two (2) changes that may be required for converting existing lease contracts to account for joint ownership.

iii. The feasibility of each of the types for this project along with a reason.

Answer 1

11b-Ans(i) : Joint tenancy occur when two or more people try to hold the management in the field of real estate. Both the owners would have equal rights on the property and if one owner dies due to natural cause, whole property would belong to the surviving tenant.

Tenancy in common is also a method of joint tenancy. Tenants in common hold title individually for their respective part of the property and can dispose of or encumber it at will. This method is also somehow or almost similar to joint tenancy.

Tenants by entirety is a method if the owners are married. This is ownership in real state under the assumption that the couple is one person for the legal purposes. Here this method will not be used.

Ans(ii) : If the contract is on lease, the tenants will not have rights on the property and for converting it into the ownership, will would be created if any one of the owner dies then the property would belong to the one surviving.

The documents have to be named in favour of the tenants also as previously it was just one owner owning the property but now legal registration of the property would be done in the name of tenants so that they would have equal access to the property.

Ans(iii) : Below are the feasibility of the given project -

• Co-owner of the property could easily claim the tax deduction on principle and interest amount.
• Co-owner can claim a benefit of around 2lacs per year of the interest paid.
• Both the owners can enjoy the tax deduction per section 80C.
• Hassle free property transfer can be done. These occurs if any of the owner demise.
• Payment flexibility is available. It is to the borrower to decide the applicants contribution in repayment.