Joint ownership over: Former property holder still uses address on Aadhaar and bank—should you worry? Experts explain

Suppose two brothers jointly own a residential property, with each holding a 50% share. Later, one brother buys the other brother’s 50% share, becoming the sole owner of the property. The former co-owner then moves out of the residence.

However, he continues to use the property’s address on his Aadhaar card and maintains bank accounts with the same address. Does this create any legal risk for the sole owner? Can the former co-owner’s Aadhaar or bank records affect the ownership of the property? Here’s what experts have to say.

What should the new sole owner know about his rights?

“Once a co-owner has validly transferred his share in an immovable property through a duly executed and registered instrument, the fact that he continues to use the property’s address on Aadhaar, bank accounts or other records does not, by itself, establish any continuing ownership interest in the property,” Ketan Mukhija, Partner and Co-Head of PE/VC at Kochhar & Co., said.

Does the former co-owner’s Aadhaar become invalid after sale?

Aadhaar is an identity document, and its address field is not a title document. Similarly, a bank’s KYC address records a customer’s contact or address particulars; it does not establish ownership of the premises. Therefore, retaining the old address does not automatically make the Aadhaar or bank records invalid or void after the sale, Amitraj Kaushal, Advocate at the Supreme Court of India, explained.

An address appearing in an identity or financial record does not, by itself, trigger a change. However, he said the former co-owner should update his address where required under applicable KYC and, practically, provide his new address to banks and other institutions.

What if the former co-owner has loans and faces recovery proceedings?

“The critical distinction is between the former owner’s debt and the ownership of the property. A creditor cannot ordinarily acquire rights over property merely because the debtor’s Aadhaar or bank records continue to show that address,” Kaushal said.

“In execution proceedings, attachment is generally against property belonging to, or over which, the judgment-debtor has the requisite disposing power,” Mukhija added.

However, he said a creditor may challenge a transfer of immovable property if it was made with the intention of defeating or delaying creditors, subject to the statutory protection for a transferee who acquired the property in good faith and for consideration under Section 53 of the Transfer of Property Act, 1882.

Can the new owner face recovery action?

Kaushal said recovery agents may still visit the address because it remains in the debtor’s records. The new owner should not obstruct any lawful proceedings but can produce the title documents and ask the creditor or recovery agency to correct its records. He should keep the following documents to protect himself:

• the registered sale deed by which the former co-owner transferred his 50% share.
• the earlier title deed showing the property’s ownership history.
• mutation/revenue/municipal records.
• property tax records and other municipal ownership records.
• possession/hand-over documentation, if executed.
• payment/bank records establishing the consideration paid under the transaction.
• any written declaration/NOC or undertaking obtained from the former co-owner regarding the transfer and change of address.
• correspondence with the former co-owner and financial institutions concerning the change of ownership.

What can the buyer do to remove the former co-owner’s address?

Kaushal suggested the following approach at the time of sale and after the sale:

• The safest approach is to address the issue at the time of sale itself. The sale documentation can record that the transferor has ceased to have any ownership interest, has handed over possession, and undertakes to update his address with Aadhaar, banks, and other institutions within a specified period.
• If the sale has already been done, the purchaser can send a written notice to the former co-owner requiring him to update his address and stop representing the property as his current residential/business address.
• The buyer can also inform banks or other institutions that the person is no longer the owner/resident and provide documentary proof of the transfer.

If the sale has already taken place, the purchaser can formally request such updates and retain evidence of the request. The purchaser cannot ordinarily change the former co-owner’s Aadhaar or bank records himself, Mukhija added.

Disclaimer: This story is for informational purposes only and does not constitute legal advice. Readers should consult a qualified legal professional for advice specific to their circumstances.