Undivided Interest Definition and Legal Meaning

On this page, you'll find the legal definition and meaning of Undivided Interest, written in plain English, along with examples of how it is used.

What is Undivided Interest?

(n) When a property or right is owned by more than one person in which their respective share in the property or in the benefit accruing out of it is not quantified, then such right in the property is called undivided interest in the property. An example is a park owned by the residents of a particular locality.

History and Meaning of Undivided Interest

Undivided interest refers to the ownership of a property or asset by a group of people without determining individual shares. In other words, it is an ownership interest where two or more people have an ownership stake in a property or asset, but the exact amount of each person's ownership is not determined. Most commonly, this occurs when multiple parties co-own a home or piece of land together.

Undivided interest is often used in situations where it is not practical or feasible to divide the property among co-owners. For instance, a group of people who each have an equal interest in a park cannot physically split the park into different sections for each person. In such a case, the park would be jointly owned with each person having an undivided interest in it.

The concept of undivided interest has been recognized in legal systems across the world for centuries. It is a key principle of common law, which is the system of law that originated in England and spread throughout the British Empire.

Examples of Undivided Interest

  1. Five siblings inherit a property after their parents' death. They all have an equal undivided interest in the property, but the exact percentage of each sibling's ownership is not determined.
  2. Two business partners own a building together with an undivided 50-50 interest in it. They both have an equal right to use and occupy the property, and neither can sell or transfer their interest in the property without the other's consent.
  3. A group of investors form a limited liability company to purchase a commercial property. Each investor has an undivided interest in the property, but the exact percentage of each individual's ownership stake is not specified.
  4. An individual purchases land with a natural spring on it and grants his neighbors the right to use the spring. The neighbors have undivided interests in the spring and can use it without interfering with each other's use.

Legal Terms Similar to Undivided Interest

  1. Joint tenancy - A form of co-ownership where two or more people own property with equal shares and rights of ownership. If one owner dies, their share passes to the surviving co-owners rather than their estate.
  2. Tenancy in common - A form of co-ownership where two or more people own property with individual shares that can be bought, sold, gifted, or inherited without the consent of the other co-owners.
  3. Partition - The process of dividing a jointly owned property among co-owners who can't agree on how to use or dispose of the property.