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After transfering the ownership of the item object from user A to user B, and set the inherit permission to true. User B becomes the new owner. If User A is the owner of the library, user A should still have all permissions to the item. If the inherit permission is set to false and if User A doesn't have explicit item level permission, user A should not be able to see the item.
Rules for ownership change:
change ownership of an item:
1. the requesting user needs to be domain admin
2. the new owner should be a user
3. the new owner should be different from the old owner
Change ownership of a library:
1. the requesting user needs to be domain admin
2. the new owner should be a user
3. the new owner should be different from the old owner
Change ownership of an album or a slideshow:
1. the requesting user needs to be domain admin
2. the new owner should be a user
3. the new owner should be different from the old owner
4. If the album/slideshow is not empty, the new owner should either have admin rights over all items in the album or the items in the album are publicly viewable. Otherwise, the ownership can't be changed.
Alfresco problems and workarounds:
Since owner of an object by default have all permission of the object, we don't need to add explicit admin permission for the owner. However, after changing ownership of a library, the new owner can't view child items under the library. Alfresco has entered this as a bug at https://issues.alfresco.com/jira/browse/ETWOTWO-741 . As a workaround, we have to add explicit admin permission for the new owner when ownership is transftered. Also to be consistent, we are adding explicit admin permission for the owner when the library is first created.
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