Useful Tips to Transfer a Property

Useful Tips to Transfer a Property

When we transfer a property, one thing we need to ensure is that the act of transfer is complete. The legal formalities are fulfilled, and the rights and interests are transferred as desired.

Transfer of property 

It is an act by which one person transfers the rights and interests in a property to another. There is a change in ownership. It is done by executing a conveyance deed which may be in the form of:

  • Sale deed
  • Gift
  • Relinquishment deed
  • Will

Each conveyance deed has some legal requirements. It is valid only if the stipulated conditions are fulfilled.

Read: Corona crisis and stay at home – check your property documentation!

The decision to transfer a property needs to be taken prudently, keeping in mind the following tips: 

 Legal Assistance:  

The transfer of ownership involves precise documentation and payment of stamp duty/registration charges. All the documentation part must be handled cautiously. It is advised to take the assistance of legal professionals to avoid issues later. 

Registration of deed:

The registration of transfer deed can be optional or mandatory as per law. If it is compulsory, the deed is valid only if registered. The process of registration helps to:

  • Create evidence of ownership
  • Records the transaction for future references

The registered document of transfer is like a title deed and reflects the ownership.  

Read: Tax Benefits Of Real Estate

Contents of the deed:

The transferor can transfer all the rights or limited rights in the property. The contents of the transfer deed are, therefore, significant. They define the extent and scope of the transfer. 

Market Value of the property:

Let the professionals assess the correct market value of the property. It helps to get the right price for the property in case of sale. The sale price of the property is the primary factor to decide the stamp duty charges. 

Right of the transferor:

The transferee must ensure that the transferor has the right to transfer the property. It is essential if the owner himself is not present to execute the deed. If the transfer is through the power of Attorney, the authority should be clear and unambiguous. 

In case of Joint ownership of the property, it is significant to understand the rights of the co-owners. A co-owner generally executes a relinquishment deed to give up the share. The other co-owners get a right to that share in the property.

Read: Saving yourself from fraud while buying or selling a property

Payment of dues:

The deed must mention whether the transferor or the transferee will pay the dues of the property. All the taxes must necessarily be paid to avoid any legal trouble. 

The motive of the transfer:

The transfer deed is executed as per the purpose of the transfer. A gift deed is executed if the property needs to be transferred to relative out of love and affection. If the property is desired to be transferred as per preferences, executing a Will is the option. The sale deed is a common method to transfer property, but it involves tax payment.

Thus, to transfer property, one must decide wisely after analyzing all available options.

Common frauds in the transfer of properties

Perception is – Where there is property, there is a fraud!  Possibly because, there is a lack of transparency in the processes, and the documentation is not simple. Also, in most cases, there is a casual approach to property management issues.

Here’s a glimpse of what the transfer of property entails, the potential frauds therein, and the solutions

Transfer of Property:

  • The transfer of property is an act by which the owner of the property (transferor) transfers the ownership rights in the property to another person (transferee)
  • Property can be transferred in several ways like Gift, Will (Inheritance), Sale, Partition or Relinquishment of share in case of co-owners.  
  • Property is transferred along with the liabilities attached to it. But it should be with the consent and knowledge of the transferee. E.g. in case of Gift, the donee must accept the gifted property with the liabilities if there are any.
  • There can be some agreement or adjustment between the transferor and the transferee about liabilities. It is generally there in case of inheritance, partition or relinquishment.  

Also Read: Property rights of a son on mother’s self-earned property – Issues and the Law

Fraudulent transfer and frauds:

  • When the transferor transfers the property by concealing the facts of liabilities/defect in property from the transferee intentionally, it is called fraudulent transfer. 

Some of the common frauds committed while transferring the property are:

  1. Fake title: The title deed is fraudulent. The person presenting himself as the owner is not the owner. Property papers are false and forged. The title deed can be any document which depicts the title of the owner in the property. 
  2. Multiple Registrations: The property transferred (sold) has got multiple registrations. The property is sold by the owner to many buyers fraudulently. The owner grabbed the money from all the different buyers and absconded. All the different buyers have to fight legal battle to establish their ownership.
  3.  Pre-mortgaged property: It happens a lot of time that the seller/transferor has already mortgaged the property sold/ transferred with a bank to avail loan against it. Thus the property is not free from encumbrances. The fact is not revealed to the buyer, and the buyer loses his hard-earned money if he purchases the property without exercising due diligence.
  4. Encroached property: The property transferred has been constructed on an encroached land. The actual land belonged to Government or another party, but the person who has sold the property to the buyer never disclosed the same. The transferee has to fight legal battles later.
  5. Permissions not obtained: Properties like those in a Registered Society or Housing Board flats require special approval from the Concerned Authorities before transfer. In some cases, the transfer is not even permissible. But the people manage to defraud the transferee and transfer such properties without obtaining the necessary permission. 
  6. Mismatch of location and area: The fraudsters transfer the property by mentioning the wrong location. The area (measurement) mentioned is also not correct. 
  7. The person not authorized to transfer: (fake GPA or misuse of GPA): A person may transfer the property which he is not authorized to transfer. The power of attorney holder misuses GPA and transfers the property in violation of the terms of the same. Hence he cheats both the actual owner and the transferee. Sometimes the GPA is a fake document.
  8. Encumbrances over the property: There are various kinds of encumbrances affecting the value of the property. These can be in the form of mortgage, lien, litigation (disputed property), unpaid charges (utility charges). The transferor of the property can cheat the transferee by not disclosing the same.

Also Read: The married daughters’ right in mother’s self-acquired property

The way out – Key to avoid the frauds:

  • Be alert
  • Take timely precautions
  • Take proper legal advice
  • Scrutinize the documents

Certain precautions will enable the transferee to avoid suspicious transactions:

  • Demand the original property papers for verification.
  • It is essential to check for the payment of dues. Verify the same from the respective Authorities, e.g. office of Municipal Corporation. It is vital to check if the transferor has paid the dues.
  • Visit the offices of local authorities to check out for the encumbrances on the property. The transferor must clear any loan availed by mortgaging the property.
  • If the Power of Attorney holder transfers the property, it is significant to verify its terms to ensure that there is a right to transfer the property.

Transfer of Property on the basis of Registered or Unregistered Will

Transfer of Property on the basis of Registered or Unregistered Will

Transfer of property means transferring the ownership of the property.  For transfer of the property, one has to establish his claim or has to prove his title. The same can be done through various documents like sale deed, gift deed, Will etc.

Will or no Will

Whenever a person dies, someone has to manage his property and assets. There can be two situations:

1.   The person has died after making a Will

2.   The person has died without any Will (has died intestate)

In the first case, the property gets distributed as per the tenor of the Will.

In the second case, the property gets distributed as per the Law of Succession. The property gets devolved to the legal heirs of the deceased as per personal laws and relevant provisions of statute e.g. the Indian Succession Act, the Hindu Succession Act etc. whichever is applicable.

Registration of Will

As per the Indian Laws, it is mandatory to register the document based on which the immovable property having a value of Rs 100 and above is transferred. If a document which is required to be registered compulsorily has not been registered, the document does not confer any title. It is not admissible in evidence in court.

If the Will is registered, it is better. The registered Will is considered as a genuine one. The testator and the attesting witnesses appear before the Registering Authorities. It helps to ascertain their identities and add to the authenticity of the document.

Process of transferring the property

For transferring the ownership, the relevant papers are submitted to the office of the Sub Registrar.

Documents required are:

  • Will – A Will can be registered or unregistered. If the Will is registered, it is in the safe custody of the Registering Authority. It can also be kept in the safe custody of a banker or a lawyer. In such a case a certified copy of the Will is submitted. If the Will is unregistered, attested copy of the Will is submitted.
  • Probate – Probate can be demanded if it is compulsory or if the Will is not registered. Probate is a certificate from the court certifying that it is the last Will and is genuine. Probate is granted to the executor appointed under a Will. Probate is mandatory in certain States.
  • Succession certificateSuccession certificate is required to access the moveable assets of a deceased person. Even if the Will is there but not registered, the claimant through the Will in some cases, is asked to bring the succession certificate from the court. Succession certificate is generally required for a moveable property like bank account balances, shares, securities etc.

There are certain other documents also which may be required/ demanded by authorities, depending upon the facts of the case.

  • Affidavit from the legal heirs stating no objection to transfer the property to the person named in the Will if all legal heirs are not included in the Will
  • Affidavit of attesting witnesses if the Will is unregistered
  • Affidavit from the beneficiary of the Will to clear all the liabilities related to the property

It is always advisable to draft a valid and proper Will through a lawyer. It is better to get the same registered. It will help the family members later for a smooth transfer of the assets in the name of beneficiaries.

Transfer of property after the death of husband

Transfer of property after the death of husband

After a death of a loved one, our lives come to a standstill. It is even worse when it is a woman who has lost her husband, her whole world shatters. Most of the Indian women never indulge in the matters of property and legal documentation while the husbands are alive. That is the worst part after husband passes away, she has no clue what is required to do to secure the property rights of her and her children. The loss that death has brought in cannot be recovered, but the right of the widow and the children on the property left behind by the deceased has to be exercised so that it doesn’t entangle one in any further legal complications.

What to do to transfer the property left behind by deceased husband?

Most of the women who have lost their husbands become dependent on the relatives to get the property documentation done. Many times, it is seen that instead of helping, relatives end up creating more disputes between the family which ends up in long legal battles in the courts.

The step one should be to seek legal advice from a property lawyer.
Find a lawyer who is trustworthy and have an understanding of the property law in India. If required take the second opinion and then decide to choose the right lawyer.

Never delay the process of transferring property ownership after the death of the husband. Though it is not easy to overcome the emotional loss but at the same time, one should not forget that it is vital to secure the property rights.

In case of NRIs: As is commonly known, NRIs are not permitted to purchase agricultural land, but they can only inherit it from their forefathers. In case of an NRI inheriting a property, either a widow receiving it from her dead husband or the successors of such a person; following are the documents that are required for a transfer title of inherited property:

  • A registered will – It can just be written on a plain piece of paper, witnessed by two people, registered by the sub registrar’s office, which on being presented in court is treated as a valid document.
  • Encumbrance certificate – Such a certificate records and reflects all the transactions occurred in respect of an immovable property be it a sale, lease, mortgage, gift, partition, release, etc.
  • Land Record / Khata – It shows the entry of the property owners details in the records of the Corporation / Municipality / Revenue Department. While the registration document shows the purchase or sale of the property from one owner to another with various rights thereon, whereas the Khata / land records show the annual property taxes paid.

Revocation of Transfer Deed

revocation of transfer deed

MEANING

Transfer of death deed means when the owner of the property transfers his ownership of estate to whom he wants to transfer at the owner’s death. It is a method for avoiding probate of real estate when the owner does not need the tax benefits of a trust.

These deeds are governed by State laws.

REVOCATION

The beneficiary cannot have any interest in the property until the real owner dies. There is an advantage over adding the heir to the deed while alive, it can be revoked or changed without any consent of heir.

In case, there are more than one owner, creating a transfer on death deed, then the owner still surviving (last one) can revoke the deed or change the beneficiaries against the wishes of deceased owner(s).

RECORD OF REVOCATION

The simple way is to sign a document of revoking the TOD deed and record it in just a way of recording original deed.

SIGNATURES OF ALL CO-OWNERS

Generally, all the co-owners must sign the revocation. The revocation will not be effective unless it is signed by the last surviving owner, in the case where the person owns the property with someone else and person that person has the sign of ownership.

TRANSFER THE PROPERTY TO THE THIRD PERSON

The owner is free to give away or sell the property that you have left in a TOD deed.

TOD will not be effective if the owner is now no longer own the property at the time of death.

RECORD A NEW TOD DEED

You can simply sign and record a new TOD deed, leaving the property to someone else. Only the most recent one TOD deed will be valid as per State law, in case there are more than one TOD deeds.

CASE:

MURIKIPUDI ANKAMMA V/S. TAMMALACHERUVU NARASAYYA 1947

HELD: Learned single Judge of Madras High Court held that in case of absence of any express reservation of power of revocation in a gift deed, then a donor cannot continue with the right to revoke the gift.

Under Section 126 of Transfer of Property Act, a gift can be revoked if a man will improvidently bind himself with a voluntary deed and not reserve a liberty to himself by a power of revocation, then the Court will not lose the fetters he has put down upon himself.

CAUTIONS

  • Do not use the will to try to revoke the transfer on death deed. It does not work.
  • Prior to the death of Granter, the revocation must be recorded in order to make it effective.