Family Settlement for Property Disputes – Part II

Family Settlement for Property Disputes – Part II

Irrespective of the social or economic status of families, disputes over property are common. Most people prefer rushing to court rather than making efforts to solve these issues in amicable manners. Family settlement on the property is more advisable and definitely a better way to resolve these issues.

Read: Family settlement for property disputes in India – Part I

This process involves a logical and peaceful adjustment that members of a family make so that they may avoid court cases. This could be related to both property and movable assets.

How does the Legal settlement on property in India work?

  • Now, before a case is filed in court for property partition, a legal notice has to be sent to the other co-owners of the property regarding family property partition/settlement.
  • The statutory notice for partition action must declare the shares of each co-owner, complete details of the property in dispute and the requisite action required to be taken.
  • If there is no reply from the co-owners or the response is insufficient, legal notice or a partition suit can be filed in the court.
  • A partition case is filed when none of the co-owners agrees to the terms and conditions of property partition, and one or more co-owners wish to distribute the property as per their shares.
  • A suit for partition is filed in that court which has jurisdiction over that area where the property is.
  • The court first decides whether the person who has filed the partition suit has a rightful claim in the property or not.
  • When the share is confirmed, no additional inquiry is required and the court then assigns individual ownership of the property to the rightful owners.
  • If the property fails to be distributed on the partition suit, the court can call for interrogation and give a preliminary decision for electing a commissioner who will then assess the property and submit a report.
  • The court after that decides the share of each co-owner by the given report and divides the property as per the share of each co-owner.

What are the legal requirements of family settlement on property?

  • Few legal formalities must be performed to ensure that the agreement is valid.
  • The settlement document has to have signatures of all the family members.
  • A single signature missing can become ground for disputing the document in court at a later date.
  • The document can be attested by two witnesses, though it is not mandatory.
  • The next step is to register the agreement.
  • The Indian Registration Act, Section- 17 a family settlement that implies to assign immovable property must be mandatorily registered, or the deed would be invalid.
  • Stamp duty applies to such deeds, and the amount would depend on the value of the property involved.

Family settlement for property disputes in India

Family settlement for property disputes in India

Introduction to the legal aspects

Wars over wealth/ancestral property have been present forever whether it is low-income households or ultra-rich families. Therefore property disputes are frequent in India. The most normal solution to such conflicts is to drag the matter to courts instead of opting for a simple family settlement. People rarely realise that court cases are a tedious and expensive process and satisfactory resolutions courts rarely guarantee a satisfactory resolution. Therefore it is advisable to always opt for a family settlement on the property.

What is a family settlement?

  • It refers to the adjustment that family members make in order avoid court disputes and amicably divide the family property with shared understanding.
  • The parties must be related to each other and have a right to a share of the said property.
  • The latter is not just limited to real estate, but can also claim his/her right on the movable assets like jewellery or money in bank accounts.

What does partition through family settlement connote?

  • A family settlement agreement is made in the same format of a partition deed.
  • It does not need registration and stamping.
  • It must be signed by all the members of the family voluntarily, without any fraud, coercion or pressure from any family member.
  • It does not necessarily have to be drafted in a written document.
  • It can be executed either by a compromise or by a mutual understanding between the family members.

Why is family settlement better than court settlement?

  • It is better because one can avoid protracted, public and messy court battles.
  • It is also quicker and a more harmonious way to resolve disputes.

What is the Procedure?

  • A family settlement is a peaceful process where a third person, mostly a lawyer or an older family member, helps the family arrive at a jointly peaceful solution to the property dispute.
  • A family settlement can also be a series of documents spelling out the property rights of each of the family members.

What about self-acquired property?

  • A person cannot execute self-acquired property during the lifetime of a person who had acquired it.
  • However, the self-acquired property automatically becomes a part of the ancestral estate on the death of such person. Hence the person can distribute the self-acquired property through his/ her will to any person he wants.

These are the basics of issues related to Family Settlement for Property Disputes – more about this in another article in the coming days.