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.

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Transfer of ancestral property and registration of transfer deed

Transfer-of-ancestral-property-and-registration-of-transfer-deed-India

Transfer of immovable property results in the conveyance of property rights, i.e. title, rights, interest in the property by one person to another. 

The property can be transferred by the person having rights to do so. Generally, it is the owner of the property or the person authorized to do so. 

Any document showing the ownership of the property/land in the name of a person is a title deed. E.g. in case of sale of a property, sale deed is the title deed.

In the case of ancestral property, the ownership is verified from the record of the land registration department. 

What is the ancestral property?

Ancestral property is the property which has passed on up to four generations, including the owner, without any division. The coparceners (a small unit of lineal descendants of a common ancestor within the undivided Hindu family) have a birthright in the ancestral property.

Read More: Property rights of a wife after husband’s death

Only the Karta of the family (Karta is the head of the Hindu Undivided Family) has the right to alienate the HUF property which may include the ancestral property under certain conditions.

Property inherited from maternal ancestors or obtained by Gift, or Will is not ancestral property.

Whenever a person inherits an ancestral property, it is essential to get it transferred in the name of the beneficiary in revenue records or municipal records.

Modes of transfer and transfer deed:

There are various modes of transfer of immovable property like transfer by sale, gift, lease, and mortgage. The transfer takes place vide instrument called transfer deed. As per the nature of transfer, the deed can be sale deed, lease deed, mortgage deed etc.

Read More: Property rights of the second wife and her children

Transfer of ancestral land:

Ancestral land can also be transferred. The coparceners who have right over the ancestral property can transfer their respective shares or interest in the property. If the ancestral land is divided among the family members or there is a partition of the property, the property ceases to be ancestral. The share which each member gets after partition becomes the self-acquired property.

There can be a transfer of share or interest by coparcener (co-owner) without actual partition of entire ancestral land. In some parts of the land, consent of co-owners, i.e. the consent of other coparceners, is required. There are other areas where the consent of other coparceners is not needed.

A coparcener can also transfer his share to another coparcener. 

However, in any case, the transfer deed must be registered as per Law.

Registration of transfer deed:

The registration of transfer deed can be optional or mandatory as per the Indian Registration Act.

Read More: Property Rights of Women as per Hindu Law

 In some cases, it is mandatory like: 

  • sale of immovable property if the value of the property exceeds Rs 100
  • Lease of immovable property if the lease period is more than 11 months
  • Gift deed

If the registration is compulsory, the transfer is not valid if the deed is not registered. It is always better to get the transfer deed registered. The process of registration helps to:

  • Create evidence of ownership
  • Records the transaction-related to a property for future references

The transfer deed transfers the right or interest in the property to another person called transferee. For a valid transfer, the deed must be registered as per Law. The land registry, i.e. the department for registration records the ownership for the public. Once the document is registered as per Law, it becomes the title deed, i.e. document showing the name of the person holding the title of the property. 

The property rights are mentioned in the record maintained by the land registry department.

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

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.