Everything you need to know about property transfers!

There are several situations in which the property owner wishes to transfer property rights to someone else. This might be owing to the present owner’s critical sickness, retirement plans, or the sale of the property. In all of these scenarios, a legal procedure should be followed to document the transfer of property from a current owner to a new owner.

Purvi Shah, Advocate, Purvi Shah Associates, Mumbai, claims “A deed should always accompany a property transfer. It is a legally binding document that legally binds the property transfer and provides a definitive property title.” Furthermore, a deed saves money on stamp duty and taxes.

Nevertheless, before signing a deed, the buyer and seller must first sign a Memorandum of Understanding. “Memorandum of Understanding (MOU) is the initial legal document in the process of transferring the property,” says Joseph Kelwadi, Legal Advisor in Mumbai. An MOU should be signed by both the buyer and the seller before the property title is transferred. It contains information on the buyer and seller, the date the agreement will be filed, the value of the property, and the grace period within which the whole sum must be paid.” Both business and residential property are transferred using these documents. The seller transfers title to the buyer, or a family member transfers ownership to another family member or relative. The primary goal of the deed is to shield the transferee from any future issues, disputes, or scams.

Property transfer deed types

Sale contract

Any property transfer, whether by sale or purchase, must be recorded with a sale deed. It is a vital legally binding document that is controlled by the Registration Act and is required of both the transferor and the transferee. The deed contains all necessary buyer and seller information such as name and address, specifics of the property in issue, position and consider of the property, total area of the property, and building specifications, if it is a home.

The deed should state that the property is free of encumbrances and legal challenges. If there is an outstanding loan, the seller must pay it off before the transfer. Furthermore, the sale document specifies the sum to be paid for the purchase of the property, the upfront amount paid, the period allowed for payments, and the bank’s data. The stamp tax paid on sale deeds ranges between one and eight percent in various Indian states.

Deed of transfer

It is sometimes alluded to as an assignment deed and is used to transfer the current property title to another individual. In this case, the owner transfers not just the property rights but also all of the advantages that come with them to the transferee. This deed cannot be carried out while the plot is being sold and purchased. Furthermore, while it is not required to register the transfer deed, it must be signed in the presence of two witnesses. 

Deed of relinquishment

This instrument is employed when the owner wishes to knowingly transfer the property to the co-owner while relinquishing his portion of the property. Regardless of whether no monetary exchange is intended, the relinquishment deed is irrevocable once completed and recorded by both parties.

The amount of the property or portion of the property abandoned by the co-owner is taxed and stamp duty is charged, not the overall value. For example, if an owner with a 20% stake in the property sells the property, the stamp duty will be paid on only 20% of the property’s worth.

Gift agreement

When the buyer wants to transfer the property without exchanging money, a gift deed is used, particularly when donating the property to someone. Before registering the transfer of possession title, the transferor shall draught it on stamp paper and have it confirmed by two witnesses. The gift deed must be recorded with a sub-registrar, and once registered, the transfer is irreversible.

Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. PropertyPistol does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.