When it comes to transfer of property ownership, there are many ways to do so. In this guide, we detail the different ways possible and documents required.
What is a transfer of property?
Transfer of property means transferring ownership of an immovable property from one person to another. This is governed under the Transfer of Property Act 1882. Under this act are mentioned guidelines that have to be followed so that the transfer of property is legally recognised.
What is the legal framework that governs property transfer?
1) Transfer of Property Act, 1882
2) Indian Registration Act, 1908
3) State related stamp act such as the Maharashtra Stamp Act, 1958, The Karnataka Stamp Act, 1957
What are the two types of property transfers in India?
The two types of property transfer in India are
- Voluntary transfer in which the owner willingly transfers the property to someone else by way of sale deed, lease, exchange, gift deed, will, mortgage etc.
- Involuntary transfer in which the owner is not willing but still has to proceed with property transfer maybe because of legal obligations.
What are the different types of transfer of property options available?
1) Sale deed
2) Gift deed
3) Relinquishment deed
4) Partition deed
5) Will
How to transfer property ownership using a sale deed?
This is the most important document when it comes to property ownership as this contains the information of who the property belongs to and is legally verified. This includes details such as seller of the property, details about the property etc. This document is important to prove ownership of a property and sell a property.
- Once the seller and buyer agree on the value of the property and the token money is paid, the next step is to draft the agreement of sale.
- Once the buyer does his due diligence and verifies the property documents with the help of a lawyer, the sale deed is drafted.
- Next, stamp duty and registration fees for the sale deed has to be paid to the IGR of the respective state. This fee is paid by the buyer and this is mandatory as this aids in legal registration of the property in the buyer’s name.
- The mutation process is done where the name of the new buyer is mentioned in the property document and this information is updated in the municipal body records. This document is important because once the ownership is transferred, utility bills, property tax bills etc. will be borne by the new owner. Also, the mutation document shows the link of all the previous owners of the property (if any) and is a valid legal document in case of a legal dispute.
- In case of a resale property, check the rules of the housing society and pay the transfer fees. The previous owner has to ensure that all dues towards the society have been paid, else the society will not issue the NOC for transfer of property ownership.
How to transfer ownership of property using a gift deed?
- Once the donor gives the property, it is very difficult to revoke the gift deed.
- The donor and donee should be clear on the property that will be gifted.
- Draft the gift deed in such a way that there are clauses that will aid the donor to revoke it in case of any problem. For instance, old parents through gift deeds give away property to their children and have no one to take care of them.
- The donor should then draft the gift deed and pay the stamp duty and registration charges on the gift deed. Note that since it’s a gift, the donor has to pay the stamp duty and registration charges for this. However, since it’s a gift, the various Indian states offer a rebate on stamp duty and registration in case it’s being gifted to a blood relative.
- Once paid, get the documents verified at the sub-registrar’s office.
- The donee has to accept the gift in the lifetime of the donor who has executed the gift deed. Failure to do so will result in the gift deed becoming invalid.
How to transfer property ownership using relinquishment deed?
- A relinquishment deed can be used to transfer ownership of property only in case of properties that are inherited.
- These can be both properties that are ancestral and on which you have right by birth under the Hindu law and the self-acquired property of your father. Also known as a release deed, this is used in the absence of a will and the owner of the property has died.
- Another point to note is only the property’s co-owners can relinquish their share. Like in case of gift deed, a registered relinquishment deed is irrevocable under normal circumstances.
- A relinquishment deed has to be stamped and registered for it to be legally valid.
- On a stamp paper of Rs 100, all details of the relinquishment deed must be drafted clearly.
- Next visit the SRO with property documents, witness, relinquishment deed.
- The registration for the relinquishment deed fee varies between Rs 100 and Rs 250. Once the SRO approves the deed will be registered in a week.
How to transfer property through a will deed?
Governed under the Indian Succession Act, 1925, Section 2 (H), a will is the legal declaration of a testator’s intention regarding his property that he wants to execute after his death. A will clearly mentions the person who will inherit the assets that will belong to the testator.
How to transfer property through partition deed?
This legal document is executed when a common property is being divided among family members so that they get their share of the property. Once the partition deed is executed and registered, every member is an independent owner of the property and he can rent, sell or gift his share of the property.
What are the documents required for transfer of ownership of property?
1) Aadhaar Card
2) Original sale deed
3) NOC from all required people
4) Latest property card
5) Property tax bill
6) Electricity bill
7) Construction completion certificate
8) Encumbrance certificate
9) Photograph of buyer and seller
Importance of property mutation
After the transfer of property ownership, the ex-owner should ensure that the new homebuyer completes the property mutation property at the earliest. Once mutation is done and the property’s new owner records are updated with the municipal body, the utility bills, property tax bills etc. will be sent to the new owner. Absence or delay of this will result the old owner getting these bills.
One can visit the property tax website of a state and apply for mutation of property online. This can also be done offline. A fee ranging between Rs 25 to Rs 100 will be charged for this process and mutation is done in 15 days of filing the application unless an objection is raised by someone.
Housing.com POV
Transfer of property ownership in India starts with due diligence and payment of stamp duty and registration charges. It is important that legally all documents have to be registered so that there is no dispute arising on who the owner of the property is.
FAQs
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