There is a flat owned by three brothers and one of them died recently. The property documents have his name. Can his legal heir execute that share as a gift deed to the other two brothers? Is gift deed the right option or will he have to use a release deed? Please advise.
—Milind Kulkarni
We have assumed that the deceased had one-third undivided right, title and interest in the subject property along with his brothers who have the balance undivided two-thirds interest. We have further assumed that the deceased, who is a co-owner in respect of the subject property, has died intestate and, therefore, the heirs of the deceased shall become entitled to “deceased interest" in the property.
Generally, gift deeds, by their nomenclature mean and indicate that there is no monetary consideration and the only consideration is love and affection between the family members of the deceased. So a gift deed can be executed by the legal heirs of the deceased if they transfer the deceased interest in favour of the other two co-owners, without any monetary consideration, but for a consideration, which is love and affection. The gift deed in such a situation is apt.
However, in case there is a monetary consideration involved between the legal heirs of the deceased and the other two co-owners, then it is advisable to prepare and execute a release deed, whereby the legal heirs will cede and relinquish the deceased interest in favour and unto the two co-owners.
Also, note that both gift deed and release deed will attract stamp duty for transferring or releasing the deceased interest, depending on the state in which the immovable property is situated. Certain states provide for concessional stamp duty for gifts between family members, which one must ideally check.
It is also mandatory to register a gift deed or release deed at the sub-registrar of assurances within whose jurisdiction the immovable property is situated. One gets four months’ time to register the deed, gift or release, from the date of the execution of the deed.
Aradhana Bhansali is partner, Rajani Associates.
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