A lot of time we have seen a situation whereby when a person dies intestate (i.e. without writing a testamentary will or a Will), the properties of the deceased would be automatically inherited by his legal heir. It is then up to the legal heir to do whatsoever pleases him with the property. If the legal heir decides not to keep the property for reasons best known to him, he can relinquish his share in favor of another person. The process of transferring the property of the deceased by a legal heir in favor of another person is known as “Relinquishment of Property”.
In India, the subject of relinquishment is very important. A lot of families are currently in court over disagreement resulting from the process of sharing a deceased family member’s properties. It is worthy to mention that these court cases would have been averted if the parties involved had the understanding of how the Relinquishment of Property works.
In view of the above, we will take you through what the Relinquishment Deed is all about, how it works, and how to register the deed so that it becomes a legal document. However, before delving properly into the main subject, it would not be out of place to clear the air on the major difference between a Relinquishment deed and a gift deed.
A Relinquishment deed is only valid if and only when the property relinquished is an inherited property. On the other hand, in a gift deed, the gifted property need not be an inherited property. Without further ado, let’s set the ball rolling on the subject matter.
MEANING OF RELINQUISHMENT DEED
A relinquishment deed is a legal instrument or document formalizing the process of releasing a legal heir’s right in an inherited property for another legal heir such as his sister, brother, daughter, son or mother. A Relinquishment in the actual sense means surrendering or abandoning of the rights, interest, title, by one co-owner to another co-owner of a property.
ESSENTIALS ELEMENTS OF A RELINQUISHMENT DEED
The following are the essential elements of a relinquishment deed;
- Legal document: A relinquishment deed is a legal instrument which an heir can leverage to transfer or release his legal right of an inherited property to another person.
- Consequences: The effects of such transfer of rights are the release of the share of one co-owner and the enlargement of the shares of the other co-owners.
- Irrevocable: A relinquishment deed cannot be canceled even though it was made in error. For the relinquishment deed to be valid, the relinquished property must be inherited by more than one person.
- Relinquishment cannot be done in favor of a 3rd third party: By law, a relinquished property can only be transferred to a co-owner and not a third party, otherwise, the transaction would be treated as a gift.
- Must be in writing: The relinquishment of an immovable property must be done through a written document (relinquishment deed) and signed by the parties involved in the presence of at least two (2) witnesses.
- Must be registered: Under Section 17 of the 1908 Registration Act, it is mandatory that a relinquishment deed must be registered for it to be valid. The registration must be done at the office of the Sub-Registrar closest to the property.
- Consideration: A relinquishment deed can be registered without any consideration
- Easy process: The process of registering a relinquishment deep is simple, easy, and affordable. Usually, it takes just a few days to complete the registration.
WHO CAN RELINQUISH A PROPERTY?
Relinquishing a property can only be done by someone who has a legal share in the property. In a situation where there is more than one legal heir, either of the legal heirs can do the relinquishment. For a relinquishment to be valid, you must comply with the essentials of a valid contract, rather than the compensation.
DIFFERENCE BETWEEN RELINQUISHMENT DEED AND GIFT DEED
|1. Relinquishment Deed is a deed by which one person releases or transfer his legal right to the property.
|Gift Deed is a deed by which one person gifts his legal rights in the property to any person
|2. The property relinquished is always an inherited property.
|The property gifted need not to be inherited property.
|3. The person in whose favor the property is relinquished must be the co-owner of the property.
|The person in whose favor the property is gifted can be anyone.
|4. Relinquishment may or may not require compensation. (Something in return)
|A gift does not require any compensation
REGISTRATION OF A RELINQUISHMENT DEED
Since a relinquishment deed is a legal document or instrument which formalizes the process of releasing a legal heir’s right in an inherited property for another legal heir such as his sister, brother, daughter, son or mother, it must be registered and executed in line with Section 17 of the Registration Act, 1908.
We advise that you consult an experienced lawyer for the purpose of registering a relinquishment deed. However, the registration process is simple and straightforward. The following procedures are required to register a relinquishment deed:
- The Relinquishment Deed is drafted or prepared by a legal expert
- Stamp Paper is purchased for the execution
- A date is fixed for the registration in the Sub-Registrar office
- The Government registration fee is paid
- Both the parties and 2 witnesses visit the Sub-Registrar office on the scheduled date for the registration of Release Deed
- Registered Relinquishment Deed is collected after a week
Every Union Territory and States in India has their own mandated rates of registering a deed of relinquishment; hence the cost differs from state to state. However, it is important that when such relinquishment deed is being registered, the parties need to pay the necessary stamp duty as prescribed by the individual states calculated on the value of the part of the property being relinquished only. For example, in New Delhi, registration of a relinquishment deed cost about Rs. 1000 plus another Rs. 100 for pasting fee.
WHAT TO INCLUDE IN A RELINQUISHMENT DEED?
The following are what should be included in a relinquishment deed;
- Introduction and Title: A deed of relinquishment should have an introduction with the words “Relinquishment Deed or Deed of Relinquishment” alongside the date of creation.
- Stating the Executants or Releasors: When drafting a relinquishment deed, it is important to state the Executants or Releasors. The Executants is the person that makes the deed of relinquishment. He is the direct legal heir to an inherited property. The entire Executants’ details such as full name, address, husband/wife’s name should be stated.
- Stating the Releasee: The Releasee is the beneficiary of an Executants’ right/share/titles. When drafting a deed of relinquishment, it is important to state the Releasee’s details such as full name, address, husband or wife’s name.
- Description of the property: A good deed of relinquishment must state a full description of the property. It is also important to state the last absolute owner of the property. The details of the property to capture are address, registration details, survey number, and Sub-Registrar office details like book number, volume number, and office name.
- Purpose: The exact purpose of the deed of relinquishment should be stated in the document. Had it been that the rightful owner of the property left a Will, there won’t have been a need for a deed for relinquishment. Sharing the properties would be relatively easier if a Will is available. However, if the rightful owner died intestate, the actual reason for a relinquishment deed should then be stated.
- Heir Details: All heirs legally entitled to that property should be clearly mentioned in the document. Such details as age, address, name, and relationship to the deceased owner should be clearly outlined.
- Share details: The shares held by all the heirs should also be clearly spelt out to avoid ambiguity. The proportion of each heir’s holding should be indicated in the deed of relinquishment.
- Relinquishment: One important clause you must pay attention to when drafting a relinquishment deed is the statement of the executants releasing their shares in the property in favour of the release without any financial transaction. The property’s description should once again be stated together with a declaration that the executant shall have no right to the property after the deed of relinquishment is completed.
- Signatures: The deed of relinquishment shall be signed by all the parties involved in the presence of at least two witnesses at the office of the Sub-Registrar closest to the location where the said property is located.
IS IT POSSIBLE TO REGISTER A DOCUMENT AT A PERSON’S PRIVATE RESIDENCE?
In line with Section 31 of the Registration Act, the Registering Officer has been empowered to register a relinquishment deed in the private residence of persons provided the parties involved are physically handicapped. Otherwise, the registration is meant to take place only at the office of the Sub-Registrar.