INHERITANCE
OF PROPERTY
OF PROPERTY
What is Inheritance of
Property?
Property?
Inheritance is passing
on the property, titles, debts, rights, and obligations to another person upon
the death of an individual.
on the property, titles, debts, rights, and obligations to another person upon
the death of an individual.
Which Act governs
Inheritance Law in India?
Inheritance Law in India?
The Hindu Succession
Act, 1956 was established to assure equal inheritance rights to both sons and
daughters.
Act, 1956 was established to assure equal inheritance rights to both sons and
daughters.
It implements to all
Hindus inclusive of Buddhists, Sikhs, and Jains but won’t refer to a Hindu
wedded to a Non-Hindu under the Special Marriages Act.
Hindus inclusive of Buddhists, Sikhs, and Jains but won’t refer to a Hindu
wedded to a Non-Hindu under the Special Marriages Act.
It provides a basic play
as to how to deal with inherited.
as to how to deal with inherited.
How can one inherit a
Property?
Property?
As per Inheritance Law
in India a person can inherit property in two ways:
in India a person can inherit property in two ways:
1. Through Will
2. Through state
laws of Intestate Succession
laws of Intestate Succession
Who inherits the
property if a Hindu Male dies intestate?
property if a Hindu Male dies intestate?
As per the law,
ownership of a Male Hindu who dies intestate is divided among his heirs.
ownership of a Male Hindu who dies intestate is divided among his heirs.
The division among heirs
has to take place as per a particular rule.
has to take place as per a particular rule.
First the Class I Heirs
share the assets among themselves (one share each).
share the assets among themselves (one share each).
If the departed person
doesn’t have a Class I heirs, then The Class II Heirs are entitled to share the
concerned property.
doesn’t have a Class I heirs, then The Class II Heirs are entitled to share the
concerned property.
If there is no heir,
then the property is divided among Agnates (descendant or akin through male’s
side) and then among Cognates (blood relative or descended from a common
maternal ancestor).
then the property is divided among Agnates (descendant or akin through male’s
side) and then among Cognates (blood relative or descended from a common
maternal ancestor).
If there is no heir or
relative to claim the property, it passes on to the Government by way of
Escheat. In such a case, the government attains all the rights related to the
assets along with the duty to fulfil all the obligations attached to the
assets.
relative to claim the property, it passes on to the Government by way of
Escheat. In such a case, the government attains all the rights related to the
assets along with the duty to fulfil all the obligations attached to the
assets.
Classification of Heirs
in Class I and Class II
in Class I and Class II
Class I Heirs –
The intestate’s widow
The surviving sons and
daughters
daughters
The mother of the
intestate
intestate
The heirs in the branch
of every pre-deceased son or daughter of the intestate
of every pre-deceased son or daughter of the intestate
Class II Heirs –
The father of the
intestate
intestate
The intestate’s
grand-parents and the grand-children
grand-parents and the grand-children
The brother or sister of
the deceased
the deceased
Other relatives such as
father’s brother/sister, mother’s brother/sister, brother’s widow/son/daughter
or sister’s son/daughter, etc.
father’s brother/sister, mother’s brother/sister, brother’s widow/son/daughter
or sister’s son/daughter, etc.
Who inherits the
property if a Hindu Female dies intestate?
property if a Hindu Female dies intestate?
The ownership of a
Female Hindu dying intestate shall be divided as per following rules:
Female Hindu dying intestate shall be divided as per following rules:
- first among the sons and daughters (including the
children of any pre-deceased son/daughter) and the husband - then amongst the heirs of the husband
- then among the mother and father
- then amongst the heirs of the father
- then among heirs of the mother
What are the rights of
Female as per Inheritance Law in India?
Female as per Inheritance Law in India?
As per the Inheritance
Law in India, the Females have the following rights:
Law in India, the Females have the following rights:
- equal right of inheritance to their father’s property
as sons - to receive a share in mother’s property
- have to bear the same liability for the property as the
son - to dispose of the property inherited or gifted by
selling, gifting or willing to others as she deems fit
What to do once you
inherit property in India:
inherit property in India:
Step 1: Legal transfer
of property ownership on your name
of property ownership on your name
The first thing you need
to ensure is to get it transferred in your name when you inherit property
ownership. In a case when it is a movable property, which may include bank
balances and securities, it should also be transferred in the name of the
beneficiary.
to ensure is to get it transferred in your name when you inherit property
ownership. In a case when it is a movable property, which may include bank
balances and securities, it should also be transferred in the name of the
beneficiary.
While, in a case of
immovable property, it should be transferred and mutated in the name of the
recipient in the relevant government department or revenue records which depend
upon the nature of the estate (commercial, residential and agricultural)?
immovable property, it should be transferred and mutated in the name of the
recipient in the relevant government department or revenue records which depend
upon the nature of the estate (commercial, residential and agricultural)?
A land can only be
transferred if you have substantial proof to claim your inheritance. When a
person dies with leaving behind a Will, his executors need to administer the
estate as per his/her wishes set out in the Will, provided the same are not
contrary to law.
transferred if you have substantial proof to claim your inheritance. When a
person dies with leaving behind a Will, his executors need to administer the
estate as per his/her wishes set out in the Will, provided the same are not
contrary to law.
When there is no Will,
there is a chance of arising many problems. In such cases, the legal heirs of
the person can choose amongst themselves at least one administrator who then
acquires Letters of Administration to the assets of such person.
there is a chance of arising many problems. In such cases, the legal heirs of
the person can choose amongst themselves at least one administrator who then
acquires Letters of Administration to the assets of such person.
The distribution can be
chosen or decided mutually or can also be settled by the court. All the legal
beneficiaries can pass on their rights commonly to a sole heir or another
person.
chosen or decided mutually or can also be settled by the court. All the legal
beneficiaries can pass on their rights commonly to a sole heir or another
person.
In the situation of the
absence of a Will, the relevant succession laws come into effect.
absence of a Will, the relevant succession laws come into effect.
So, for instance,
According to the Hindu succession law in India, if a Hindu man leaves behind
assets without making a Will, it is initially passed on to Class I heirs (which
include the widow, mother and children) in equal share. If there are no any Class
I heirs, Class II heirs (which include father, brother, grandchildren, sister
and few other relatives) can claim the estate.
According to the Hindu succession law in India, if a Hindu man leaves behind
assets without making a Will, it is initially passed on to Class I heirs (which
include the widow, mother and children) in equal share. If there are no any Class
I heirs, Class II heirs (which include father, brother, grandchildren, sister
and few other relatives) can claim the estate.
While in case, if the
owner is a Hindu woman, her husband and children become equal shareholders of
all the assets. However, if none of them is present, all assets go to the legal
heirs of her husband, to her mother and father, so on. Thus, if a Hindu woman
wishes the belongings to go to her sister, then she has to say so in her Will.
owner is a Hindu woman, her husband and children become equal shareholders of
all the assets. However, if none of them is present, all assets go to the legal
heirs of her husband, to her mother and father, so on. Thus, if a Hindu woman
wishes the belongings to go to her sister, then she has to say so in her Will.
One must remember that
one can only pass on the real estate as per his/her wish if the real estate was
only through self-acquired and not inherited.
one can only pass on the real estate as per his/her wish if the real estate was
only through self-acquired and not inherited.
Step 2 : Get Property
Ownership Documents or Title of the land
Ownership Documents or Title of the land
When the beneficiaries
and their shares, rights and liabilities are decided, the land has to be
transferred in their names. For this situation, you need to apply for transfer
of property at the sub registrar’s office. In most of the times, documents
required can be Will or Will with probate and succession certificate.
and their shares, rights and liabilities are decided, the land has to be
transferred in their names. For this situation, you need to apply for transfer
of property at the sub registrar’s office. In most of the times, documents
required can be Will or Will with probate and succession certificate.
To concern with the
assets, the property ownership documents of movable and immovable assets are
also required. In the absence of a Will, you may also need to
prepare an affidavit, along with a no-objection certificate (NOC) from the
other legal heirs or their successors.
assets, the property ownership documents of movable and immovable assets are
also required. In the absence of a Will, you may also need to
prepare an affidavit, along with a no-objection certificate (NOC) from the
other legal heirs or their successors.
Once property gets
transferred in your name, the next important task is to apply for mutation of
land or title of the land. It is required to be done to record the transfer of
a title of immovable property from one individual to another in the land records.
transferred in your name, the next important task is to apply for mutation of
land or title of the land. It is required to be done to record the transfer of
a title of immovable property from one individual to another in the land records.
Mutation of estate
records takes place at the local municipal authority office in whose
jurisdiction the inherited property is located. In the mutation process,
required documents and fees differ from state to state in India.
records takes place at the local municipal authority office in whose
jurisdiction the inherited property is located. In the mutation process,
required documents and fees differ from state to state in India.
When you inherit property,
besides proving your claim or rights, the other vital thing is to have clear
ownership evidence of the estate. If proper all required documents are
available, the transfer process becomes easier, but in a situation, when it is
an ancestral property and ownership of property records are not available, the
job can become difficult.
besides proving your claim or rights, the other vital thing is to have clear
ownership evidence of the estate. If proper all required documents are
available, the transfer process becomes easier, but in a situation, when it is
an ancestral property and ownership of property records are not available, the
job can become difficult.
In such case, one needs
to trace the title of the land. Initially, you should find out whether any
consideration was paid by the deceased in acquiring the land and make out a
claim based on the evidence available together with the details of the
consideration paid. Take help or guidance of a legal adviser or a lawyer.
to trace the title of the land. Initially, you should find out whether any
consideration was paid by the deceased in acquiring the land and make out a
claim based on the evidence available together with the details of the
consideration paid. Take help or guidance of a legal adviser or a lawyer.
Step 3 : Liabilities
Given the high capital
values of properties, most are bought with the aid of home loans. Thus, what
happens if you inherit a property that has an outstanding home loan?
values of properties, most are bought with the aid of home loans. Thus, what
happens if you inherit a property that has an outstanding home loan?
Whatever assets you
inherit, you do so with clogs, mortgages, disputes and so on. Thus, if there is
an outstanding home loan against the land, it also gets passed on to the
inheritor. Apart from this, mortgaged property can be transferred only with the
written consent of the lender.
inherit, you do so with clogs, mortgages, disputes and so on. Thus, if there is
an outstanding home loan against the land, it also gets passed on to the
inheritor. Apart from this, mortgaged property can be transferred only with the
written consent of the lender.
It means, if a person
passes away while the home loan was still running on the belongings that have
to be bequeathed to the beneficiary—who might be the children or spouse of the
deceased—they will have to pay the outstanding loan. However, if home loan
insurance was taken, the insurer pays the outstanding loan to the lender.
passes away while the home loan was still running on the belongings that have
to be bequeathed to the beneficiary—who might be the children or spouse of the
deceased—they will have to pay the outstanding loan. However, if home loan
insurance was taken, the insurer pays the outstanding loan to the lender.
In such situations, once
installment is made by the insurer, you should collect the loan clearance
certificate from the lender and all the original documents of the land that
were given to the lender to avail the loan.
installment is made by the insurer, you should collect the loan clearance
certificate from the lender and all the original documents of the land that
were given to the lender to avail the loan.
If the land you inherit
has been let out, you become obliged to adhere to the lease agreement signed by
the lessee and the lessor. Similarly, if there is any dispute related to the
estate or if there is any litigation which involves the land, you also become
part of it.
has been let out, you become obliged to adhere to the lease agreement signed by
the lessee and the lessor. Similarly, if there is any dispute related to the
estate or if there is any litigation which involves the land, you also become
part of it.
Lease agreements with
the consent of the lessor would be inheritable. In civil litigation, the heirs
of the deceased are brought on record in place of the deceased with all his
rights and obligations.
the consent of the lessor would be inheritable. In civil litigation, the heirs
of the deceased are brought on record in place of the deceased with all his
rights and obligations.
No doubt, inheriting a
property is not a regular incident. Therefore, one should take care to have all
details in place. Only possession of property does not make you a legal owner;
a proper transfer is a must. Thus, If needed, do take legal advice and help to
get the inherited land transferred in your name.
property is not a regular incident. Therefore, one should take care to have all
details in place. Only possession of property does not make you a legal owner;
a proper transfer is a must. Thus, If needed, do take legal advice and help to
get the inherited land transferred in your name.
Probate : What is it?
The entire probate
process deals with the distribution of properties and assets by the court. If
there is a will, the distribution is done according to the provisions in the
will. If there is no will, the court decides how distribution is done. While
there are certain types of inheritance that can avoid probate, such as
beneficiary designations for 401 ks and life insurance policies, trusts, and
assets jointly owned, most real estate properties often must pass through
probate.
process deals with the distribution of properties and assets by the court. If
there is a will, the distribution is done according to the provisions in the
will. If there is no will, the court decides how distribution is done. While
there are certain types of inheritance that can avoid probate, such as
beneficiary designations for 401 ks and life insurance policies, trusts, and
assets jointly owned, most real estate properties often must pass through
probate.
Other types of properties
that will be required to pass through probate include cash assets and cash
accounts solely owned by the decedent, personal property such as jewelry, cars,
valuable artwork, and assets that allow the naming of beneficiaries,
such as insurance policies where none have been named.
that will be required to pass through probate include cash assets and cash
accounts solely owned by the decedent, personal property such as jewelry, cars,
valuable artwork, and assets that allow the naming of beneficiaries,
such as insurance policies where none have been named.
The 4-Step Probate Process
File petition and give
notice
notice
The first step is to
file a petition in court to admit the will or appoint an administrator for the
estate if there is no will. The court then issues a notice of hearing to all
interested parties such as the decedent’s heirs, beneficiaries, creditors and any
other party who has an interest in the decedent’s estate.
file a petition in court to admit the will or appoint an administrator for the
estate if there is no will. The court then issues a notice of hearing to all
interested parties such as the decedent’s heirs, beneficiaries, creditors and any
other party who has an interest in the decedent’s estate.
Inventory of estate
properties
properties
The court may
appoint an appraiser to conduct an inventory and appraisal of all assets,
including cash and cash accounts, bonds,stocks, business interests, personal
and real estate properties.
appoint an appraiser to conduct an inventory and appraisal of all assets,
including cash and cash accounts, bonds,stocks, business interests, personal
and real estate properties.
Payment of Taxes and
Other Liabilities
Other Liabilities
Once the estate has been
appraised, the representative or executor determines which creditor claims are
legitimate so the estate can start payments. This is also the stage where properties
may be sold to pay off medical and funeral expenses, overdue real estate taxes,
and other liabilities.
appraised, the representative or executor determines which creditor claims are
legitimate so the estate can start payments. This is also the stage where properties
may be sold to pay off medical and funeral expenses, overdue real estate taxes,
and other liabilities.
Transfer of Titles
Once all debts and
liabilities are settled, the representative may petition the court
to transfer the remaining properties to the decedent’s heirs, as provided for
in the will or by law.
liabilities are settled, the representative may petition the court
to transfer the remaining properties to the decedent’s heirs, as provided for
in the will or by law.
This can only be done
after the waiting period for filing of claims by creditors has expired. Once
the court grants this petition, the representative may start drawing up deeds
for the transfer of real estate and personal property, stocks and bonds, and
transfer the properties to the heirs.
after the waiting period for filing of claims by creditors has expired. Once
the court grants this petition, the representative may start drawing up deeds
for the transfer of real estate and personal property, stocks and bonds, and
transfer the properties to the heirs.
Probate can be a costly
and time-consuming process for all parties involved but it is necessary before
assets can be distributed to beneficiaries. Heirs are likely to spend on court
fees, appraisal fees, and attorney fees. Depending on the size of the estate
and the state where the deceased lived, the entire probate process can take
between four months to two years to be completed.
and time-consuming process for all parties involved but it is necessary before
assets can be distributed to beneficiaries. Heirs are likely to spend on court
fees, appraisal fees, and attorney fees. Depending on the size of the estate
and the state where the deceased lived, the entire probate process can take
between four months to two years to be completed.
Dealing with Probate
Properties : First Steps
Properties : First Steps
Heirs to a decedent’s
estate are required to comply with certain requirements to formally inherit the
property, whether they plan to keep the property or sell it. For real and
personal properties that are inherited, heirs may be required to pay for
estate, inheritance, and other taxes. It is therefore important that as early
as possible, you procure the necessary documents such as bank account
statements, copies of the will, information on stocks, bonds and other
investment accounts. It is also important to compile a list of legal heirs,
creditors and other names who may have an interest in the estate to help the
court speed up the probate process.
estate are required to comply with certain requirements to formally inherit the
property, whether they plan to keep the property or sell it. For real and
personal properties that are inherited, heirs may be required to pay for
estate, inheritance, and other taxes. It is therefore important that as early
as possible, you procure the necessary documents such as bank account
statements, copies of the will, information on stocks, bonds and other
investment accounts. It is also important to compile a list of legal heirs,
creditors and other names who may have an interest in the estate to help the
court speed up the probate process.
Should you sell
inherited property?
inherited property?
Selling the property has
its pros and cons. For one, not all states provide a tax exclusion for the sale
of inherited properties. In most states, a tax exclusion is only available if
you are selling an inherited home that you have lived in for two years prior to
the sale.
its pros and cons. For one, not all states provide a tax exclusion for the sale
of inherited properties. In most states, a tax exclusion is only available if
you are selling an inherited home that you have lived in for two years prior to
the sale.
However, heirs are also
given the benefit of a stepped up basis when they sell inherited property. The
stepped up basis depends on the fair market value of the property at the time
of death, as opposed to the original purchase price paid by the decedent. The
stepped up basis is the difference between the two, and this value is
considered the capital gain and therefore the value that is subject to tax.
given the benefit of a stepped up basis when they sell inherited property. The
stepped up basis depends on the fair market value of the property at the time
of death, as opposed to the original purchase price paid by the decedent. The
stepped up basis is the difference between the two, and this value is
considered the capital gain and therefore the value that is subject to tax.
If you do decide to live
in the property for two years before selling it, you become eligible for
capital gains exclusions, which is $250,00 for individual taxpayers and
$500,000 for married couples who file jointly.
in the property for two years before selling it, you become eligible for
capital gains exclusions, which is $250,00 for individual taxpayers and
$500,000 for married couples who file jointly.
If you have enough
liquid assets to support a second property, experts recommend waiting before
making the decision to sell the inherited property. Doing so can help you make
avoid emotional decisions. The time can also be useful for doing maintenance
and repairs if you, later on, decide to rent the place instead. This option can
be the ideal solution if you need additional passive income.
liquid assets to support a second property, experts recommend waiting before
making the decision to sell the inherited property. Doing so can help you make
avoid emotional decisions. The time can also be useful for doing maintenance
and repairs if you, later on, decide to rent the place instead. This option can
be the ideal solution if you need additional passive income.
Tips for Quickly Dealing
with Inheritance Estates
with Inheritance Estates
Your lawyer can help you
make the best decision when it comes to dealing with inherited estates. For
one, if accepting the property can cost you more than it’s worth, you can always
refuse the inheritance. This is the primary option for heirs who do not want to
deal with the property at all. You can do this by executing a disclaimer that
you then submit to the representative of the estate or file with the probate
court handling the probate proceedings.
make the best decision when it comes to dealing with inherited estates. For
one, if accepting the property can cost you more than it’s worth, you can always
refuse the inheritance. This is the primary option for heirs who do not want to
deal with the property at all. You can do this by executing a disclaimer that
you then submit to the representative of the estate or file with the probate
court handling the probate proceedings.
Another option is short
sales. Homes with attached liens that are greater than the market value of the
house may be disposed of through a short sale with the lender or quick sale
buyers.
sales. Homes with attached liens that are greater than the market value of the
house may be disposed of through a short sale with the lender or quick sale
buyers.
Advantages of Selling an
Inherited Property
Inherited Property
There are many
advantages to selling a house or any other piece of real estate. There could be
more than one heir and they do not agree on how to divide the property. Selling
is one way to avoid conflict and disagreement among heirs. Selling the property
is also a way to avoid spending more on holding and maintenance costs, taxes
and mortgage payments. Inherited properties tend to come with needed repairs
and maintenance which the heirs may not be interested to attend to or spend on.
Selling the property is one way to avoid these expenses. There are some cases
when selling the property may be part of the decedent’s will, which is enough
reason to put it up for sale.
advantages to selling a house or any other piece of real estate. There could be
more than one heir and they do not agree on how to divide the property. Selling
is one way to avoid conflict and disagreement among heirs. Selling the property
is also a way to avoid spending more on holding and maintenance costs, taxes
and mortgage payments. Inherited properties tend to come with needed repairs
and maintenance which the heirs may not be interested to attend to or spend on.
Selling the property is one way to avoid these expenses. There are some cases
when selling the property may be part of the decedent’s will, which is enough
reason to put it up for sale.
At the end of the day,
any decision regarding inherited property of considerable value must be done
with ample thought and preparation. Allowing some time to pass before making
any major decisions, such as putting the property up for sale is ideal so that
you can make the decision with a clear head and with a good idea of what to
expect, whether you decide to keep the property or sell it. Your lawyer can
help you in the process of fulfilling the legal requirements for succession and
in making the decisions concerning your ownership of the inherited property. He
or she can also help you through the legal process of probate to ensure that it
goes as smoothly as possible.
any decision regarding inherited property of considerable value must be done
with ample thought and preparation. Allowing some time to pass before making
any major decisions, such as putting the property up for sale is ideal so that
you can make the decision with a clear head and with a good idea of what to
expect, whether you decide to keep the property or sell it. Your lawyer can
help you in the process of fulfilling the legal requirements for succession and
in making the decisions concerning your ownership of the inherited property. He
or she can also help you through the legal process of probate to ensure that it
goes as smoothly as possible.
Inherited Property –
Check out 5 Imp Points before Purchase
Check out 5 Imp Points before Purchase
1. Details of
Inheritance : As a buyer, the
first step is to understand the inheritance process i.e. how the seller inherited
property. I love to quote an example. In the recent case of the client from
Maharashtra, the seller gets his name updated in the records of the
co-operative society. He shared NOC from his siblings for inherited property.
It is not the right process. At the macro level, the seller can get the title
of inherited property transferred either through succession certificate or
probate. I will not get into nitty gritty of the same. It is advisable to take
all details from the seller. You can consult a lawyer whether the proper
process is being followed or not.
Inheritance : As a buyer, the
first step is to understand the inheritance process i.e. how the seller inherited
property. I love to quote an example. In the recent case of the client from
Maharashtra, the seller gets his name updated in the records of the
co-operative society. He shared NOC from his siblings for inherited property.
It is not the right process. At the macro level, the seller can get the title
of inherited property transferred either through succession certificate or
probate. I will not get into nitty gritty of the same. It is advisable to take
all details from the seller. You can consult a lawyer whether the proper
process is being followed or not.
Once the buyer is
assured that correct process is being followed, he can capture all these
details in his sale deed with the seller.
assured that correct process is being followed, he can capture all these
details in his sale deed with the seller.
2. Indemnity : To further safeguard his financial
interests, a buyer can include an indemnity clause in the sale deed specific to
the inherited property. The crux of this clause will be that in the case of any
future dispute on inherited property, the seller indemnifies the buyer. The
terms and conditions of this clause can be mutually decided between buyer and
the seller. In the case of any doubt or high perceived risk, you can also
execute a separate indemnity bond in the court.
interests, a buyer can include an indemnity clause in the sale deed specific to
the inherited property. The crux of this clause will be that in the case of any
future dispute on inherited property, the seller indemnifies the buyer. The
terms and conditions of this clause can be mutually decided between buyer and
the seller. In the case of any doubt or high perceived risk, you can also
execute a separate indemnity bond in the court.
3. Confirming Witness : A buyer can insist on including all the
legal heirs of the deceased as confirming witness. In short, all legal heirs
should be signatory as a confirming witness in the sale deed. It is important
to make the sale deed 100% fool proof. In future, none of the legal heirs can
stake any claim on the property. Though it will be an operational nightmare for
a seller but you can clarify this point before closing the deal. If the seller
is hesitant and is not able to share any logical reason then there is every
reason to doubt.
legal heirs of the deceased as confirming witness. In short, all legal heirs
should be signatory as a confirming witness in the sale deed. It is important
to make the sale deed 100% fool proof. In future, none of the legal heirs can
stake any claim on the property. Though it will be an operational nightmare for
a seller but you can clarify this point before closing the deal. If the seller
is hesitant and is not able to share any logical reason then there is every
reason to doubt.
4. Token Money : If there is a dispute on the inherited
property then seller demand high % of the token money. On the other hand, the
buyer should pay bare minimum token money. Reason being, if the buyer is not
satisfied with the title of the inherited property then his money should not
get stuck. If the seller demands high % of token money then it is first red
flag for the buyer. Secondly, in the case of dispute seller will be in a hurry
to sell the property. Therefore, you should be extra cautious to pay token
money for the inherited property.
property then seller demand high % of the token money. On the other hand, the
buyer should pay bare minimum token money. Reason being, if the buyer is not
satisfied with the title of the inherited property then his money should not
get stuck. If the seller demands high % of token money then it is first red
flag for the buyer. Secondly, in the case of dispute seller will be in a hurry
to sell the property. Therefore, you should be extra cautious to pay token
money for the inherited property.
5. Court Case : All said and done, sometimes the dispute
is from unknown quarters. For example, in one of the scenarios the deceased
person had availed a loan from his one of friends. After he died, there was NO
dispute among legal heirs but they refused to clear the loan of deceased. The
friend of deceased filed a court case to recover his dues from the sale proceed
of property. On the other hand, the legal heirs had a tacit understanding to
dispose of the inherited property hurriedly. Though it unlikely scenario but
there is a possibility. In such cases, a buyer can hire a lawyer to check
whether there is pending litigation against the inherited property.
is from unknown quarters. For example, in one of the scenarios the deceased
person had availed a loan from his one of friends. After he died, there was NO
dispute among legal heirs but they refused to clear the loan of deceased. The
friend of deceased filed a court case to recover his dues from the sale proceed
of property. On the other hand, the legal heirs had a tacit understanding to
dispose of the inherited property hurriedly. Though it unlikely scenario but
there is a possibility. In such cases, a buyer can hire a lawyer to check
whether there is pending litigation against the inherited property.
Words of Wisdom : For any property transaction, it is imp to
understand the history of property transfer. Typically inherited property is
close to the heart of a seller. It is sold to fulfill family settlement reached
between all the legal heirs. In case you are buying from multiple sellers i.e.
2 or more sellers based on succession certificate/probate. It is not necessary
that all the sellers will have an equal stake in the property. You should only
pay in the proportion of ownership as per succession certificate or probate.
Last but not the least, the buyer should be beware of counterfeit documents
like succession certificate. You can check the authenticity of the documents
and retain the original ones if possible.
understand the history of property transfer. Typically inherited property is
close to the heart of a seller. It is sold to fulfill family settlement reached
between all the legal heirs. In case you are buying from multiple sellers i.e.
2 or more sellers based on succession certificate/probate. It is not necessary
that all the sellers will have an equal stake in the property. You should only
pay in the proportion of ownership as per succession certificate or probate.
Last but not the least, the buyer should be beware of counterfeit documents
like succession certificate. You can check the authenticity of the documents
and retain the original ones if possible.
Though this post, i
covered five important points but as i always mention, each case is different.
If you are buying an inherited property then it is must to hire an experienced
property lawyer who guides you. The probability of fraud is high in such cases.
I hope no buyer would like to get trapped in a legal tangle.
covered five important points but as i always mention, each case is different.
If you are buying an inherited property then it is must to hire an experienced
property lawyer who guides you. The probability of fraud is high in such cases.
I hope no buyer would like to get trapped in a legal tangle.
Do we need the consent
of other co-owners to sell the share in an inherited property?
of other co-owners to sell the share in an inherited property?
According to the
Transfer of Property Act, every co-owner has a proprietary right of the entire
property. The sale has to be made with the consent of all co-owners. But if
there is an agreement that gives the co-owners exclusive rights to certain
parts/portions of the property, a co-owner can sell his portion.
Transfer of Property Act, every co-owner has a proprietary right of the entire
property. The sale has to be made with the consent of all co-owners. But if
there is an agreement that gives the co-owners exclusive rights to certain
parts/portions of the property, a co-owner can sell his portion.
However, if the dwelling
house is the subject matter of sale, then
house is the subject matter of sale, then
All co-owners who
jointly own the house must give their consent.
jointly own the house must give their consent.
The transferee does not
get the right to joint possession with other co-owners.
get the right to joint possession with other co-owners.
REAL ESTATE
The real estate market
is both tricky and unpredictable. Investing in real estate involves analyzing
all possible risk factors and taking sensible decisions based on these. In the
light of the unpredictability and vast gamut of options available, it becomes
slightly tough for NRIs to put their money in ventures because they are too far
away to be able to judge the credibility of projects where investment is
possible. NRI Legal Services offers invaluable assistance and expertise to buy
or sell real estate to individuals, corporates, real estate developers etc. The
company has competence in handling the full spectrum of real estate properties
since there is sound awareness of the most competitive costs and fees involved in
a transaction. Our experts make a constant endeavor to come up with practical,
constructive and innovative solutions for all property related issues. We
follow a professional, business oriented approach to ensure best possible
prices for our clients which is backed by our advantage of having an
understanding of the dynamics and volatility involved while investing in real
estate. The company makes sure that we give detailed information to the client
regarding risks, technicalities and legal considerations involved in the
transactions. Specifically, the scope of our services is related to the
following:
is both tricky and unpredictable. Investing in real estate involves analyzing
all possible risk factors and taking sensible decisions based on these. In the
light of the unpredictability and vast gamut of options available, it becomes
slightly tough for NRIs to put their money in ventures because they are too far
away to be able to judge the credibility of projects where investment is
possible. NRI Legal Services offers invaluable assistance and expertise to buy
or sell real estate to individuals, corporates, real estate developers etc. The
company has competence in handling the full spectrum of real estate properties
since there is sound awareness of the most competitive costs and fees involved in
a transaction. Our experts make a constant endeavor to come up with practical,
constructive and innovative solutions for all property related issues. We
follow a professional, business oriented approach to ensure best possible
prices for our clients which is backed by our advantage of having an
understanding of the dynamics and volatility involved while investing in real
estate. The company makes sure that we give detailed information to the client
regarding risks, technicalities and legal considerations involved in the
transactions. Specifically, the scope of our services is related to the
following:
Real Estate Services :
1. Identification of
buyer/seller.
buyer/seller.
2. Identification of a
suitable property as per the requirements of the client.
suitable property as per the requirements of the client.
3. Establishing title to
the property.
the property.
4. Ensuring that all
documents are properly executed and delivered.
documents are properly executed and delivered.
5. Preparing &
evaluating all the documents necessary to complete a transaction efficiently
& correctly.
evaluating all the documents necessary to complete a transaction efficiently
& correctly.
6. Negotiating, drafting
and reviewing sale and purchase agreements.
and reviewing sale and purchase agreements.
7. A thorough physical
inspection of the property in order to negotiate a better purchase price.
inspection of the property in order to negotiate a better purchase price.
8. Representation before
various authorities such as Sub Divisional Magistrate, Registrar, Courts etc.
various authorities such as Sub Divisional Magistrate, Registrar, Courts etc.
9. Repatriation advice,
tax advice and any other compliance advice.
tax advice and any other compliance advice.
4 Easy Steps For NRIs To
Sell Inherited Property In India
Sell Inherited Property In India
Step 1 : Transfer Title
of Property
of Property
After inheriting the
property from your ancestors, the first thing you must perform is transfer the
title of the said estate to your name. This can be achieved through the process
“Mutation of revenue records”. For this you need a copy of the will; in case
there is none, a Succession Certificate from a local court would also work.
property from your ancestors, the first thing you must perform is transfer the
title of the said estate to your name. This can be achieved through the process
“Mutation of revenue records”. For this you need a copy of the will; in case
there is none, a Succession Certificate from a local court would also work.
Step 2 : Get The
Required Legal Documents in Order
Required Legal Documents in Order
Here is a complete list
of all the documents you need to sell inherited property in India The original
Purchase agreement, i.e. Title document of said property.
of all the documents you need to sell inherited property in India The original
Purchase agreement, i.e. Title document of said property.
Original Share
Certificate, in case of a unit in a co-operative society.
Certificate, in case of a unit in a co-operative society.
No objections
certificate, issued by the said society.
certificate, issued by the said society.
A copy of the approved
plan and the occupation certificate issued by the concerned authority, a
municipal corporation.
plan and the occupation certificate issued by the concerned authority, a
municipal corporation.
Lawyer certificate, if
the seller does not possess the original documents mentioned above, a
certificate from his lawyer declaring that he is the rightful owner would be
required.
the seller does not possess the original documents mentioned above, a
certificate from his lawyer declaring that he is the rightful owner would be
required.
PAN number, it is
important to apply for a Tax Exemption Certificate under Section 197.
important to apply for a Tax Exemption Certificate under Section 197.
Step 3 : Identifying
Preferred Sales Method
Preferred Sales Method
To conduct the
transaction for sale, the NRI can either hire a professional company or he can
do it himself. These companies provide end-to-end solutions including buyer
identification, handling legal issues, due diligence and tax issues. But for
those services that they provide, they charge a fee, which is a percentage of
the sales’ consideration.
transaction for sale, the NRI can either hire a professional company or he can
do it himself. These companies provide end-to-end solutions including buyer
identification, handling legal issues, due diligence and tax issues. But for
those services that they provide, they charge a fee, which is a percentage of
the sales’ consideration.
Step 4 : Finalization Of
The Transaction
The Transaction
This can also be pointed
to as the actual sales process, and this can be further subdivided into the
following steps:
to as the actual sales process, and this can be further subdivided into the
following steps:
Identifying the sale
value to sell inherited property in India, if you have hired a firm, they would
provide you with the full data to determine the price like the value of similar
properties in the same place. If you carry out the transfer yourself, you need
similar data.
value to sell inherited property in India, if you have hired a firm, they would
provide you with the full data to determine the price like the value of similar
properties in the same place. If you carry out the transfer yourself, you need
similar data.
Managing structure of
the transaction, unlike the prevalent practice of using cash, which the NRIs do
not favour, one can easily sell inherited property in India without considering
the cash component.
the transaction, unlike the prevalent practice of using cash, which the NRIs do
not favour, one can easily sell inherited property in India without considering
the cash component.
Issue an admit power of
attorney, an Admit-PoA indicates that while the documents are being executed by
the owner, the PoA holder would merely represent him in the registration
office.
attorney, an Admit-PoA indicates that while the documents are being executed by
the owner, the PoA holder would merely represent him in the registration
office.
Tax issues, immovable
property sold after 3 years of purchase, is taxed at 20.6% in India. Moreover,
in the case of NRIs, it is essential for the buyer to deduct taxes at the
source, which is another set of complications for the NRIs to sell inherited
property in India.
property sold after 3 years of purchase, is taxed at 20.6% in India. Moreover,
in the case of NRIs, it is essential for the buyer to deduct taxes at the
source, which is another set of complications for the NRIs to sell inherited
property in India.
How do we transfer the
title?
title?
While title transfer
needs to be effected locally, within India where the immovable property is
situated, an NRI can execute it through a Power of Attorney (PoA). With regard
to the succession certificate, the NRI needs to hire a local professional (in
the area) to represent him/ her through the PoA.
needs to be effected locally, within India where the immovable property is
situated, an NRI can execute it through a Power of Attorney (PoA). With regard
to the succession certificate, the NRI needs to hire a local professional (in
the area) to represent him/ her through the PoA.
The PoA should be in
favour of the local representative/ professional, authorising him/ her to act
on behalf of the inheritor for specific actions of title transfer.
favour of the local representative/ professional, authorising him/ her to act
on behalf of the inheritor for specific actions of title transfer.
The PoA needs be duly
notarised by an attorney in the country of the NRI’s residence followed by
attestation at the nearest Indian consulate in the said country.
notarised by an attorney in the country of the NRI’s residence followed by
attestation at the nearest Indian consulate in the said country.
The PoA is then also
registered in India (via adjudication process) by paying the requisite
fees/stamp duty at the registrar’s office. Documents for transfer of inherited
property Documents needed to transfer the title of inherited property to be
shared with the legal authority (initially attested photocopies) include: h The
official registered Will. Though the Will needn’t be a registered document,
legal exper tsre c o m m e n d otherwise. It is better to register the Will as
one always tends to keep revising the registered Will at key junctions in the
transfer process.
registered in India (via adjudication process) by paying the requisite
fees/stamp duty at the registrar’s office. Documents for transfer of inherited
property Documents needed to transfer the title of inherited property to be
shared with the legal authority (initially attested photocopies) include: h The
official registered Will. Though the Will needn’t be a registered document,
legal exper tsre c o m m e n d otherwise. It is better to register the Will as
one always tends to keep revising the registered Will at key junctions in the
transfer process.
Documents for transfer
of inherited property
of inherited property
The heirs need to submit
documents such as death certificate of the deceased, the birth certificate of
the heirs, a copy of the ration card (if any), bank statement of the heirs to
prove that the heirs are indeed the rightful successors.
documents such as death certificate of the deceased, the birth certificate of
the heirs, a copy of the ration card (if any), bank statement of the heirs to
prove that the heirs are indeed the rightful successors.
Original purchase deed
of property and registration documents
of property and registration documents
In case of absence
of this document, one needs an authorisation to procure certified copies of
these title deeds from the jurisdictional registrar’s office.
of this document, one needs an authorisation to procure certified copies of
these title deeds from the jurisdictional registrar’s office.
The Encumbrance
certificate
certificate
This records and
reflects all transactions that occurred with respect to the immovable property;
including all sale, lease, mortgage, gift, partition and release transactions.
reflects all transactions that occurred with respect to the immovable property;
including all sale, lease, mortgage, gift, partition and release transactions.
The record that shows
the entry of the property owner’s details in the records of the Corporation/
Municipality. This includes proof of property tax paid, type of property and
conversions if any. Once these documents are submitted to the legal expert
specialising in property inheritance along with the legal authorisation on your
behalf, it is a matter of time before the title is transferred.
the entry of the property owner’s details in the records of the Corporation/
Municipality. This includes proof of property tax paid, type of property and
conversions if any. Once these documents are submitted to the legal expert
specialising in property inheritance along with the legal authorisation on your
behalf, it is a matter of time before the title is transferred.
Have you inherited a
property which you would like to transfer?
property which you would like to transfer?
Sanjeev Srikumar, who
has lived in Muscat for a decade says, “I recently inherited a property in
Chennai’s Ambattur locality. It is a 2BHK apartment with one toilet and
bathroom. I would like to transfer the property to my sister who lives in the
city. How should I go about it?”
has lived in Muscat for a decade says, “I recently inherited a property in
Chennai’s Ambattur locality. It is a 2BHK apartment with one toilet and
bathroom. I would like to transfer the property to my sister who lives in the
city. How should I go about it?”
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PG – 19122019