Sale and Transfer of Property
A big issue faced by NRI owners is the transfer of property or immovable real estate assets. As India is a nation with federal character, all matters relating to transfer of agricultural, residential or commercial real estate come under the purview of the states. This makes complications for NRIs in the process of executing property transfer, as each state follows different statutes, rules and applicable taxes for transfers.
Property Transfer is when ownership moves from one person to another person. A person who desires to actively control, manage, build, mortgage or sell a real estate asset, must have ownership of the asset. This is more important for NRIs as they are physically far away from the property and may have received the property through inheritance. Hence to safeguard and manage the real estate asset, it is essential to have the property transferred and ownership records updated. Once the property transfer is done the new owners name is duly recorded in the Government records.
Compared to Western countries, transfer of a real estate asset in India is not automatic but a time consuming and tedious procedure of submitting proper documentation, getting them verified and completing all legal formalities. These processes are cumbersome and vary from state to state.
Multiple alternatives are available for undertaking property transfers. The process can also vary depending on whether the person from whom the property is being transferred is alive or not and is further dependent on whether the deceased person has left a will or not. A deceased person’s property can be transferred based on natural succession or Will. If a person dies intestate i.e. without leaving a will, their immovable assets get devolved upon all class 1 legal heirs. If an owner of a property is willing to transfer the ownership rights to someone during their lifetime, there are various instruments available through which he can transfer their title rights, such as, Gift Deed, Transfer Deed, Relinquishment Deed or Sale Deed, etc.
It is important to note that irrespective of the mode of transfer, it is mandatory to register the instrument of transfer (Gift Deed, Transfer Deed, Relinquishment Deed or Sale Deed) with the appropriate Government authority for it to become final and enforceable. Only after getting it registered with relevant authorities does the instrument of transfer (Gift Deed, Transfer Deed, Relinquishment Deed or Sale Deed) become legally valid. The process of registration for a property transfer in India involves payment of stamp duty and other registration costs. These costs are based on a percentage of the commercial value of the real estate asset and these rates vary from one state to another. Upon successful registration of the instrument of transfer (Gift Deed, Transfer Deed, Relinquishment Deed or Sale Deed) the mutation of the property can be applied for.
As a professional property management firm, we can offer end-to-end services for our clients to assist them with executing the transfer of properties into their names. With nearly two decades of experience and understanding of the nuances that govern transfer of such properties, we can provide turnkey service of executing transfers for any kind of property, ensuring compliance with the law.