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All You Need To Know About the Scope of Relinquishment Deed

All You Need To Know About the Scope of Relinquishment Deed

In order to enable a co-owner of a property to relinquish their share of the property to another co-owner, a relinquishment deed is required. The right of a co-owner in the joint Hindu property can be relinquished through a relinquishment deed. The need for drafting a relinquishment deed would generally arise when the property owner dies intestate or when the legal heirs of the property relinquish their right to the property as they no longer hold any interest in the property. In this article, we shall discuss the scope of a relinquishment deed.

Relinquishment Deed- Introduction

It is a legal document through which a legal heir can transfer or release his or her right to property. It has legal validity only if complete procedures have been followed with respect to the deed.

Let’s understand this through an example-

Suppose three sons inherited a property after the death of the father who died intestate. Assuming that the two sons decide to transfer their share in the property to the third son, then a deed of relinquishment shall be drafted, and it will be formally registered with competent authorities.

However, it is not as simple as one thinks. It includes various legalities that you need to understand before successfully creating such a deed. This deed is also known as a release deed.

Features of a Relinquishment Deed

Such a deed has certain essential features that you should know. Some of the major components have been listed below-

  • Legal document

As stated above, it is a legal document through which an heir transfers or releases their legal right to property.

  • Release and enlargement of share

The consequence of such a deed is that rights are transferred whereby one owner releases a share which results in the enlargement of shares of other property owners.

  • Irrevocable

It is pertinent to note that such a deed is irrevocable even if it is made without consideration.

  • Relinquishment in favor of a third person

The relinquishment of property cannot be done in favour of a person who is not a co-owner. In the case where such relinquishment is made in favor of someone who is not a co-owner, then such transaction shall be called a gift.

  • Written form
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The relinquishment of a right in an immovable property should be made only through a written document. It should be signed by all parties involved, and two witnesses will be required.

  • Registration of the deed

The deed should be legally registered as such a deed falls within the ambit of Section 17 of the Registration Act. Therefore, the relinquishment of rights should be registered.

  • Consideration

Such a deed may be done with or without consideration.

  • Simplified Process

The process of registration of the deed is simple and inexpensive.

Scope of Relinquishment deed

The transfer of rights in a property can be done through such a deed only when the property has been inherited. It includes all the ancestral properties wherein a person has a right by birth.

Also, the co-owners of the property can relinquish their right or share in the property, and it can be done only in favour of another co-owner of that property.

Scope of Relinquishment deed where the co-owner relinquishes his or her right in the property for lack of interest

There are many who die without leaving a will. Such a scenario is termed intestate. It includes the property of the person inherited by their legal heir. In such cases, the legal heirs can opt for a relinquishment deed ensuring seamless property transfer.

We have already discussed above that for the execution of a relinquishment deed. It is necessary that the property should be inherited property, and there should be joint ownership of the property who are vying to be a part of such a deed.

When two or more legal heirs inherit property after the death of the actual owner, they become co-owners of that property. However, suppose the recipient of a property is not interested in such inherited property. In that case, such a person may relinquish their right to that property to the co-owner of that property. When the deed meets all the legal requirements to be valid, such transfer of right is enforced.

In instances where the owner of the property dies intestate or where there is a will but it can’t be executed due to unavoidable circumstances, then succession happens through the Indian Succession Act or through any personal laws, which can be different for different religions.

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There are also instances where the Court has to be involved in the matters of division of assets of the original owner.

Revocation of Relinquishment Deed

A validly registered relinquishment deed cannot be revoked. One cannot change the decision when it has been registered under the Registration Act of 19081. However, there is a specific exception to it.

Such a deed can be revoked on the occurrence of the following events-

  • In case one is forced or influenced to make such a deed;
  • In case of fraud and where there is a lack of free consent;
  • In case of misrepresentation in the final document.

Further, in order to revoke such a deed, both parties, including the one who relinquished the property rights and the one in whose favour it was relinquished, must give their consent.

However, in case where one party is unwilling to revoke the deed, then one can also approach Court for cancellation of the deed.

The deed can be revoked within a period of three years from the date of execution of such deed. The deed becomes irrevocable after the said period.

Registration of Relinquishment Deed

It is essential to register such a deed because the Registration Act provides that an instrument through which a right is created or transferred in respect of immovable property should be registered compulsorily. Thus it is imperative to register such a document.

If such a deed is left unregistered, then it would not be admissible in the Court of law in case a dispute arises on the same.

Therefore the following process should be followed to register such a deed:

  • Firstly one has to draft the contents of the relinquishment deed on stamp paper;
  • Ensure that the information and details provided in such a deed are accurate and that it is free of any typographical error or mistake;
  • The draft’s language should be simple, so the deal is free of confusion. It also ensures transparency;
  • Then visit the sub-registrar office of your jurisdiction with the parties involved in the transaction;
  • There must be two witnesses, and everyone should carry original and copies of their ID proof and address proof along with their photographs;
  • A nominal fee has to be paid for the registration of the deed;
  • After scrutiny, if the official is satisfied that the deed is complete, the document will be registered;
  • One can collect the papers for future reference from the sub-registrar’s office.
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Scope of Relinquishment Deed and Scope of Gift Deed

Apart from the relinquishment deed, the property can also be transferred through a gift deed. There are differences between these deeds, and they also differ in terms of their scope.

Some of the significant differences have been discussed below-

  • Beneficiary

In the case of the relinquishment deed, the property can only be relinquished in the name of the co-owner of the property. However, the scope of the gift deed allows persons to relinquish their right to the property in favour of anyone, irrespective of whether the person is a legal heir to the property.

  • Consideration

In the case of a gift deed, the transferor transfers the property without any consideration, which means he does not get any money in exchange for the transfer of property. However, in case of relinquishment, the same can be executed with or without consideration.

  • Registration and Stamp Duty

Both gift deeds and relinquishment deed needs to be registered; however, the stamp duty rates of gift deed registration can be higher than the rate for registering a relinquishment deed.

  • Cancellation

A gift deed is irrevocable; however, it can be challenged in case of fraud or undue influence. A relinquishment deed is also irrevocable and can be challenged only in Court.

  • Tax implications

Property obtained as a gift deed is taxable, provided that it is not received from a close relative. However, relinquishment deeds are not taxable entirely. The portion of the property in respect of which the right has been relinquished is taxed.

Conclusion

A relinquishment deed is an important document that a party can use to transfer their rights to a property. The deed should be registered in order to be legally enforceable. The scope of the relinquishment deed also widens once it is duly registered with the appropriate authority. You can approach the Court in case of any dispute arising from such a deed. This right is available only if the deed is registered. Hence, the scope of the relinquishment deed enlarges with registration.

Read Our Article: All about Relinquishment Deed

References

  1. https://www.igrsup.gov.in/igrsup/registrationRule

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