What happens if co-owner gives up the ownership rights?
Swapnil Singh, one of the users, ‘How does the surrender of property from co-owner to another workout. Are there any charges involves? Many might have had a similar question. Simply, it can transfer property to another person in 3 ways- sale/transfer deeds, a relinquishment deed and a gift deed.
Latter in what will actually come into play in this particular case. The co-owner, in particular, those are willing to give up his or her rights over property can resort to relinquishment deed which allows for smoother transfer. At times, legal heirs who are providing their stake in property are asked to sign the deed for clarity.
For instance, take the case of Mahima Sinha. When she got married, her mother insisted that she signs the relinquishment deed before going to her new home. She was compensated in the terms of liquid money as the property was to be shared among the two brothers who lived with the mother. While signing the deed, it means that she couldn’t or wouldn’t come back for the share in the property.
Let us look at what it entails-
• It is generally signed by legal heir relinquishing the property in favor of the legal heir. It could be the parental, ancestral or joint property. Also, it takes place when a parent dies without leaving the will. The property must actually be owned by more than a person.
• As with all the documents related to transfer of immovable property, release deed requires being signed by both the parties, registered and stamped. The stamp duty will be applicable on a portion of the property that is relinquished.
• It is irrevocable even when one who is relinquishing without being compensated
• You can’t relinquish property in favor of the non-co-owner. If you plan to transfer property to someone else, it would be treated as the gift deed as well as would attract the stamp duty charges
• Document may be presented for the registration either in office of sub-registrar in whose sub-district the document was executed or office of any other sub-registrar under state government at which all person executing as well as claiming under document desire the similar to be registered
• Since the relinquishment is transfer and not the gift, there are no tax benefits
• Unregistered relinquishment deed is not permissible as the legal proof of the relinquishment
• As per the Registration Act of 1908, the relinquishment under Section 17 which basically means it has to be compulsorily registered at the office of the sub-registrar