If There's No Payment, You Can Transfer Property Using A Gift Deed

For the gift deed or release deed to be legally valid, it is necessary that it is registered with the sub-registrar of assurances having appropriate jurisdiction

I have a flat booked with a developer who has been declared insolvent. I have paid 50% of the property value and the remaining is being paid through  EMIs on a loan I took. Is there a legal recourse for me?

—Deepa Mahto

Under the Insolvency and Bankruptcy Code, 2016, homebuyers are considered as financial creditors and have a right to be represented before the Committee of Creditors. Based on the limited facts provided to us, you may note that as part of the corporate insolvency resolution process, the procedure is that a public notice will be published in local newspapers for inviting the claims of the creditors and pursuant thereto you will be required to submit your claim in the prescribed form along with details and documents to the resolution professional appointed for the class of homebuyers.

The resolution professional for the class of home buyers shall represent the home buyers as part of the corporate insolvency resolution process of the corporate debtor (insolvent developer company) before the committee of creditors.

My mother-in-law died in 2019 and left a flat in Mumbai to my wife and her sister. They sold the flat and bought a new apartment in the same city. As my sister-in-law was in the US, the flat was registered in my wife's name and mine. We now plan to transfer my ownership in the new flat to my sister-in-law when she visits India and get the property registered in my wife's and sister-in-law's name. Is it legally viable, and what is the procedure to do it? Also, what are the charges involved in such a procedure?

—Anonymous

Based on the facts provided to us, since the husband's undivided interest in the flat is required to be transferred to the US-based sister-in law, such that both the sisters own the flat, either a gift deed or release deed will be required to be executed by the husband in favour of the sister-in-law. As there is no consideration paid, a transfer or sale deed cannot be executed. For the gift deed or release deed to be legally valid, it is necessary that it is registered with the sub-registrar of assurances having appropriate jurisdiction.

You may also note that based on the provisions of the stamp act as applicable to the concerned state where the flat is situated, it is possible that the stamp duty amount payable on the gift deed or release deed shall be based on the market value of the flat.

Originally Published by Mint

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