What to do if the Co-Owner Desires to Leave the Co-Ownership?
Aug 13, 2019 Home Trading Steps
Buying a property jointly and having a co-owner can have many advantages. The advantages can turn sour f the co-owner decides to opt-out of the co-ownership. Many questions may arise in this regard: how does one surrender the property from co-owner to another works out? You can transfer your property ownership to another in three ways:
a. Sale/ transfer
b. Gift deed
c. Relinquishment deed
a. Sale/ transfer
b. Gift deed
c. Relinquishment deed
Let's understand in detail
- A relinquishment deed is generally signed by the legal heir to give up their share of the property for another legal heir. The property could be ancestral, joint, or paternal. It can also take place when either or both parents die without leaving a will behind. For the deal to come into the light, it must be owned by more than one person.
- The deed is irrevocable. Even if the person withdrawing from the co-ownership has not been compensated, the deed cannot be revoked.
- Just like any other immovable property, the release deed must be signed by both the parties in the presence of witnesses. Stamp duty is only applicable to that portion of the property for which the owner is giving up the ownership.
- One cannot merely relinquish property in favour of a non-co-owner. As a co-owner, if you are willing to transfer your property to someone else, it will be treated as a gift, and all the charges applicable for the gifted properties will be applicable.
- According to the registration Act, 1908, the relinquishment deed comes under Section 17, which means that it must be registered compulsorily at the sub- registrar's office.
- The document can be presented in the office of the sub-registrar in whose sub-district the document was executed or any other sub- registrar's office under the state government at which all the person who desires to relinquish the document needs to be registered.
- Unregistered relinquished deeds are not legal.
- Since relinquishment is not the transfer of property, there are no tax benefits.
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