In many cases, a person dies intestate, (without making a will or testamentary will) in such cases his/her legal heirs inherit the property. It is then up to the heirs as what to do with their share in the said property. If the heirâ€™s concluded separation of property, then anyone of the co-owner can relinquish his share in favor of the other owner. This process of transferring property from one owner approving the other is known as â€śRelinquishment of Propertyâ€ť.
A legal document/instrument where a legal heir gives up or releases the legal rights that he has in an inherited parental property for another legal heir such as his mother, son, daughter, brother, sister, etc. is referred to as Relinquishment deed.
The word relinquishment refers to abandoning or surrender of the rights, title, and interest, by one co-owner of property for the other co-owners.
Following are the Essential Elements of Relinquishment Deed:
Legal Document: Relinquishment deed is a legal document through which an heir can transfer or release his legal right of the inherited property.
Consequences: The effect of such transfer of rights is the release of the share of one co-owner and the extension of the shares of the other co-owner/s.
Irrevocable: A release or relinquishment deed is irrevocable even if it is made without any consideration. For a valid relinquishment, more than one person must own the property.
Relinquishment canâ€™t be done in favor of a third person: Relinquishment of property canâ€™t be made in favor of any person other than a co-owner. If a relinquishment is made in favor of a person who is not a co-owner, the transaction is to be treated as a gift.
Must be in writing: The Relinquishment of right in the case of immovable property must be done through a written document called relinquishment deed which must be signed by all parties and witnessed by at least two witnesses.
Consideration: A relinquishment deed can be done with or without any consideration.
Who can relinquish property?
Someone who has a share in the property is the only one who can initiate the relinquishment of property. In case there exist more than one owner of a property, either of the co-owners can relinquish their share. For a valid relinquishment, all the essentials of a valid contract are to be followed other than the compensation.
In whose name can a property be relinquished?
Relinquishment of property can only be done in the name of a person who is co-owner or co-sharer in the property. Hence, for a valid relinquishment, the person getting the relinquished property must be a legal heir.
A property may also be transferred to minors; such cases will be governed by the Indian Contract Act, 1872.
Difference between Relinquishment Deed and Gift Deed
1. Relinquishment Deed is a deed by which one person releases or transfers his legal right to the property while aÂ Gift Deed is a deed by which one person gifts his legal rights ina property to any person.
2. The property relinquished is always an inherited property. Whereas, a property that is being gifted need not be inherited property.
3. The person in whose favor the property is relinquished must be a co-owner of the property while the person in whose favor the property is gifted can be anyone.
4. Relinquishment may or may not be for consideration, but a gift does not require any consideration.
Registration of Relinquishment Deed
As relinquishment deed is a legal document through which a person formally gives up his claim to another person, the said deed must be systematically executed and registered as per Section 17of the Registration Act, 1908.
Preparation of Relinquishment Deed: A relinquishment Deed is to be prepared on a stamp paper of Rs.100. It must be ensured that every detail of the property is mentioned clearly in the deed.
Present the deed before Sub-Registrar of Assurances: On the preparation of the relinquishment deed on a stamp paper, it is submitted before sub-registrar of assurances within whose jurisdiction the property is situated for registration along with a registration fee which varies from state to state.
Witnesses and other formality: Signatures of two witnesses will be required to get a deed registered. Other documents such as passport size photos, identity proof (driving license, Aadhaar card, etc.) is required.
(This article was submitted by Gobin Phoolka of Panjab University as a part of B&B Associates’ internship program.)