The property transfer whether as a transaction or for other reasons involves a lot of legal formalities. A deed needs to be prepared for the transfer of the ownership to the new owner. This deed is a legal document that puts the property under the name of the new owner which cannot be challenged; he who has the deed of the property is the lawful owner. It thus protects the new owner from frauds, and baseless claims.
We know that the stamp duty paid at the time of purchase of the property is a huge amount and the deed saves the new owner stamp duty and he also gets some relaxation on the taxes. Let us see what you need to do for transferring the property and what are the different kinds of property deeds.
The Memorandum of understanding MOU
It is another legal document that needs to be prepared and signed by both the parties before the deed of the property. As the name suggests, it holds the information about both the parties and the transaction happening like; names of buyer and seller, date of the agreement filed, the value of the property and the time period within which the complete amount of the transaction has to be paid.
Types of Property deeds
1. Sales deed: The preparation of sales deed at the time of sale of the property is crucial for both the seller and the buyer. This document is validated under the Registration Act and contains the names and addresses of the buyer and the seller, property details; address, area, completion date, transaction date, etc. It also holds the transaction details like the deal amount, advance payments, the time period within which the transaction has to be completed, etc. The property should be clear of any ongoing disputes before the signing of the deed. If the current owner has taken any loan against the property, he needs to settle it. The stamp duty to be paid varies from state to state and approximately equals to 1% to 8% of the property value.
2. Assignment deed: This deed is signed when the owner wants to transfer the property to one of the relatives for any reason like retirement, or illness. This differs from the sales deed as the money is not involved in the transfer. It is also not necessary to register the deed with law, it only needs to be signed by both the parties in presence of two witnesses. Thus, the new owner reaps all the benefits of the property.
3. Relinquishment deed: When a property is co-owned, and one of the owner wants to transfer his share to his partner with or without exchange of money, the relinquishment deed is signed. After signing and registering the deed, the old owner has no right over the property and the deed cannot be reversed. The stamp duty that the new owner needs to pay is not levied on the total value of the property but it is to be paid as a percent of the value relinquished by one partner.
4. Gift deed: When the owner of the property willingly transfers his property to any relative or nonrelative as a gift without involving money, gift deed is to be signed. The deed is to be drafted on the stamp paper, attested by two witnesses and registered with the sub-registrar. If the property is transferred to any relative, the stamp duty varies from 1% to 8% of the property value while in case, it is transferred to a nonrelative, the stamp duty is 5% to 11%.
Drafting the deed is an important task and needs to be prepared under the guidance of a professional legal advisor. To escape any future complications, always prepare the deed before the transfer of the property. For any further Jaipur property related queries, contact us.