Gifting, passing on, and inheriting a property are common real estate transactions. If you wish to transfer the ownership of a property, you cannot just hand over the keys and call it a day. You need a legal document to make the change official. That’s where a transfer deed comes into play. You may think of it as a receipt for property ownership without a sale. But what exactly is it and how does it work? How is it different from a title deed or a sale deed?
Various types of deeds exist, each one working a bit differently from the other. In this article, you’ll delve into discovering the transfer deed meaning, working and its types. Read on to learn the process of transferring a property, the charges involved and the common mistakes to avoid.
A transfer deed is a legal document for transferring ownership of a property from one person to another. It is commonly used when a property is being sold, gifted, or inherited. It can transfer ownership to an individual, a group of people or a company. Once you register it with the local authority, the new owner’s name comes into effect in the official records. A deed of transfer makes the change of property ownership legal and valid in the eyes of the law. A transfer deed in India is often referred to as a conveyance or an assignment. It is governed by the Transfer of Property Act of 1882.
The property owner may transfer voluntarily, by selling or gifting the property. Sometimes the transfer may happen involuntarily under certain legal obligations or situations beyond the owner’s control. A property deed transfer uses a deed of transfer to shift the ownership of an immovable, real estate asset like land or a house. It is not to be confused with a share transfer deed used for transferring ownership of company shares from one person to another. A deed of transfer is often used when:
The deed of transfer states who is the transferor (the giver) and the transferee (the recipient) along with property details. Key features include:
There are many ways to transfer property ownership. Each method serves a different purpose and has its own rules. Understanding the various types of deeds to transfer property helps you identify the apt one for your needs and avoid legal trouble in the future.
As the name suggests, a gift deed is used when the owner gifts a property to another person without seeking money in return. It is often made out of affection or goodwill. It must be registered for a legally valid record of the ownership transfer and to protect the interests of both parties. An example is a father deciding to gift his apartment to his daughter at her wedding. He may use a gift deed to officially transfer the property to the daughter. A gift deed is a voluntary transfer and takes immediate effect upon registration, granting legal ownership to the recipient.
This type of transfer deed is commonly used in family settlements. Imagine a situation where the parents in a family pass away and the two siblings inherit the family house. One of them decides to give up the shares to the other. This is where a relinquishment deed comes in. By signing and registering it, the giver can make the receiver the legal owner of his or her share of the property. A relinquishment deed is used when a co-owner gives up their legal share in a jointly owned property, usually in favour of another co-owner.
‘Partition’ is another deed of transfer of rights commonly in family settlements. When siblings jointly own a property, a partition deed can help divide and define ownership to avoid future disputes. Imagine two brothers co-owning an ancestral farmland. They decide to divide it equally using a partition deed to record who owns which part of the land after the split. This deed includes a formal agreement, a clear definition of ownership, and legal protection. It helps simplify inheritance and facilitates the sale of individual shares hassle-free.
A quick deed transfer is a fast-track process to transfer property ownership. Though less common in India, it refers to a simplified process in family or low-value transfers. Yet, it requires proper registration for validity. It often uses a quitclaim deed to transfer ownership with minimal guarantees or warranties. Such a deed of transfer of rights usually comes in handy in case of family transfers and correction of title issues. For instance, a man transfers a small plot of land to his cousin to settle an old family agreement using a quick deed transfer process.
Transferring a real estate property must be done legally to be valid in the eyes of the law. From selecting the right type of deed to registration, there are many steps to follow. If you are planning to gift, pass on or sell a property, knowing how to transfer a deed legally is important. Here is a step-by-step guide:
In India, the processing of a transfer deed typically takes 7 to 21 working days. The timeline may vary according to the state, type of deed, and processing of the documents. In Kerala, real estate deed transfer can take 7 to 15 working days, provided the documents are in order. The actual registration may likely get over in a day. Delays may occur due to document verification or pending dues like tax. Consulting a legal expert can help complete the paperwork properly and avoid delays.
Differentiating a deed of transfer vs title deed shows how they vary in purpose, usage and legal role. A deed of transfer is an action-based document that transfers a property from one person to another. It is used at the time of ownership transfer and shows the names of both the old and new owners. A title deed is a proof-based document that proves ownership of the property and shows only the current legal owner. After an ownership transfer, the title deed should reflect the new owner’s name.
Further reading: What is a Title Deed
When you deal with property deed transfer, distinguishing transfer deed vs sale deed is vital. A deed of transfer is any legal document that transfers property ownership, whether it is through a gift, inheritance, partition, or sale. On the other hand, a sale deed is a specific type of transfer deed used only when property is sold for a price. All sale deeds are transfer deeds, but not vice versa.
In India, the cost to transfer deed to another person includes stamp duty and registration fees. It may vary by state and the type of deed. Stamp duty in Kerala typically ranges from 1% to 8% of the property’s value, depending on the type of transfer. Gift deeds may imply lower duty (around 1%), while sale deed duty can go up to 8%. Registration fees are usually 1% to 2% of the property value. Moreover, legal fees and miscellaneous costs may apply. Check with the local Sub-Registrar office for updated rates and estimate the transfer deed cost likely for you.
Drafting and preparing a deed may seem simple, but minor errors can lead to legal issues or delays in registration. Avoiding common mistakes can help save time, money, and future disputes. These include:
A transfer deed is key to ensuring smooth and legal property ownership changes. Be it a gift, sale, or inheritance, knowing the right type of deed, following the right steps and avoiding common mistakes can save time and trouble. A trusted and reputable icon in real estate, Confident Group emphasises transparency, excellence and authenticity. Our signature services and seasoned expertise help you sail smoothly through every step of your real estate journey!
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