I want to gift a commercial property in a co-operative housing society to my daughter. However, my sale deed is not registered. Is it possible to gift the flat to my daughter? What is the procedure and what are the documents required?
—Krishna Kumar
While answering this query we are assuming that you purchased the said commercial property over 30 years ago. We are further assuming that full stamp duty has been paid on the said sale deed in accordance with the provisions of the Stamp Act applicable to the state where the said commercial property is located.
Section 54 of the Transfer of Property Act, 1882 defines sale as a transfer of ownership in exchange for a price paid or promised or partly paid and partly promised. This section also states that the transfer of tangible immovable property of the value of Rs.100 or more must be by way of registered instrument.
Section 17 of the Registration Act, 1908 lays down the documents, of which, registration is compulsory.
Section 17(1)(b) of the Registration Act inter alia provides that any non-testamentary instrument which creates, or declares whether in present or in future, any right, title or interest, of the value of Rs.100 or more to or in immovable property is a compulsorily registerable document. The sale deed by virtue of which you are entitled to the said commercial property is thus a compulsorily registerable document.
Section 49 of the Registration Act inter alia states that no document which requires compulsory registration either under section 17 of the Registration Act or under any provision of the Transfer of Property Act, shall affect any immovable property comprised therein, or confer any power to adopt, or be received as evidence of any transaction affecting such property or conferring such power, unless it has been registered. Which means that the transaction desired to be effected by the document will be inoperative so far as the immovable property is concerned.
Thus, as the sale deed in question has not been registered, it does not affect any immovable property comprised therein, i.e. the said commercial property. However, you may execute a gift deed in favour of your daughter, if a period of 30 years have elapsed since you have been in possession of the said commercial property and no claim can be raised against you, as the maximum period of time within which a person can file a suit in a competent court with respect to an immovable property, as per the provisions of the Limitation Act, 1963, is a period of 30 years. Thus, since we are assuming that you have been in possession of the said commercial property for more than a period of 30 years, no claim can be raised against you.
For the gift to be valid it must be made by you voluntarily, without any exchange of money and it needs to be accepted by your daughter. It is to be noted that the said gift deed is to be executed by you and your daughter and attested by two attesting witnesses.
Further in the event the original vendor (i.e. the person who sold you the said commercial property) is alive it would be advisable, to execute an agreement with him stating that neither he nor anyone claiming through him has any right, title and interest in the said commercial property and that you are the sole owner of the same. You may annex the said agreement to the gift deed. It is also to be noted that stamp duty is payable on a gift deed in accordance with the provisions of the Stamp Act applicable to the state within which the said commercial property is situated. A gift deed is a compulsorily registerable document in accordance as per section 17 of the Registration Act.
Lastly, it is to be noted that the title of your daughter will always be subject to the aforementioned lacuna (i.e. the defect in your title due to non-registration of the sale deed).
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—Krishna Kumar
While answering this query we are assuming that you purchased the said commercial property over 30 years ago. We are further assuming that full stamp duty has been paid on the said sale deed in accordance with the provisions of the Stamp Act applicable to the state where the said commercial property is located.
Section 54 of the Transfer of Property Act, 1882 defines sale as a transfer of ownership in exchange for a price paid or promised or partly paid and partly promised. This section also states that the transfer of tangible immovable property of the value of Rs.100 or more must be by way of registered instrument.
Section 17 of the Registration Act, 1908 lays down the documents, of which, registration is compulsory.
Section 17(1)(b) of the Registration Act inter alia provides that any non-testamentary instrument which creates, or declares whether in present or in future, any right, title or interest, of the value of Rs.100 or more to or in immovable property is a compulsorily registerable document. The sale deed by virtue of which you are entitled to the said commercial property is thus a compulsorily registerable document.
Section 49 of the Registration Act inter alia states that no document which requires compulsory registration either under section 17 of the Registration Act or under any provision of the Transfer of Property Act, shall affect any immovable property comprised therein, or confer any power to adopt, or be received as evidence of any transaction affecting such property or conferring such power, unless it has been registered. Which means that the transaction desired to be effected by the document will be inoperative so far as the immovable property is concerned.
Thus, as the sale deed in question has not been registered, it does not affect any immovable property comprised therein, i.e. the said commercial property. However, you may execute a gift deed in favour of your daughter, if a period of 30 years have elapsed since you have been in possession of the said commercial property and no claim can be raised against you, as the maximum period of time within which a person can file a suit in a competent court with respect to an immovable property, as per the provisions of the Limitation Act, 1963, is a period of 30 years. Thus, since we are assuming that you have been in possession of the said commercial property for more than a period of 30 years, no claim can be raised against you.
For the gift to be valid it must be made by you voluntarily, without any exchange of money and it needs to be accepted by your daughter. It is to be noted that the said gift deed is to be executed by you and your daughter and attested by two attesting witnesses.
Further in the event the original vendor (i.e. the person who sold you the said commercial property) is alive it would be advisable, to execute an agreement with him stating that neither he nor anyone claiming through him has any right, title and interest in the said commercial property and that you are the sole owner of the same. You may annex the said agreement to the gift deed. It is also to be noted that stamp duty is payable on a gift deed in accordance with the provisions of the Stamp Act applicable to the state within which the said commercial property is situated. A gift deed is a compulsorily registerable document in accordance as per section 17 of the Registration Act.
Lastly, it is to be noted that the title of your daughter will always be subject to the aforementioned lacuna (i.e. the defect in your title due to non-registration of the sale deed).
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