Steps to take when you inherit property ownership in India -
March 28, 2017
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Steps to take when you inherit property ownership in India

property ownership in india

Holding out house keys on a house shaped keychain

Disputes related to properties are common in India and court cases related to property ownership rights over land can go on for decades. Property disputes are common in the inheritance.

One must require go through the legal formalities to obtain clear ownership of the property. Since whenever you may want to sell or gift it to someone in a legal manner, you first have to make it legally yours.

Legal formalities may very depend upon the nature of the belonging, your rights over it, a number of legal heirs and other aspects.


What to do once you inherit property in India:


Step 1: Legal transfer of property ownership on your name

The first thing you need to ensure is to get it transferred in your name when you inherit property ownership. In a case when it is a movable property, which may include bank balances and securities, it should also be transferred in the name of the beneficiary.

While, in a case of immovable property, it should be transferred and mutated in the name of the recipient in the relevant government department or revenue records which depend upon the nature of the estate (commercial, residential and agricultural)?

A land can only be transferred if you have substantial proof to claim your inheritance. When a person dies with leaving behind a Will, his executors need to administer the estate as per his/her wishes set out in the Will, provided the same are not contrary to law.

When there is no Will, there is a chance of arising many problems. In such cases, the legal heirs of the person can choose amongst themselves at least one administrator who then acquires Letters of Administration to the assets of such person.

The distribution can be chosen or decided mutually or can also be settled by the court. All the legal beneficiaries can pass on their rights commonly to a sole heir or another person.

In the situation of the absence of a Will, the relevant succession laws come into effect. So, for instance, According to the Hindu succession law in India, if a Hindu man leaves behind assets without making a Will, it is initially passed on to Class I heirs (which include the widow, mother and children) in equal share. If there are no any Class I heirs, Class II heirs (which include father, brother, grandchildren, sister and few other relatives) can claim the estate.

While in case, if the owner is a Hindu woman, her husband and children become equal shareholders of all the assets. However, if none of them is present, all assets go to the legal heirs of her husband, to her mother and father, so on. Thus, if a Hindu woman wishes the belongings to go to her sister, then she has to say so in her Will.

One must remember that one can only pass on the real estate as per his/her wish if the real estate was only through self-acquired and not inherited.

Step 2: Get Property Ownership Documents or Title of the land

When the beneficiaries and their shares, rights and liabilities are decided, the land has to be transferred in their names. For this situation, you need to apply for transfer of property at the sub registrar’s office. In most of the times, documents required can be Will or Will with probate and succession certificate.

To concern with the assets, the property ownership documents of movable and immovable assets are also required.  In the absence of a Will, you may also need to prepare an affidavit, along with a no-objection certificate (NOC) from the other legal heirs or their successors.

Once property gets transferred in your name, the next important task is to apply for mutation of land or title of the land. It is required to be done to record the transfer of a title of immovable property from one individual to another in the land records.

Mutation of estate records takes place at the local municipal authority office in whose jurisdiction the inherited property is located. In the mutation process, required documents and fees differ from state to state in India.

When you inherit property, besides proving your claim or rights, the other vital thing is to have clear ownership evidence of the estate. If proper all required documents are available, the transfer process becomes easier, but in a situation, when it is an ancestral property and ownership of property records are not available, the job can become difficult.

In such case, one needs to trace the title of the land. Initially, you should find out whether any consideration was paid by the deceased in acquiring the land and make out a claim based on the evidence available together with the details of the consideration paid. Take help or guidance of a legal adviser or a lawyer.

Step 3: Liabilities

Given the high capital values of properties, most are bought with the aid of home loans. Thus, what happens if you inherit a property that has an outstanding home loan?

Whatever assets you inherit, you do so with clogs, mortgages, disputes and so on. Thus, if there is an outstanding home loan against the land, it also gets passed on to the inheritor. Apart from this, mortgaged property can be transferred only with the written consent of the lender.

It means, if a person passes away while the home loan was still running on the belongings that have to be bequeathed to the beneficiary—who might be the children or spouse of the deceased—they will have to pay the outstanding loan. However, if home loan insurance was taken, the insurer pays the outstanding loan to the lender.

In such situations, once installment is made by the insurer, you should collect the loan clearance certificate from the lender and all the original documents of the land that were given to the lender to avail the loan.

If the land you inherit has been let out, you become obliged to adhere to the lease agreement signed by the lessee and the lessor. Similarly, if there is any dispute related to the estate or if there is any litigation which involves the land, you also become part of it.

Lease agreements with the consent of the lessor would be inheritable. In civil litigation, the heirs of the deceased are brought on record in place of the deceased with all his rights and obligations.

No doubt, inheriting a property is not a regular incident. Therefore, one should take care to have all details in place. Only possession of property does not make you a legal owner; a proper transfer is a must. Thus, If needed, do take legal advice and help to get the inherited land transferred in your name.

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