Jun 22, 2023

Avoiding Mistakes in Executing Relinquishment Deed

by Godrej Properties Limited

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A relinquishment deed is a legal mechanism for transferring or surrendering property ownership rights from one party to another. In India, when legal heirs jointly inherit property, one of the co-heirs can surrender his right to the property by executing a relinquishment deed under the Transfer of Property Act. Despite its legality, there can be some risks associated with it. Let’s look at the pitfalls of a relinquishment deed and how to avoid them.

Relinquishment Deed - Validity & Supreme Court Judgements

The Supreme Court of India has prescribed certain requirements to determine the validity of relinquishment deeds in property rights transfers. According to these, a release deed under the Transfer of Property Act must be written on stamp paper, signed and witnessed, and registered with the sub registrar’s office, making It a legal, binding instrument. 

Additionally, there are a few other supreme court judgments on relinquishment deeds. These include:

  • Once a person executes a relinquishment deed for joint property in a standard format they cannot claim any interest or right in the said property.
  • A relinquishment deed is limited only to the parties named in it. Any other third person cannot be bound by it nor claim any interest in the property.
  • Any previous interest in the property or antecedent title is not overruled by a relinquishment deed.

Despite its legal implications, can a relinquishment deed be challenged? Under specific circumstances, a relinquishment deed can be challenged within the first three years after registration.

Risks of a Relinquishment Deed

Following are the risks of a relinquishment deed:

Irrevocability: Once a relinquishment is signed and registered it cannot be revoked. Hence, careful consideration is required.

Financial Implications: Surrendering current title rights to the property also means surrendering future value appreciation and any income from the property. Similarly, those who receive the relinquisher’s shares must check for undisclosed liens on the property which will be their responsibility after the deed is executed.

Future Rights of Heirs: If Ram is relinquishing his rights to the property, his heirs also cannot have any future claim to the said property.

Mutual Consent: All parties involved in a relinquishment deed must provide their consent. Even if one doesn’t the deed is invalid.

Careful Execution: The relinquishment deed must be executed after careful consideration and mutual agreement between the parties involved to ensure there are no future disputes.

Legal Compliance: A relinquishment deed must be executed in the specified format and registered for it to be valid. Non-compliance with these requirements invalidates the deed.

To conclude, relinquishment deeds are complex and have serious implications. Hence, seek proper legal advice before executing one.
 

Frequently Asked Questions

1. Who can I consult before executing a relinquishment deed?

Answer: Consult a lawyer with expertise in property law to understand the implications of a relinquishment deed.

2. Are witnesses required when registering a relinquishment deed?

Answer: A relinquishment deed must contain the names, details, and signatures of two competent witnesses to be considered valid.

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