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Saturday, September 28, 2013

What is Partition Deed

While a Gift Deed is an instrument to gift a movable or immovable property, a partition deed for a property is executed to divide the property among different people - usually among the family members. As with a gift deed, this is a natural phenomenon as generations change hands. It is better to equip ourselves with the knowledge needed for partition deed.

What is a Partition Deed

A partition is a division of a property held jointly by several persons, so that each person gets a share and becomes the owner of the share allotted to him. It is done by dividing the property according to the shares to which each of the parties is entitled to in law as applicable to them.

Property gets a new title
Each divided property gets a new title and each sharer gives up his interest in the property in favor of other sharers. Therefore, the partition deed is a combination of surrender and transfer of certain rights in the estate.
The transferee can then further deal with the property in any manner as he may so desire. He can sell, transfer, exchange , or gift the property as its absolute owner.

Is it mandatory to register partition deed?
The partition deed is mandatorily required to be registered at the office of the sub-registrar of the place where the property is situated as in case of any other registration.
The stamp duty payable in such a case is Rs 1,000 for each share of the property. Further, the registration fee will be Rs 500. Do remember to check with your lawyer on the exact fees applicable in your area at the time of creation of partition deed.

Co-owners' shares are undivided

More than one person may jointly own a property. All such persons will have either equal or certain percentage of the rights to possess and use the property. The shares of co-owners of a property need not necessarily be equal. It depends on their investment in the property as detailed in the purchase document.
In the absence of any such details as to the share of investments made for acquisition of the property in the purchase document, it is presumed in law, that all the co-owners have equal undivided share of interest, right and title in the property.

What if all co-owners do not agree to partition
In case the co-owners are not agreeable to a partition a property and only one or more of the co-owners want the property to be partitioned, the mode of partition is a bit different. In such a case, a partition suit is required to be filed in the appropriate court of law. A partition deed should be executed on a stamp paper and drafted in a clear and unambiguous manner. The share of each person should be clearly and explicitly specified.

Partition deed creates new owners of a property

A partition deed creates new owners of a property and needs to be registered at the office of the sub-registrar to give it a legal and binding effect. The deed should in particular mention the date from which the partition is effective. The names of the parties and their respective shares should be specifically mentioned.

Property partition is subject to the inheritance law

Partition of property is also subject to the laws of inheritance applicable to a particular person. Different laws can apply. An interest in a coparcenary property can also be Willed away. This share goes out of the purview of ancestral property.
If a father dies leaving behind self-acquired property, his son will inherit it absolutely. The grandson cannot claim it as ancestral because it was inherited under the Hindu Succession Act.

What is a Single Partition Deed
A single partition deed can be prepared to partition a "group of properties" among its seekers, instead of going for one partition deed for each property.

Understanding of Gift Deed and Property Deed are vital when inheriting property (movable or immovable). Such knowledge can change the way you are able to handle the transition from one generation to the next.

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The book "From the Rat Race to Financial Freedom" has many such investment concepts explained in a very simple and uncomplicated manner, especially in the Indian context.


Cheers



Manoj Arora
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