Nominatiion of a property
Bilal Chauhan
(Querist) 24 September 2016
This query is : Resolved
Dear Experts,
I am intending to buy an underconstruction house from a builder in Thane on which I will apply for housing loan. However to raise the housing loan eligibility, I have to take my father as the co-owner in the property and also co-borrower in the housing loan application. I am paying the booking amount completely out of my own funds and the housing loan will also be paid by me. I wanted to safeguard my interest in the flat so that in future any legal heirs of my father should not have a claim in the property. My father has not made a will yet and neither will he in future. I have been advised to put a nomination clause in the agreement for sale, however only nomination will not serve the purpose. Any legal heir can still put their claim on my flat. Please advise me what is the best solution for me.
P.S.:
1) I have no other option but to take my father as co-owner & co-applicant
2) My father will not make a will now or in future
3) I am a practising Muslim governed by Muslim Laws of succession
Kumar Doab
(Expert) 24 September 2016
If you alone don't have capacity to pay, and have apprehensions, don't buy.
Bilal Chauhan
(Querist) 24 September 2016
I think you haven't read the question properly.
1) I clearly mentioned that I alone will be paying the money to buy the flat. Just to increase the housing loan amount I am taking my father as co-owner.
2) I don't have apprehensions. Besides only a good legal advice will keep things clear and avoid any apprehensions.
3) I don't seek your advice on buying or not. Please look at the question again.
A better & professional suggestion is most welcomed & awaited !!
Rajendra K Goyal
(Expert) 24 September 2016
Nomination may not serve the purpose.
Nomination is the trustee of other legal heirs, claim of LH does not vanish by nomination.
If your eligibility for required loan is not met, ask the Bank to include your father as co-borrower / guarantor without any share in the property. Bank should not hesitate in this. Responsibility would be jointly and severally. Loan is secured by collateral mortgage of property.
If your Bank does not agree to introduce / include your father as co-borrower without share in property, can talk to other PSU Bank.
Rajendra K Goyal
(Expert) 24 September 2016
In the above process, you would remain sole owner of the property. Your father's role would be to meet eligibility criteria for loan, however, in case of default, he would be responsible.
Bilal Chauhan
(Querist) 24 September 2016
Thanks. That seems to be the simplest way. Although most of the banks envisage the co-borrower to be the co-owner as well
cherukuri prasad
(Expert) 25 September 2016
Write clearly the consideration clause about who is paying how much in the sale deed
Raj Kumar Makkad
(Expert) 25 September 2016
It is difficult to convince bank to include a person in the loan as co-owner having no stake in the property.
As the property is mortgaged with the banker and the co-owner having no property shall also be benefitted for availing loan without having any security/collateral property then banker may refuse.
Anyway, you may try for this option and in case of difficulty, apprise us so that a new suggestion may be given to you.
Bilal Chauhan
(Querist) 25 September 2016
Thanks all for your valuable inputs. Mr. Prasad's suggestion may add up a little. As Mr. Makkad sugggested, I talked to my bank as well as few others, they don't have an option of taking a co-applicant without co-ownership. Isn't there any rider clause that we can just add in the purchase agreement which will suffice?
Raj Kumar Makkad
(Expert) 25 September 2016
Truely speaking no such rider note can be added in the sale-deed as you desire. Ownership of share can be there. You can mention negligible share of your father in the property say 1%-5% and may further mention that your father shall be free to sale his share only in favour of you during his life time. After obtaining loan, get it done with the permission of banker, if possible.
Raj Kumar Makkad
(Expert) 25 September 2016
Mentioning clause in the sale-deed about the person paying the money shall not suffice as it is not necessary to pay just out of own pocket. Question is ownership so the suggestion of Mr. Prasad shall not work..
Guest
(Expert) 25 September 2016
Mr. Bilal Chauhan,
Where lies the problem, when purchase of property is still a proposal, as you stated, "I am intending to buy an underconstruction house from a builder in Thane" and in what way nomination of your father for a non-exiting property can have any link, what to say of any future interest? Once you make your father a co-owner, you can't avoid any such risk of claim from other legal heirs, irrespective of whether he makes or not any nomination..
So, right now, you don't have any legal problem.
Even if nomination is made by your father after purchase of property, no guarantee for safeguard of your interest can be assured for future.
RATHER, WHAT I NOTICED, in spite of your query being merely an academic query, your arrogance is also evident when you addressed Shri Kumar Doab through your statement, "I don't seek your advice on buying or not."
You should know that once you come to an open forum with any true or false problem for solution, you can't keep the option be selective as to who should reply and who should not.
Charity seekers can't claim any such privilege to be slelective. Every member of the forum has a right to respond to an open query. In fact, you should feel sorry for your arrogant response to Shri Kumar Doab.
Bilal Chauhan
(Querist) 25 September 2016
Thanks for you valuable suggestion Mr. Makkad & Mr. Dhingra
Kumar Doab
(Expert) 25 September 2016
Respected Senior Expert Shri P.S.Dhingra,
The author has posted that he is Muslim and generically speaking the scope is 1/6th share of parents.
Hence I suggested ;'If you alone don't have capacity to pay, and have apprehensions, don't buy.'
The bank has to defend its good money and bankers have to mind the internal SOP.
The bank and banker has replied without mincing words, straight forward.
The bank and banker shall reply again without mincing words, straight forward, when the applicant for loan declares the share, CO borrowers...........
I have posted link to detailed SOP for bankers in another thread that have provisions for personal laws applicable to applicant and hence assessment accordingly.
Kumar Doab
(Expert) 25 September 2016
While we, atlast I endeavor to note and point arrogance, conduct to Experts/Seniors , companions, many ignore and prefer to post.
What is if one experts post 'Words like'.....'No Sense' for another companion and prompt arrogant ones to send PM!!!!!
Guest
(Expert) 25 September 2016
Kumar ji,
May he be Muslim, Hindu, Christian, Jain, Parsi, or Sikh, why to take so much pain in try for providing 100% spoonfeeding on an academic query? At least I could not find any relevance to your post. He should also make some of his attempt to find the legitimate answer to serve the purpose of his school exercise.
Kumar Doab
(Expert) 25 September 2016
Shri P.S.Dhingra,
Sir,
Agreeing on your post.
The author may find answers.
Rajendra K Goyal
(Expert) 25 September 2016
Have you discussed with PSU Banks / SBI which has expert housing loan processing team.
Spouse / children / parents of the borrower can join as co-borrower / guarantor even if they are not having stake in the property on which loan is sought.
Bilal Chauhan
(Querist) 25 September 2016
Mr. Dhingra, indeed you are an expert in this field so I may seem a school kid to you who is trying to buy his own flat out of his own funds. In an attempt of mine to find a proper legal advice I have met few experts who evaluate the level of the question and the level of the author inspite of extending the suggestions. I am a chartered accountant. If I were a law expert may be I would have not asked this to you which you consider a "school exercise". Raising concern about the behaviour is well appreciated. But judging someone and taking the liberty to bully is not all the purpose of the forum. I got bullied by the 1st reply made by Mr. Kumar so I asked any one else to make a suggestion rather than get beyond the question. But it seems you are teaming up!!!
Bilal Chauhan
(Querist) 25 September 2016
Appreciate Mr. Goyal, Mr. Makkad & Mr. Prasad for being helpful and straight to the question
Guest
(Expert) 25 September 2016
Dear Bilal,
I am happy to note that you are a chartered accountant, but the problem seemed to have been complicated by yourslf by posting an academic type of question including an unwarranted and totally unrelated issue of nomination with proposed purchase of property.
You would like to agree, at first yours was just a proposal for purchase of property, not a problem.
Secondly, making mention of nomination was irrelevant, when presently there was no problem, as even the property was at proposal stage.
Thirdly, if I pointed out that in no way nomination of your father for a non-exiting property had any link, what was wrong in my observation?
Fourthly, your question could have been quite straight about how to avoid claims by heirs on death of your father, if made a co-owner. Even that question would have been quite premature, when your father has not yet gained the status of a co-owner of your proposed purchase of property.
In fact, your question is based purely on hypothetical life long assumptions from the proposal stage till death of your father.
As a CA, I hope, you can appreciate that it is not a mathematical equation to be applied to solve a problem on the spot.
Moreover, on legal parlance nothing can be predicted before the event actually occurs. Can you also guarantee that your father's mind would not change after some years to ensure that he would not dispose of his portion of property in any manner he would like?
Please don't mind if I ask you one unpleasant question, can you guarantee that you can surely survive your father to ensure that his part of the property may not go to any other legal heir? Future is always uncertain. Nothing can be predicted, particularly in legal issues.
Even in your own accounting & finance field, you cannot predict what can be the future structure of taxation or economy in just 3-4 years next, what to say of several years hithertofore.
So, you would have asked such a question that could logically fit to solve a real problem for the present, not an academic type of question merely on hypthesis till death of your father. You would have thought for making arrangements only after purchase of property and making your father, as a co-owner.
Rajendra K Goyal
(Expert) 27 September 2016
Dear Author,
Being a CA, you are well aware of Banking procedure and Contract act requirements.
I have mentioned the guidelines of SBI in Housing Loan, if you wish can have the benefit.
Raj Kumar Makkad
(Expert) 27 September 2016
I am surprised to know that the author is a CA and even then he is asking the query directly or indirectly related with the accounts from the lawyers many of whose background is not of accounting.
Kumar Doab
(Expert) 27 September 2016
You have posted that:
"I got bullied by the 1st reply made by Mr. Kumar so I asked any one else to make a suggestion rather than get beyond the question. But it seems you are teaming up!!!'
No one bullied and no one teamed up.
It is still not clear what exactly do you mean by teaming up.
If you get bullied by one line of forthright and sincere reply, then it is your problem.
Rajendra K Goyal
(Expert) 27 September 2016
Author should reply the concerns pointed by the expert Kumar Doab.
Bilal Chauhan
(Querist) 27 September 2016
I am desperately trying to close the discussion but as Mr. Goyal asked me to reply i am giving a closing statement.
If any unknown person came to me to seek professional advice who is starting a business. He is asking me whether he should form a PS firm or a Pvt. Ltd. Company or an LLP. He describes me his future objectives and according to that I have to answer. As a professional I will purely stick to what he asked and I will discuss all the possibilities and possible future merits and demerits that he may see considering his future objectives that he described.
1) Imagine if I say to this first timer client that "You have too many apprehensions, don't start the business". Firstly, I will lose the client. Secondly, I will sound rude/bully because the client came to me asking what type of constitution should he choose to start a business and not whether to start a business or not. He has made months of planning to start the business and reached a final conclusion and at this stage I ask him don't do. There is a high possibility that the client will get infuriated and leave and even give extreme bad recommendations about my practice. I might have made a superb assessment and answered to his best interest. Still before giving such a reply I should have discussed my assessment and said that I THINK you should not start this business, you MAY land up in trouble. It is like a doctor quietly listening to a long description of all the problems narrated by his patient. The first statement he makes "You are going to die". That's it, discussion over! He MAY be right but there is a way to come down to this point.
2) Imagine if I say that you are still intending to start a business, and your query is premature, is based on hypothetical life long assumptions or is no point explaining because you may die even before starting your business, your query is too academic and sound to me like a school exercise. Firstly, he is not a CA, I am! I don't need to judge the level of question being asked, I have to answer or else in a I would say that I am sorry I cannot help you. In an open forum I would choose not to reply. Secondly, the question is definitely premature and should be. I cannot ask him to go first start the business and then come to me to ask about formation of the business entity. He has to do that before hand. During the incorporation process, the memorandum & articles of a company are drafted considering all hypothetical situations!
I went wrong in deciding the title of the query. As rightly pointed, nomination is not related to the question being asked!
I may have mentioned too much things which are irrelevant.
My 'intention' of purchasing the flat will be materializing in a week. And I have a week to register the agreement. I was of the opinion that there may be something to be mentioned in the agreement which will serve the purpose. Hence, the query is not a school exercise, academic or premature to me. As a rational person I asked the question before registering the agreement. You may have legal solutions which have to be done after purchase of flat so may it might have sounded to you as premature. As I said that I am not a law expert, you all are.
I politely requested the experts to stick to the question and not to judge the question itself. If there is no solution, then it can be mentioned that there is no solution. As Mr. Makkad said "Truely speaking no such rider note can be added in the sale-deed as you desire". That is appreciated and not this - "If you alone don't have capacity to pay, and have apprehensions, don't buy."
Hope you all understand!!
Bilal Chauhan
(Querist) 27 September 2016
Mr. Goyal pointed about going for SBI bank as they allow. I am in a situation where I have limited preferences or options. I am a CA specializing in finance and I know to avail any such benefits offered by various banks! But I am in a situation where I had to consider this option also. Appreciate your efforts though.
Bilal Chauhan
(Querist) 27 September 2016
As mentioned, I am a CA specializing in finance and I hardly have any knowledge of property inheritance laws or what ever it is. It is neither taught in CA course nor it comes across in CA practice frequently. A CA practicing in a related field might have knowledge of it but I am far away from it. Hence I asked the query. Appreciate your suggestions Mr. Makkad
Guest
(Expert) 27 September 2016
Mr. Bilal,
I have already stated, future is uncertain and nobody knows, depending upon change in circumstances, if the mind of your father changes some times after he becomes co-owner.
So, if you intend to purchase property, you should go ahead, don't be so skeptical about other heirs of your, who are not relvant at this time. But, if you ar so skeptical about the other legal heirs, you may go alone to buy property in your own name.
For your awareness, law provides solution only on the existing facts and valid evidence therefor about the event that has actually happened. So, you would be welcome, if you really face any problem on the property front in future.
Bilal Chauhan
(Querist) 27 September 2016
Thank you Mr. Dhingra. I will plan accordingly.
Thanks all!
Guest
(Expert) 27 September 2016
You are welcome.
Hemant Agarwal
(Expert) 28 September 2016
SIMPLER & IRREVOCABLE PERMANENT SOLUTION:
1. A duly Stamp duty paid and duly Registered "Irrevocable Declaration Deed", maybe executed by the Father ("AFTER" the sale-deed is duly registered) in favor of Son, with appropriate strategic clauses, stating his nil monetary contribution in buying property, nil Title-Ownership rights and nil claims by his legal heirs on such property and . . . .
2. IRRESPECTIVE OF ANYTHING, WHATSOEVER, the above DEED, would legally & permanently restrict and restrain the legal heirs of father, from claiming anything on this specific property. The Deed, would be legally enforceable perpetually against all legal heirs of father, EVEN at the hands of all future legal heirs, even if the Deed executor expires.
"It takes a very unusual mind to undertake analysis of the obvious"
Keep Smiling .... Hemant Agarwal
VISIT: http://www.maharashtra-society-help-forum.com
Guest
(Expert) 28 September 2016
Hemant ji,
With reference to your above advice to the author, would you please like to clarify, by adopting such a method, would not he, himself, be creating a proof of possessing a benaami property?
Also, about your advice, "nil Title-Ownership rights," when the registered sale deed would clearly denote his title, how anyone can deny that? In that case, why there would not be a chance of getting anyone of the document declared to be void, if challenged by any other heir of his father?
Hemant Agarwal
(Expert) 28 September 2016
Kind Attention: P. S. DHINGRA
Interesting questions. HOWEVER your queries are truly "academic in nature". You may prefer to initiate a separate "query", in this regard, for all other "experts" to participate in answering you.
HOW - WHY - WHAT - WHEN. Why would participating experts, debate /discuss /argu, on suggestive modes of another expert member ?
APOLOGIES, but my professional strategies are not discussable, on open public forums.
Keep Smiling .... Hemant Agarwal
VISIT: http://www.maharashtra-society-help-forum.com
Rajendra K Goyal
(Expert) 28 September 2016
Dear author,
Bank finance / loan is subject matter of finance, accounting, processing, RBI directives and a small portion related to property for which you can pass some time on internet / site of concerned Bank and the basics would be clear.
Guest
(Expert) 28 September 2016
Hemant ji,
I wonder, if you treat my questions as academic, while those were raised quite with reference to the context of your own advice to the author on his basic question, not raised independent of any context or background.
The question arises, if your "professional strategies are not discussable," what your present advice to the author should be termed?
However, if you consider it your stratyegy that the author and other participants should not properly understand how your advice won't lead to an offence of creating a benaami property, that may be your sweet will.
I hope, the author being a CA can well be aware of the term of benaami property and title of property.
Kumar Doab
(Expert) 28 September 2016
I am trying to close the matter in shortest possible manner.
In the shortest possible manner your contention is that you get bullied up with one line of forthright and sincere reply.
Your being professional has not helped you at all.
Nevertheless you can opt to visit Expert Mr. Hemant Agarwal and discuss in detail and benefit from his counsel.
Bilal Chauhan
(Querist) 28 September 2016
Will consider that!!! ;) After all I don't think me being a professional CA will anyway help me in property inheritance laws!
Kumar Doab
(Expert) 28 September 2016
Sufficient pointers were posted on inheritance as well.
Since you get bullied up, further posts were stopped.
Nevertheless Expert Mr. Hemant Agarwal can advise you on it as well, and you can benefit from his counsel.
