Transfer of property from sister to brother
NC
(Querist) 02 April 2013
This query is : Resolved
Hi,
We purchased an ready to occupy independent house in the year 2010. Since my sister was eligible for home loan during that time, the property was taken in her name.
Now that she is getting married in 2 months, I want to get the property transferred on my name.
Limitations:
1) I do not have enough money for the outstanding loan amount so that i can close the loan and get a gift deed done.
2) I do not want to go for sale deed as it would cost me more and also as I know a gift deed is sufficient between brother and sister.
3) I am not a co-applicant for the loan.
Devajyoti Barman
(Expert) 02 April 2013
Gift would be cheapest method to transfer the same.
ajay sethi
(Expert) 02 April 2013
gift deed attracts 2%stamp duty . get it drafted by l;awyer have it stamped and regd
NC
(Querist) 02 April 2013
I agree. That is the reason, I would like an expert advise on how to deal with it.
Any suggestions on how to transfer without any hurdles from anyone viz. the bank and the future in-laws/husband of my sister.
NC
(Querist) 02 April 2013
But the bank says a gift deed cannot be done on an hypothetical property. I.e., the property that is mortgaged to Bank for the Home loan.
They say, that it is against the law to gift the property which is not free from any loans.
Devajyoti Barman
(Expert) 02 April 2013
No, gift can be done with regard mortgaged property as well.
NC
(Querist) 02 April 2013
The Bank says EC reflects the name of the current owner. and if it doesn't match there records, they have all the rights to penalize the owner of the property.
Is this true?
prabhakar singh
(Expert) 02 April 2013
I have already told you by a phrase"IT WOULD BE AN ONEROUS GIFT."
Section 127 of the Transfer of property deals with gifts called " Onerous "
A gift can not be complete unless donee accepts the gift.So it is donee wish he accepts an onerous gift or not.By phrase Onerous gift we mean gift of a property with some obligation ,or gift of an encumbered estate.When donee accepts such a gift ,he also accepts the burden imposed on the gift.
For a mortgaged property the possession from donor to donee passes in symbolic manner,for a mortgagor has always right to redeem his property and on acceptance of gift this right of redemption passes on to the donee.
Ask the bank to read section 127.
A gift is a complete instantaneous transfer
and get completes then and there,hence there can not be any claim from your sister's husband post her marriage.
Raj Kumar Makkad
(Expert) 02 April 2013
A gift of the mortgaged property can be done under section 127 as already suggested to you. You need not to obtain the consent of the banker in this regard.
NC
(Querist) 02 April 2013
1 quick question:
I get a gift deed done and as you said the property is solely under my ownership.
As per the bank records the property owner is my sister and also the loan is on her name.
Now the question is if i want to sell the property before the closure of the loan, is there any complexities that i would be facing?
For Example-
1. I can sell the property only if my sister permits me(along with her husband, in case she is married at that time)?
2. The bank tells you cannot sell the property since as per the bank records the property is on your sisters name, and only she has the eligibility to sell it!
3. Even if the gift deed is executed between us, my sister's husband comes back later to gain control over the property telling as per the bank records the property is on your sisters name and only that remains strong and valid, hence she has all the rights over it..
etc
Please advise!!
NC
(Querist) 05 April 2013
Any suggestions on my above question will be highly appreciated
Anirudh
(Expert) 05 April 2013
If need be, your sister herself, with the permission of the bank can sell the property and the sale proceeds would first be adjusted against the outstanding dues of the bank.
If bank agrees, and if you have the financial strength, then the loan standing in the name of your sister can be transferred to your name, enabling you to pay the EMI to the bank. In that case, your sister can give gift of the said property in your name, again with the permission of the bank.
As far as the property so long as it remains in the name of your sister, your sister alone (and not her husband) has to decide what she wants to do with it. However, being a husband, he will naturally have a sway over your sister in regard to the property.
If you want to get rid of the same, then ask your sister to first dispose of the property before marriage (hoping that her would be husband is not aware that she has a house in her name - if he is already aware, then he will ask her why she disposed of the property, she should have consulted him etc. etc. - a source for friction between them even before the marriage takes place) with the permission of the bank.
In any case, one cannot do anything without the knowledge and permission of the bank, as the original documents of the property would have been lodged with the bank.
NC
(Querist) 05 April 2013
Hi Anirudh,
Thanks for the reply.
You say that gift deed can't be done as the original documents of the property are with the bank.
But other Experts i.e., Raj Kumar Makkad and Prabhakar Singh have confirmed that gift deed can be done on a mortgaged property.
Could there be a common conclusion as to which is correct?
Anirudh
(Expert) 05 April 2013
I said: In any case, one cannot do anything without the knowledge and permission of the bank, as the original documents of the property would have been lodged with the bank. This is not much different from what Mr. Prabhakar Singh had said.
prabhakar singh
(Expert) 05 April 2013
Unless the deed of mortgage specifically contains a clause of prohibition of transfer by any mean(sell, gift, exchange, mortgage or alienate in any other manner)The gift told by me would be possible even if documents of title are with bank.In those cases Consequences of default would also be covenated there,and for worst the whole debt may become due at default;after all redumption is right vested in mortgagor.
ajay sethi
(Expert) 05 April 2013
since the bank is refusing to permit your sister to gift the property best sell of the same . repay the bank loan . with the balnce funds purchase another property
prabhakar singh
(Expert) 05 April 2013
Well Mr. Sethi!
I am unable to comprehend.Who is Bank to grant permission unless pre covenanted in the mortgage deed.And even if there is a prohibition,consequences of default might also be covenanted,which in worst case could be,that whole debt would become due forthwith.
Here Donee is simply entering into the shoes of donor.They are brother and sister.May be original title deed is with Bank.Let it be there.If eMi is continued to be paid regularly,there shall not come any problem.Problem may arise when default would occur which for worst would be discharge the debt entirely.
ajay sethi
(Expert) 05 April 2013
prbahakarsinghji
the querist has mentioned he does not have enough money to repay the outstanding loan . bank while granting loan must have mentioned in agreement that no thrid party rights would be created without prior sanction of bank . hence best option would eb to sell the property .
if the said property is a flat in cooperative society then society will not transfer flat in name of donee without prior consent of the bank
prabhakar singh
(Expert) 05 April 2013
For a CHS flat I agree with you as mutation problem may arise.
But i am insisting because author has stated
that "We purchased an ready to occupy independent house in the year 2010."
Hence i think it is not a CHS flat.
prabhakar singh
(Expert) 05 April 2013
Dear Author NC!
Try to obtain the copy of the mortgage deed.
Check for any such restriction clause and consequences mentioned for default,then assessing your financial situation,decide accordingly.If they do not provide you copy then request for a format.Usually they have standard printed format with blank space for description of parties and property.
NC
(Querist) 05 April 2013
Hi Prabhakar,
Thanks for the reply.
As per your suggestion I would ask for a copy of mortgage deed from the bank and check for any such clauses mentioned by you.
Anywhich ways I have thought of doing the below thing:
1) I never approach the bank regarding this issue either for transfer or for closure etc.
2) I get a gift deed done between me and my sister.
3) The loan and property papers in the bank continue to be on my sisters name, and i will pay the loan emi it on her behalf (since as already mentioned she is getting married, and she will not be able to pay it here after)
4) I get all the Khatha, EC, Electricity and water bills etc transferred on my name.
5) Her husband's family never ever gets to know that property was in her name at all.
6) When I decide to sell the property in future, I simply close the loan by the money that i get by selling the property, and sell the property at my will. For which i think neither the bank nor my sister should have any problem as the property is solely under my ownership (Am I correct..??)
Please guide if I am wrong in any of the above.
ajay sethi
(Expert) 05 April 2013
bank will send staements on your sister name . you wont be able to get rebate on repayment of loan amount as pr income tax act as the property as per bank records is in sister name .
never do any thing on the sly . take bank into confidence and do the gift deed /sale deed
prabhakar singh
(Expert) 05 April 2013
NC!
I can pass only one remark on you:
"The examinee is better than examiners"
To me all six steps stated by you are perfect in my opinion.
And now you do not need to query about these things,do not allow them to know about gift by any hint.
NC
(Querist) 11 April 2013
Hi All,
Can you please give me a strong point to add in my gift deed, to cover the below points:
1) My sister or her husband/in-laws have no rights on the property after the execution of the gift deed even though the loan on the property stands on her name.
2) My sister or her husband/in-laws do not govern any rights to permit or authorize me or permit me when i decide to sell/lease/mortgage the property at my will and hence shouldn't create any problems for the same.
3) The bank as per section 127 has no rights to interfere/penalize/withheld the property on the execution of gift deed on a mortgaged property.
Please help!!!
Regards
NC
