A 07 December 2021

Agreement for construction and payment of share by heirs

I need to prepare a MOU for payment of share of one the heirs of our family property and reconstruction of the same.

We are 2 brothers and 3 sisters. My elder brother has been paid his share of the property as per Islamic law of inheritance. The property is under the name of me and my 3 sisters.

At the time of payment, one of my sisters couldn’t pay her share of the amount given to my brother. I am putting in a clause that states specifically that she will have either of the following options
1. To pay her amount of contribution already paid to my brother
2. To take her share from the property at the price agreed upon earlier, after which she will no longer be a shareholder in the property.
One of my sister is unmarried. In case of her demise, her share of the property will be distributed as per her registered will.
During the reconstruction, expenses relating to common areas such as lift, parking, all municipal works, legal expenses, front elevation, etc. are to be equally divided among the shareholders.
Post construction, any expenses relating to property maintenance will be equally shared among the property holders.
The distribution of the floors will be done based on mutual understanding or drawing of lots.
None of the shareholders will have the right to sell or rent or lease the property to any third-party. In case any shareholder wishes to sell his share of the property, it can only be sold to the remaining shareholders, based on prevailing market rates, with prior notice of 6 – 9 months for arrangement of sale amount.

Please let me know if I need to add further points to the above to ensure that a strong agreement is made and there are no conflicts in the future.

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3 Replies

Aryan Raj 08 January 2022

In response to your query,

Sir, I think you consider every possibility and made a very fair agreement keeping in the goodwill of every member of your family. Every member gets their share of property and everyone has to contribute to make the property better and more habitable.

The only problem I think may arise is from the 6th clause- None of the shareholders will have the right to sell or rent or lease the property to any third-party. In case any shareholder wishes to sell his share of the property, it can only be sold to the remaining shareholders, based on prevailing market rates, with prior notice of 6 – 9 months for arrangement of sale amount.

With this clause you are taking away the free will of an individual to take decisions regarding their property by limiting the options for them. Because you should consider that what if someone is in dire need to sell the property to make some money and none of the other family members are ready to buy it due their own reasons. Then the person is losing his/her own right to make decisions over their own property. I hope my suggestion is helpful and you can make changes and take decisions in the best interests of yourself and your siblings.

Regards,

Aryan Raj

Megha 11 January 2022

Dear Learned Member,

Could you post an example in relation to the above? Thank you.

Aryan Raj 11 January 2022

To answer your query,

Dularia Devi v. Janardan Singh(1990),

In this case the plaintiff an illiterate woman wanted to gift her properties to her daughter. Her thumb impressions were taken on two documents which she believed were gift deeds in favor of her daughter while in reality, the second deed was in favor of the defendants who were executing the deed. Later she filed a suit for cancellation of the sale deed and it was held that the since the woman had absolutely no idea of the nature of the second document,it was considered void.

Although the situation is not similar to yours in this case but the remedies can be taken by other siblings on the same ground which is "Mistake of facts". When there is a misunderstanding of fact by both or one of the parties, it is considered to be a "Mistake of fact".

Regards,

Aryan Raj