Real Estate 101: A Guide to the Basics of a Relinquishment Deed

By Lodha

Although viewing and visiting properties has become a breeze, real estate investment comes with a barrage of paperwork and documentation. If you’re a first-time buyer or need a bit of a refresher, having a handy guide to the different documents involved in real estate transactions helps. For instance, when it comes to the transfer of property rights, several legal documents can be involved. One such real estate term is the relinquishment deed, an essential instrument in the realm of property law. Whether you're transferring rights among family members or settling an inheritance matter, understanding the basics of a relinquishment deed is crucial. This guide will walk you through what a relinquishment deed for the property is, its significance, the process involved, and other pertinent details to help you navigate this legal terrain.

What is the Meaning of a Relinquishment Deed?

A relinquishment deed is a legal document in the property market used when one co-owner of a property voluntarily gives up their share of ownership in favour of another co-owner. This deed is commonly used in cases involving inherited property, where one or more heirs decide to transfer their rights to another heir. By executing a relinquishment deed, the transfer of property rights is formalized, and the relinquishing party forfeits all claims to the property.

Features of a Relinquishment Deed

Here are a few hallmark features that set a relinquishment deed apart from other legal documents associated with real estate transactions:

Share and Rights Transfer

As mentioned, a relinquishment deed is an instrument used to waive off any rights, interests, shares and titles about a property. To understand what this means, let’s consider an example. Say A, a mother of two children, passes away and bequeaths her property for sale in Mumbai to her son and daughter. However, the son decides he has no interest in co-owning the property. Here, he can execute a relinquishment deed to waive off his claim to the inherited property. He can transfer his share of the property to his sister in exchange for appropriate consideration. If the son wants, he can also choose not to part with his share of ownership entirely and relinquish only a portion or percentage of the house for sale in Mumbai.

Voluntary Nature

One of the most crucial elements, on which the validity of a relinquishment deed rests, is a voluntary transfer of ownership and rights. To be deemed legal, such a deed, and the relinquishment of property rights it is executing must be voluntarily undertaken. If there is any proof of force or coercion concerning the relinquishment the deed will be considered null and void. Let’s revisit the example we considered earlier. If, in the same circumstance, A’s son had been pressured into relinquishing his share in the property, any deed executing the same would be ineffective. Relinquishment would only work if the son willingly gave up his share to his sister in return for agreed-upon consideration.

Joint or Co-Ownership

While you can execute other legal agreements transferring ownership for all kinds of properties, you can execute a relinquishment deed only for properties that are co-owned or jointly owned. So, as per our example, the flat for sale in Mumbai bequeathed by A is jointly inherited by both the son and the daughter. Since the apartment for sale in Mumbai is jointly owned by the two children, a relinquishment deed applies to the situation.

Transfer of Liabilities

While it is true that a relinquishment deed transfers the rights and shares of a property owner to another, it does so much more. A relinquishment deed also transfers any responsibilities and liabilities attached to the property. If a property comes with financial or legal obligations, the same transfer from one co-owner to another with shares and rights. So, If A’s home had been mortgaged, the obligation would be passed down to the two co-owners and ultimately to the daughter after the son executes a relinquishment deed.

Legality

Like other legal documents, a relinquishment deed must be executed in a prescribed format. Usually, as per the relinquishment deed property format, you must execute the document on a Rs. 100 stamp paper. Once typed out, you have to register it at the nearest sub- registrar’s office in the presence of witnesses. Following such a procedure for a relinquishment deed allows it to become a legally binding document. You will have to pay a nominal stamp duty to register the deed.

Cancellation or Revocation

Although a relinquishment deed is legal, its authority can be challenged. However, to do so, the challenger must show that the relinquishing party was forced or coerced into giving up their rights and shares in the property. As per law, you can challenge a relinquishment deed within three years from the date of transfer. In such cases, all parties to the deed have to consent to cancel it

Do note that a relinquishment deed is different from a gift deed, which allows for the transfer of ownership from one person to another without any consideration. Relinquishment deeds contain an element of consideration in exchange for the waving of rights.

A relinquishment deed is a powerful legal tool for transferring property rights among co-owners, especially within families. Like any other deed, a relinquishment deed charge must be paid in full to complete the property transfer process. Understanding the basics of this deed can help you navigate property transfers more smoothly and avoid potential legal complications. By ensuring that the deed is drafted accurately, signed appropriately and registered with the relevant authorities, you can achieve a clear and uncontested transfer of ownership. Whether settling an inheritance or rearranging property ownership among family members, a relinquishment deed can provide the clarity and legal protection needed for a seamless transfer process