Half-baked legal knowledge is high risk in realty
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A book which has informative chapters on agreement to sell an immovable property, sale, mortgage, lease, gift and exchange
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A had two sons, B and C, and a daughter D. During A’s lifetime, both sons and the wife died. Son B had two sons, E and F. E died during B’s lifetime and was survived by his widow, W. Son C did not marry and was not survived by any heir. A died intestate, that is, without leaving a will. Now, who should get how much of A’s property?
Answer: D, the daughter gets one half-share; grandson F gets one-fourth share; and W, the widow, one-fourth.
This is one of the examples in ‘A Handbook on Real Estate Investment – A Legal Perspective’ by Anupam Srivastava ( www.manupatra.com), in a chapter on inheritance. “Acquisition of an immovable property through the means of inheritance is perhaps the most common and most certain way of transfer.” Yet, the law governing this is the personal law of the respective religion, rather than the Transfer of Property Act, 1882.
Succession that happens when there is no will is called non-testamentary. When there are no heirs to the deceased, Section 29 of the Hindu Succession Act, 1956 says that such property would devolve on the government. This Act governs intestate succession among persons belonging to the Hindu, Sikh, Buddhist, and Jain communities, apart from serving “as a residuary law for persons belonging to other religious beliefs or sects, who are not Muslims, Christians, Parsis, or Jews,” explains the author. Under the Islamic law of inheritance, ‘heritable property’ is what is left after the following deductions: “funeral expenses, expenses of obtaining probate and letters of administration from the court, wages for personal service to the deceased prior to three months of his death, debts, and legacies subject to the limits of testamentary power.”
The law on intestate succession among Jews and Indian Christians is the Indian Succession Act, 1925, provided the person is domiciled in India.
A fusion
The book has highly informative chapters on agreement to sell an immovable property, sale, mortgage, lease, gift and exchange. Writing in a simple and understandable style, Srivastava attempts “a fusion between the traditional laws of transfer of property enacted almost 100 years ago with more liberal laws for investments made in recent times.”
Real estate has generated immense interest in recent times, but the transactions are predominantly ‘not very organised’, rues the author. In many cases, the intending transferor and the transferee do not have much information about the legality of transaction; they “rely mostly on half-baked information and practices employed in the trade.”
Knowledge of real estate related law is a must, therefore, right from school days. Do you know, for instance, that oral transfer of immovable property is allowed by law, subject to a cap of Rs. 100 as the transaction value?
“All instruments in writing for transfer of immovable property require registration of the document.” Registration serves as a public record, and is open to inspection. “A person intending to acquire an immovable property is expected to check the antecedents of the property before signing the document of transfer.” A visit is needed to the office of the Sub-Registrar of the district where the land is situated because that is where you would find all the records of previous transfers of the land.
Where the deals involve foreign nationals, NRIs (non-resident Indians) and PIOs (persons of Indian origin), FEMA or the Foreign Exchange Management Act, 1999 (Acquisition and Transfer of Immovable Property) Regulations, 2000 come into play. These provisions become applicable even where a foreign national wants to acquire an immovable property in Indian currency, and vice versa.
The regulations aim to promote foreign investments in real estate, while at the same time protecting the basic structure of the economy, says Srivastava. Thus, foreign nationals, foreign companies, NRIs and PIOs are barred from acquiring “agricultural and plantation properties and farm houses.”
To help you build on your legal knowledge that can stand you in good stead when traversing the high-risk realty realms, here is one more example from the book: A had two daughters, D1 and D2. Both the daughters married, D1 to H1, and D2 to H2.
D1 died during the lifetime of A, and was survived by H1, and son, S1. D2 had two daughters X1 and X2. A died intestate. How much will H1 get?
The answer is ‘nothing’. D2 gets a one-half share, and S1 gets the other half.
D. MURALI
( dmurali@thehindu.co.in)
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