CA Pooja Gupta (CFO) 04 March 2010

Wedding gift

Hello Folks,

I have come across a situtation and wish to know the best available route to approach the solution:

A father owns a flat and wishes to give it to his son. His consultant has suggested to prepare a gift deed, pay stamp duty (2% * MV) and registration (1%*MV) and submit it to CHS for transfer. The CHS will then charge their respective transfer fees and other formalities, etc.

However, the alternative is to make the son as an Associate Member in the CHS as this seems to be more convenient and less pecuniary.

Please suggest which is better for the future of the son, as there are 2 more legal heirs to the father and the father wants to give this flat to the son only.

Many thanks

CA Pooja

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4 Replies

Hemant Agarwal (ha21@rediffmail.com Mumbai : 9820174108) 05 March 2010

Pooja'ben,

1. Associate membership does not confer any "ownersip rights" over the property of the member and is limited to "representation rights" under the state "housing society acts and rules". BEYOND that, strictly nothing else. "Representation Rights" meaning the rights of the original member. There is "NO FUTURE" for the son, as far as "associate member" is concerned. In other words, "associate membership" is only a idiotic membership in a CHS, without "ANY RIGHTS WHAT-SO-EVER", under the H.S.Act.

2. Associate membership rights "CEASE" to exist after death of the flat owner (member). That is the associate member cannot represent the original member anymore, after demise of original member. AND by default all the surviving legal heir are entitled to fathers share in property, as per Will, if will exists and even otherwise or Intestate'wise.

3. Gift deed is a "final un-disputable deed" in respect of "self-acquired" property, WHEN IT IS EXECUTED DURING LIFE TIME OF Doner, and cannot form part of executable portion of will, if the property instant is mentioned in the will. In other words "Gift" means direct transfer or relinquishment of "ALL RIGHTS" over the property, which is not disputable under any law (subject to legal various parameters).

4. AFTER the Gift deed is duly registered, the other legal heir (under the H.S.Act) "DO NOT" have any rights what-so-ever, over the gifted property. HOWEVER, ancestral property cannot be selectively alienated and / or gifted to only one legal heir, if there are other legal heirs alive, since under the H.S.Act, all alive first-line legal-heir have equal rights over the ancestral property. In such cases Gift deed, becomes null & void.

5. In Maharashtsra, under the MCS Act, there is "NO" transfer charges (premium) that is payable, "IF" the transfer is between family members. Family members is as defined in the bye-laws, as approved by the registerar of coop. However, share certificate endorsement charges of 100 + 500 totalling 600/- is payable by the new member. Beyond that demanding and/or paying anything else will be "illegal & unauthorised" and violation of the coop laws.

Keep Smiling .... Hemant Agarwal