Releasing Rights in Immovable Property

Releasing Rights in Immovable Property

Real estate property can sometimes become a complex issue when it comes to its ownership and multiple owners. Hence, some parties may want to release their rights in a real estate property.

When Does the Need for Releasing Rights Arise?

The need to release rights in a property typically arises in two scenarios:

  1. Jointly Purchased/ Acquired Property: For instance, if a husband and wife jointly purchase a property and later decide to part ways, the husband might want to release his rights in the property. This could be part of a divorce settlement or a personal decision or due to tax implications.
  2. Joint Family Property: In a joint family property, some family members might want to release their share in the property. This could be due to various reasons such as moving abroad, financial needs, or simply not wanting to be part of the property ownership.

In both these cases, the person releasing their rights would have no further rights or interest in the property.

Registering a Deed of Release / Release Deed

The process of releasing rights in a property involves registering a Release Deed before the jurisdictional Sub-Registrar. A Release Deed is a legal document that states that the person releasing their rights will have no further claims, rights, or interest in the property. This document is crucial as it protects the remaining owners from any future claims or legal disputes.

The Release Deed signifies that the Releasor, his assigns, and legal representatives release their share, right, title, and interest claim and demand in the said property. The Releasee will henceforth have the title of the property. There can be multiple Releasors or Releasees in one particular Deed of Release. However, the Karnataka Departments charge stamp duty on an individual basis.

Key Elements of a Release Deed

A Release Deed is a legal document that signifies the relinquishment of an individual’s rights in a property. Here are the key elements of a Release Deed:

  1. Parties Involved: The deed should clearly mention the releasor (the person releasing the rights) and the releasee (the person to whom the rights are being released).
  2. Description of the Property: The deed should contain a detailed description of the Schedule Property, including its location, boundaries, and any other relevant details.
  3. Release Clause: This is the most important part of the deed. It states that the releasor renounces all claims, rights, and interests in the property in favor of the releasee.
  4. Consideration: The deed should mention any consideration (if any) received by the releasor from the releasee for the release of the rights.
  5. Witnesses: The deed should be signed in the presence of at least two witnesses.

Stamp Duty on a Release Deed

The stamp duty on a Release Deed varies based on the relationship between the parties involved. In Karnataka, as of 2024, the stamp duty on Release Deed is as follows:

  • If the parties are not family members, the stamp duty would be as per Conveyance/Sale. This means it would be calculated based on the market value of the property.
  • If the parties are family members, the stamp duty is a flat rate of Rs. 5000/-.

Definition of Family: In the context of property rights and release deeds, the term ‘family’ has a specific legal definition. For the purpose of this clause, ‘family’ in relation to a person means:

  • Husband
  • Wife
  • Son
  • Daughter
  • Father
  • Mother
  • Brother
  • Wife/children of predeceased brother
  • Sister
  • Husband, children of predeceased sister
  • Wife of predeceased son
  • Children of a predeceased son or predeceased daughter

This definition is crucial as it determines who can be involved in the release deed process and the stamp duty applicable. Releasing rights in a property is a significant decision and involves a process to ensure that rights are absolutely transferred to the Releasee. The laws and regulations can vary based on location and individual circumstances.