Partition Deed For A Property- Everything You Need To Know About

Partition Deed For A Property- Everything You Need To Know About, When there is joint ownership for a property, then the property can be divided using a partition deed as a legal instrument. Here’s everything you need to know about the partition deed.

If in a family, the property is jointly owned by several members of a family, the division of the said property and granting of each member’s share could be done by way of accomplishing a partition deed.

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What Is A Partition Deed ?

Any immovable asset, joint ownership of a property is quite common by many people is a family. This partition deed is required when the co-owners decide to go their own way, as the combined ownership over the property limits their rights.

So, the legal instrument that is used to affect this change is known as the deed of partition or partition deed in legal parlance. And, yes partition deed can be challenged.

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When Do You Need A Partition Deed ?

In the joint partnership though people are joint owners, they are not free to rent, sell or gift the property on their own accord, unless each party agrees to a proposal. Basically, the permission of each co-owner is required to carry out any such transaction. The need for a partition deed arises, when it becomes important to create a clear division of shares in the property.

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Is Verbal Partition Of Property Legally Valid ?

The partition will be valid, as long as a written memorandum of agreement has been signed among the family members pertaining to the partition. This document need not be registered also by paying stamp duty and registration charges.

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How Is Property Divided Through A Partition Deed ?

If a property is being divided between two people who have invested in the purchase, the division is based on their respective contribution. Under the law any undivided property os equally shared among all members unless documentary proof stating otherwise is produced.

In case of inherited property, co-owners would get their share in a property based on their treatment in the inheritance law governing their religion.

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What Are the Inheritance Laws On Partition Deed ?

Partition of any property is subject to the laws of inheritance. Whenever the partition takes place, the share of each member is determined, based on his entitlement under the applicable inheritance laws.

What Is Partition Of Property Under Hindu Law ?

As per the Hindu Succession Act, 1956, a departed Hindu’s assets are divided among his legal heirs, either according to his will, or under the rules stated in the Act if the person has died without leaving a will – i.e., intestate.

But this Hindu Succession Act, 1956, is applicable on the partition in a Hindu Joint Family, the Hindu Partition Act of Property, 1892, is applicable on partition of a property that is jointly owned.

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What Happens To A Property After A Partition Deed Is Executed ?

Once the partition deed comes into enforcement then each share in the property becomes an independent entity. Now, all the divided share of the asset gets a new title as per allocated by the deed. This also provides them the right to deal with their share in a manner they like.

After the partition, each party must also complete the property mutation process, to make the change legally valid.

What Is the Registration Charges And Stamp Duty On Partition Deed ?

Registration charges and stamp Duty is mandatory to get the legal validity for registering partition deed with the sub-registrar of the area in which the immovable asset is located.

Under Section 17 of the Indian Registration Act, 1908 implies that all member have to pay stamp duty charges (under the provisions of the Indian stamp Act, 1899) and registration charge, to get the partition deed registered.

In Delhi, 2% of the value of the separated share of the property has to be paid as the stamp duty on a partition deed. The same rate is applicable on registration of partition deeds in Maharashtra, along with a 1% registration charge.

Impact Of Non-Registration Of Partition Deed

If the partners don’t get the partition deed registered by paying the applicable stamp duty and registration charges, it will have no legal validity. Consequently, the unregistered partition deed will not be admissible as evidence under Section 49 of the Registration Act, 1908.

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Is It Compulsory To Register A Partition Deed?

In 2018, the Maharashtra government said that the process of partition of properties belonging to a Hindu Undivided Family (HUF) and the receipt thereof by a coparcener, do not fall under the definition of ‘transfer’. Consequently, it is not compulsory to register such partition deeds. Note here that in case the partition has been affected through a partition deed, which has not been registered, the deed will not be admissible as a proof in a court of law.

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Difference Between Partition Deed And Partition Suit

A property can be divided under the law by two ways either by way of a partition deed or by a partition suit.

Co-owners go for partition suit when there is some kind of dispute or in cases where the co-owners do not mutually agree to the partition.

Before one can file a suit, they will have to issue a request to all the co-owners, demanding partition. A complete legal process has to be followed as both the instruments, however, serve the same purpose – they create and extinguish rights of co-owners in a jointly owned property.

Word Of Caution

A partition deed should be properly read and then signed which explicitly mentions each aspect of the division. Aside from the names of the parties concerned, the deed must have a clear mention of the date on which the partition is affected.

After thorough checking and the text are final, the deed must be drafted on a stamp paper and the parties involved must proceed with the registration.

Income tax on partition deed

As there is no kind of transfer has taken place as such through the partition, the beneficiaries are not liable to pay any capital gains tax after the division. Thus, it is free of any kind of tax liability.

Sample Of Partition Deed

Provided below is a general format for a partition deed. Note here that this deed is only to give the readers a general view of the deed.

This deed of partition made at __________this _________ day of

(1) Mr._________________, S/o._____________, Age ______years, Occupation__________, Residing at__________________________. Hereinafter referred to as the first party.

(2) Mr_________________, S/o._____________, Age ______years, Occupation__________, Residing at__________________________. Hereinafter referred to as the second party.

(3) Miss_________________, D/o._____________, Age ______years, Occupation__________, Residing at__________________________. Hereinafter referred to as the third party.

WHEREAS;

1. The parties are the members and coparceners of their joint and undivided Hindu Family and a house property situated at ________________, the details of which are given in Schedule ‘A’. Each party hereto is entitled to a share in the said property.

2. The parties desire to implement a partition of the said properties amongst themselves as they no longer desire to continue as members and coparceners of their joint family property.

3. The parties have agreed that the said property will be divided in such a way that:

(a) The property described in the first schedule shall be allotted to the first party exclusively.

(b) The property described in the second schedule shall be allotted to the second party exclusively.

(c) The property described in the said third schedule shall be allotted to the third party exclusively.

4. The parties hereto have proposed to effect and record the said partition in the manner following:

Now this deed witnesseth that

1. Each party hereto grant and release all his/her undivided share, right, title and interest in the property allotted to the other so as to constitute each party the sole and absolute owner of the property allotted to him/her.

2. Each party agrees that they will get the deed executed and registered and will equally share expenses involved in the process.

3. Each party agrees that they will not cause any hindrances or claim and right on the share they have agreed to give up through this partition deed.

Schedule A

(Details of Undivided properties belongs to Joint Family)

Sl.

No.

Description of the property

1

2

3

4

FIRST SCHEDULE

(Property allotted to the share of Sri.__________________________First party)

SECOND SCHEDULE

(Property allotted to the share of Sri.__________________________Second party)

THIRD SCHEDULE

(Property allotted to the share of Miss_________________________Third party)

WITNESS:

1. FIRST PARTY

2. SECOND PARTY

3. THIRD PARTY

So, before making the partition deed make sure everything is clear and proceed legally for a calm separation.

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