Legal Guide

Gift Deed property can be sold or not?

by Bhavya Choudhary · 4 min read

gift deed property can be sold

In India, many properties are bought and sold but it is very crucial to know whether a property that is received through a gift deed property can be sold or not. 

The laws at present define if a gift deed property can be sold at the donee’s free will as they are the receiver of the registered deed. 

What is a Gift Deed?

  • A deed of gift is the voluntary transfer of ownership of any movable or immovable property with registered documentation as per the law provisions under the Transfer of Property Act, 1822.  
  • The registration of a gift deed is mandatory for shifting ownership of any immovable property. 
  • The transferor is known as the donor and the transferee is known as the donee. 
  • The deed of gift is irrevocable and cannot be claimed back until proven duress coercion. It holds the same value as that of a sale deed
  • The gift deed property can be sold and used by the receiver according to the Transfer of Property Act.

Whether Gift deed property can be sold or not?

The answer is yes, gift deed property can be sold but only if it is registered under the provisions of the law without the attachment of any condition. It should be registered under the receiver’s name because it holds the same value as that of a sale deed.

If the gifted property is not conditional, no individual can revoke it, and gift deed property can be sold by the owner because the property is now in their name per the law. The disposal of any property received by a Gift deed is okay but if the trace of any forgery is found, it can be annulled.

Validity of Gift Deed 

The Gift deed is valid forever, as long as there is no forgery or forceful commencing/fraud presented in the court with proper evidence. If the evidence that is provided proves to be true, the deed will be nullified and the donee will no longer be the owner as per the provisions of law. 

The third party can get the deed annulled by proving duress coercion in court. The gift deed property can be sold if these grounds are clear and registration is completely done.

Grounds to challenge any property that is received by Gift deed

A registered deed will be effective in the eyes of law and will come into effect immediately after all the legal procedure is completed. However, there are some points where the gifted property (movable or immovable) can be challenged or annulled. It is based on these grounds that if a gift deed property can be sold or not.

These are:

  • The donor gifting the property was not the authorized owner of it and it was not a registered property. If the donor is not the sole owner, then the property is canceled for gifting.
  • The property was valued incorrectly and the stamp duty or government fees weren’t cleared.
  • There was forgery involved while making the documents of registration i.e. it was done by fraud or force. The gift deed property can be sold only if these clauses are cleared by law.

Purchasing a gifted property

The property received by a donee can be sold and so the buyer is liberated to purchase the same but there are some points to be noted while buying such property. The gift deed property can be sold if only that comes in terms with the legal provisions.

  • The property should be a registered property under the Registration Act 1908 (Sec 18) through a Sub- registrar.
  • The stamp duty and tax should be paid and cleared so that you don’t get at risk of revocation.
  • Make sure the gifted property which any individual is purchasing has proper documents and no conditions attached as it may cause third parties to have the resemblance of right in the property.

Precautions

  • One must check the clauses where the transfer, selling, or gifting is mentioned and its fair usage is defined. The status of property that was in the donor’s name must be checked too through applying an EC, and this will keep the records clean for future applications. 
  • Gift deed property can be sold only if it’s registered, verification of every document legally is required. Any future litigation can be avoided if these precautions are exercised.
  • If all these points are comprehensive, the gift deed property can be sold or bought without any issues but still, it is highly recommended to take legal advice before buying or selling any gifted property.

Gifting the property which is inherited through a Gift deed

  • The documents include details of donor and donee, details about the property, and its value. 
  • The charges of stamp duty and registration that needs to be cleared and any mentions of further conditions (if any).
  • It does not have a sale consideration like that of a deed of sale and gift deed property can be sold or gifted voluntarily by registration with the sub-registrar. 
  • It is okay to gift such property which is inherited. Gift deed property can be sold or gifted again just by making sure the documents are legally verified and registered. 
  • It is important to take legal advice beforehand to avoid altercations in the future.

Clause that states “donee shall not sell the gift” 

  • Gift deed property can be sold if registered legally under every provision of the law. 
  • But if the deed contains terms and conditions regarding the clause that it cannot be manipulated or sold in any way by the donee, or if such happens the deed will be revoked and reverted to its lawful owner, it needs to be checked and confirmed as provided under the section 126 of Transfer of Property Act.
  • Keeping every legal clause in mention, the aforesaid will not apply if no such condition is attached and free will was found. 
  • The gift deed property can be sold as per the transferee’s wish and disposed of as per their interest.

Conclusion 

The gift deed property can be sold and disposed of as the receiver wants as now they are the legal owner of the property and any litigation regarding it can be avoided by taking an attorney consultation. Apart from saving time, attorney consultation guides you in the right direction.

To get the gift deed enforced in the Court of Law, it must be registered. One must get the gift deed registered by an expert lawyer.

Bhavya Choudhary

Written by

Bhavya Choudhary

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