Property Gift Deed: Step-by-Step Guide

There are many types of property deeds, such as mortgage, sale, and gift deeds. Most people know mortgage and sale deeds, but only a few are well-literate about gift deeds and its nature. In this article, we will clarify all your doubts and questions regarding gift deeds and how a gift deed is drafted.

What is a Gift Deed?

A gift deed is a legal document that allows an owner to transfer their property to another person. If a person, on their own, transfer his ownership rights to another person without any compensation in exchange, is refered as Gift Deed. The nature of a gift deed differs from other deeds, as in other deeds, we get something in exchange for our property, such as money or other assets. But in a gift deed, as we know by its name, we don't expect anything in return; this is why it is called a gift deed. 

Section 17 of the Indian Registration Act of 1908

By Section 17 of the Indian Registration Act of 1908, the Deed of Gift has to be registered with the sub-registrar. When both parties are available, the transfer is considered genuine. According to specific other Property Gift Deed Rules, a Gift Deed may be deemed void under Section 123 of the Transfer of Property Act if it is not registered or the individual fails to do the same.

The two individuals concerned:

       •  The donor is the one who gives gifts.
       •  The donee is the person who gets it. 

Property Gift Deed Rules

A gift deed is only valid if these requirements are fulfilled:

       •  The transfer should not be forceful
       •  Donors must be sound-minded
       •  Property should be encumbrance (dispute) free.
       •  The deed must indicate the immediate transfer of ownership
       •  No compensation in exchange 
       •  Should be registered in the sub-registrar office
       •  must be signed by the donor, the donee, and two witnesses

How to Draft a Gift Deed?

Drafting a gift deed involves several key steps. Begin by titling the document as "Gift Deed" and include the date and place of execution. Next, provide full details of the donor and donee, including names, addresses, relationships, dates of birth, and signatures.

Clearly describe the property being gifted, detailing its location and dimensions. The donor must declare that the transfer is made out of love and affection without monetary consideration and confirm they are mentally and physically healthy. The donee must accept the gift during the donor's lifetime. Ensure the deed is signed by at least two witnesses, including their names and addresses.

The gift deed must be printed on stamp paper per state requirements and registered at the local sub-registrar’s office for legal validity. Required documents include:

       •  The original gift deed.
       •  ID proofs.
       •  PAN cards of both parties.
       •  Property documents.
       •  An encumbrance certificate.
       •  ID proofs of witnesses.

Lastly, remember that the property should be free from legal disputes or mortgages. Proper registration is essential to ensure the gift deed's legality.

How To Cancel Gift Deed Property?

Canceling a gift deed can be complex but is possible under certain conditions. There are several reasons for cancellation:

       •  The donor (giver) and donee (receiver) can mutually agree to cancel the gift deed by signing and registering a revocation deed.
       •  The donor can cancel if the donee has yet to accept the gift.
       •  If the gift deed includes specific conditions the donee fails to fulfill, the donor can revoke the gift.
       •  In cases where the gift was given under fraud, coercion, or undue influence, the donor can go to court to cancel the deed.

The process begins with consulting a lawyer to understand the options available. The donor must draft a petition outlining the reasons for cancellation and file it with the court. During court proceedings, both parties may need to present evidence, and if the court finds valid reasons, it will issue an order to cancel the gift deed.

Once the court order is received, the cancellation must be registered with the same authority that registered the original deed. Several documents are required to cancel a gift deed, including the original, valid identification proofs for both the donor and donee, any evidence supporting the grounds for cancellation, and the court order, if applicable.

It’s important to remember that only the donor can initiate the cancellation process, and it should be completed within the legal time frame to ensure the property rights revert to the donor. 

What Are The Rights Of Donee Gift Deed Property?

The gift deed mentions that the donee can lease/sell/ or keep the property as mortgage as their will.

How do you check if a gift deed property Is valid?

It is legally effective only when a gift deed is registered with a sub-registrar. For a Gift Deed to be legal, both parties must sign the necessary paperwork and pay the stamp duty and registration fees. The most sought-after investment for any individual is real estate.

Conclusion

A property gift deed is a vital legal document facilitating the transfer of ownership without compensation. Proper drafting, registration, and adherence to legal requirements are essential for validity. Understanding the rights and cancellation procedures further ensures a smooth transfer, making gift deeds a valuable option for property transfer.