• HUF apartment property sale by Karta - things buyer needs to be aware of

I am buying an apartment in a Housing society in Mumbai. The Flat is registered in the name of a HUF .The Karta purchased it from Builder under HUF in 2009.Now the Karta is selling the property to me(individual). 
Karta wants to send his younger brother with POA to sign the Sale Deed as Karta is very busy Investor. Karta has shared below documents:
1. Surviving Certificate from District Magistrate: HUF has 3 members : It says Karta, his younger Brother, Mother. Father(who created HUF) is died 20 years back.However, there are other members in his family (children, wife etc) as well.
2. PAN of HUF as well as 3 Members. 3. HUF Account cancelled cheque.

Experts, What precautions and HUF specific documents should I ask from Seller to go ahead with this deal?

My preference is that Karta should himself sign the sale deed.I spoke to Subregistrar who mentioned Karta can sign Sale Deed and fingerprint it (in his residence in Haryana) and only POA for Biometrics can be sent with Brother as an option if I am not very keen on Brother with POA signing the deal.

Do i need a Consent from all Legal Heirs? Should purpose of selling flat be documented and proven?
Asked 6 years ago in Property Law
Religion: Hindu

7 answers received in 1 day.

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10 Answers

1) has society issued nOC for sale of flat?

2) check whether all society maintenance bills have been paid till date

3)insist on Karta executing sale deed

4) if POA is executed by karta it needs to be duly stamped and registered

5) insist on consent of other members of HUF

Ajay Sethi
Advocate, Mumbai
94722 Answers
7532 Consultations

5.0 on 5.0

The term 'Hindu Undivided Family' has not been defined under the Income Tax Act. It is defined under the Hindu Law as a family that consists of all persons lineally descended from a common ancestor, including wives and unmarried daughters.

So the origin of the person as a member of HuF does not come from contract but from status of the person in the family.

So children in this HUF can not be excluded.

In other words to get the signature of the children while purchasing the property . They have share in the property and hence without them you will not get a clear and valid title.

Devajyoti Barman
Advocate, Kolkata
22824 Answers
488 Consultations

5.0 on 5.0

Consent from all the members of HUF is necessary because the karta can sell alone only in necessity of family and.distress or for benifit of state in normal circumstances all the members has to give their consent as karta is only care taker not sole owner.

Also if it is a flat in society kindly.check share.cerficate,noc and Maintaince status.

The karta should be himself present or he can though power of attorney for his signatures and presence but signature and consent of other members is necessary.

In case of POA check.it is a registered power of.attorney and attach same with the registered sell deed for your transiction.

Shubham Jhajharia
Advocate, Ahmedabad
25514 Answers
179 Consultations

5.0 on 5.0

1) Karta has to sign the deed and no objection certificate from the legal heirs. And should get registered soon.

Ganesh Kadam
Advocate, Pune
12930 Answers
255 Consultations

4.9 on 5.0

Dear Sir,

My answers are as follows:

Karta wants to send his younger brother with POA to sign the Sale Deed as Karta is very busy Investor. Karta has shared below documents:

Ans: For your information, the Supreme Court banned POA sales from 2011. The relevant information furnished below.

1. Surviving Certificate from District Magistrate: HUF has 3 members : It says Karta, his younger Brother, Mother. Father(who created HUF) is died 20 years back.However, there are other members in his family (children, wife etc) as well.

Ans: It is right, you must take signature of the kartha as vendor and signatures of other members of the family as consenting witnesses on the sale deed.

2. PAN of HUF as well as 3 Members.

Ans: Please take Xerox copies of Pan Card of HUF and all of its members. It is better if you take copies of Aadhar Card also.

3. HUF Account cancelled cheque.

Ans: Yes.

Experts, What precautions and HUF specific documents should I ask from Seller to go ahead with this deal?

Ans: There must be a recital in the sale deed to the effect that it was so sold by the kartha of the HUF to meet legal necessities of HUF.

No property sale on power of attorney: Supreme Court

Property sales through the common practice of general power of attorney (GPA) will not give ownership title to the buyer.

In a landmark judgment that is expected to send a large number of property owners into a tizzy, the Supreme Court held that the GPA method of immovableproperty sales is not a valid form of transfer of property.

A three-judge bench presided over by Justice R. V. Raveendran said that property can be lawfully transferred only through registered sale deeds.

"A power of attorney is not an instrument of transfer in regard to any right, title or interest in an immovable property," the bench said, after interpreting various provisions of the law concerning property sales. However, the bench said the judgment will not affect "genuine transactions" under the GPA.

The judgment delivered on Wednesday would have an impact on both freehold and leasehold properties and affect the mode of transfer of property in Delhi and the National Capital Region (NCR) where GPA sales are very common. Even though it can cause some hardship to those who have already purchased property through the GPA, the order will help curb evasion of duties, flow of black money into real estate and also save people from being cheated by unscrupulous owners selling the same property to several people.

Kishan Dutt Kalaskar
Advocate, Bangalore
6136 Answers
487 Consultations

4.8 on 5.0

1) specific POA can be executed by karta in favour of family member

2) karta can sell property fir benefit of estate

3) minors cannot execute the sale deed .

4) notarised consent letter of members can be taken

5) issue public notice before purchase of property

6) you don’t need IT returns of HUF

Ajay Sethi
Advocate, Mumbai
94722 Answers
7532 Consultations

5.0 on 5.0

As per the Supreme court judgement the POA will not be a valid document for transfer of property through sale. Therefore kindly be alert about the same.

The consent letter can't be registered but notarised. But if all the legal heirs sign the sale deed it will be feasible.

Prashant Nayak
Advocate, Mumbai
31951 Answers
179 Consultations

4.1 on 5.0

As rightly suggested the Karta though can sell property during distress or for benifit of the estate but if there are consenting members of HUF available or guardian of minor members than it is better to take consent from them to avoid.future litigation.

The expression welfare of estate can be explained in recitle in deed that how this will help the welfare of HUF estate.

a)You can get consent letter attached to the sale deed and get it registered along with it.or consent can be given In sale.deed.itself as consenting members.

b) No you don't need there IT returns.

C)not proof to the effect but the reason should beentioned ellobratly.

d) for registering purpose and sale deed copy of his government photo id card is required along.with photos.

e) The guardian of minor can give consent on their behalf you can check.id proofs.of the minor.and said guardian can give consent.father is natural.guardian in hindu law.

f) though not required if the title is clear no dispute but if you find there can be any future claim from anyone third party advertise in.2.local.newspapers as notice.

Shubham Jhajharia
Advocate, Ahmedabad
25514 Answers
179 Consultations

5.0 on 5.0

HUF consists of a common ancestor and all of his lineal descendants, including their wives and unmarried daughters.

HUF usually has assets which come as a gift, a will, or ancestral property, or property acquired from the sale of joint family property or property contributed to the common pool by members of HUF.

A Karta or Manager of a HUF has all the powers to manage the family and its assets, being head of the family.

It has long been, settled that the managing member of a joint Hindu family has power to alienate for value, joint family property either for family necessity or for the benefit of the estate so as to bind the interests of all the undivided members of the family whether they are adults or minors or widows.

section 38 of the Transfer of Property Act. That section since the Amending Act 20 of 1929 has become applicable to Hindus. It runs thus : “Where any person, authorized only under circumstances in their nature variable to dispose of immovable property, transfer such property for consideration, alleging the existence of such circumstances, they shall, as between the transferee on the one part and the transferor and other person (if any) affected by the transfer on the other part, be deemed to have existed, if the transferee, after using reasonable care to ascertain the existence of such circumstances, has acted in good faith”.

The term legal necessity does not hold any precise definition due to the varied no. of cases that are seen and it being extremely difficult to explain it in exact terms. Still, under interpretation it can be stated that the legal necessity of a family is with regard to the necessities of a family and the alienation being in requirement of that need.

The purchaser is bound to enquire into the necessities for the family to sell, and to satisfy himself, as well as he can, with reference to the parties with whom he is dealing, that the manager is acting in the particular instance for the benefit of the estate.

Being the supreme head of the family, a karta holds the power to look after the family matters and the property that belongs to the family.

T Kalaiselvan
Advocate, Vellore
84921 Answers
2195 Consultations

5.0 on 5.0

Neither the karta or any other co-parcener has the right to alienate the joint property of the family but in exceptional situations wherein the alienation becomes binding upon all the members of the family. The Dharmashastra recognizes this power of the karta to alienate the property but under some specific situations only. They have been stated below:

Apatkale (Necessity in legal terms)

Kutumbarthe (Estate’s benefit)

Dharmamarthe (Obligations of religious nature)

Necessity in legal terms

This is also a broad criterion for the alienation to take place. In it, the benefits which the estate gains through any such specified alienation by the Karta is to be considered as valid. Such beneficial contracts of property alienation are encouraged and the karta does hold the right to go forward under his prudent discretion.

The sale of property by Karta as a manager is no doubt a delegated power on behalf of the members of the HUF hence it should be acted on the interest of the HUF members and not on individual interests.

Broadly speaking, benefit of estate means anything, which is done for the benefit of the joint family property.

It was re-iterated through various case laws that if the property owned by the specific joint family is sold by the karta due to a valid legal necessity and also that the price in return was also reasonable, just the fact that a portion of the price was not considered to have been not applied for the purpose of necessity, cannot render the whole mechanism invalid.

Considering a limitation in the matter, through this paper, it has been analyzed that even though the Karta holds supreme managerial and alienation powers in the family but if he gets into a contract where it is apparent that the family cannot complete its obligations in monetary terms, the liability cannot be shifted to ancestral property sale. Nevertheless, if there is an acquisition made by the Karta on behalf of the joint family even through the loss of a portion of an ancestral property, it is binding upon the minor members of the family too and they cannot impeach this contract for which the benefit has been enjoyed, upon attaining majority.

You should always obtain a proper legal opinion from an experienced lawyer in the local before venturing into the purchase of immovable assets involving huge capital.

T Kalaiselvan
Advocate, Vellore
84921 Answers
2195 Consultations

5.0 on 5.0

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