Hello, My brother owns a plot of land. Me and my brother are investing equally to build a commercial complex consisting of 4 floors in this piece of land. The title of the plot is in name of my brother. I would like to know how to secure my interests - 1. My brother and me want to equally divide the rent earned from this property amongst ourselves 2. My brother wants to retain the title to the property. So what kind of agreement or MOU we should get into where in my interests of rent from the commercial property is protected? Since the title of the land will be with my brother my interest will be at harm in case later 20 years down the lane he wishes to sell of the property. Me and my brother have a good mutual understanding. So how to protect my future generation from the rental share.
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Your brother should not retain title to property if 50 per cent of construction cost is being borne by you
2) ideally brother should transfer 50 per cent share in land and 2 floors to you as you are bearing half of the construction costs
3) it would create legal complications later if you don’t have title to 50 per cent of property
4) your brother or his legal heirs later may refuse to give you half rentals to the property constructed on land
You want legal protection on two aspect, 1. Ensure agreed payment of rent, 2. Right in sale transaction. The law is that title holder of land owns structure on the land. Land and building on land cannot be separated. Thus though you paying for construction your brother will be the owner of constructed building. The safest document for is joint ownership with brother. Execute a joint ownership deed and get it registered. Your share in it you can negotiate with brother and decide. That is between both of you. once decided register a joint ownership.
In the given situation, if both you and your brother would like to develop the vacant site into a commercial complex consisting four floors but your brother though contributing equally for the development of the structure but wants to retain the title of the vacant site, the option before you is that you and your brother enter into a long term lease agreement jointly with your brother on an agreed monthly rental payable to your brother for the leased out vacant site. You both either can enter into a partnership or a memorandum of understanding subsequent to the joint lease agreement by a registered document with the conditions of sharing income derived out of the commercial complex equally or as per the ratio of the investment made by each in the development of this project along with other conditions agreed by both towards the termination of lease agreement.
Alternately you may have to purchase 50% share of the proeprty and both can develop the proeprty in a joint venture as per the mutually agreed conditions including investment and sharing of the rental income or any other income through the jointly owned property.
Dear Sir,
You can draw up a normal contract stating the conditions and get it notarised. As long as there is nothing illegal or in bad faith in the contract, it will always be enforceable in the court of law. Get signatures and the agreement of your brother, and in case of breach of contract, you can always approach the court.
- Since, your brother is the owner of that land , then even you will contributed in the construction a commercial complex therein , you cannot claim the ownership right over the same.
- However, for sharing of the rent income , you can enter into MOU with your brother after narrating all the conditions in details , and registered the same .
- Further , in case of death of brother , his legal heirs can claim title of that plot/built up property.
- Hence, to safe your interest , your brother should transfer the equal right of that property in your name by way of registered Gift deed.
Make a Joint development agreement so that a part of the construction is allotted to you as well so that your brother later on can only sell his allocation and not yours.
1. Execute a contract of profit sharing with your brother to divide the rent.
2. A clause can also be added to obligate him to first offer the property for sale to you.
You can go for mutual registered MOU with consent of all legal heirs
