1) consent of lender is necessary to execute gift deed as property is mortgaged
2) stamp duty in favour of parents by your wife would be around 3 per cent of market value of property
Gift deed for transfer of property to parents
Hi, Could you please advise if it is possible and allowed to gift the property with an active mortgage. Will I be asked by registrar to get the NOC from lender or it’s not needed. Also what will be stamp duty applicable. Property is located in Dombivali east. Some more information - 1. Property is jointly owned by me and my wife 2. Receipt will my wife’s parents ( mother and father ) 3. There is active mortgage on property.
Asked 4 years ago in Property Law
Religion: Hindu
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8 Answers
Dear Client,
A mortgaged property can be gifted after redemption of mortgage. You can clear the outstanding loan dues and can gift the property without any hassle. In case, you gift/Will a mortgaged property, the donee besides accepting the Gift, also has to accept the burden/obligation of mortgage.In English mortgage, the mortgagor transfers the property absolutely to the mortgagee and binds himself that he will repay the mortgage money on the specified date and lays down a condition that on repayment of money mortgagee shall re-transfer the property.
Under an English Mortgage scheme, the lender is entitled to take possession of the mortgaged property if the borrower defaults on payment. The lender may also proceed to sell the property without any judicial intervention. In other forms of mortgage, the lender needs to produce a court order even for the possession of the property. Section 69 of the Transfer of Property Act, 1882, grants the power of sale to the lender or any person acting on his behalf.
Thanks & Regards
A contingent gift can very much be executed and registered subject to redemption of mortgage by mortgagor. Gift will take place after release of property by mortgagee. Stamp duty in case of gift to blood relation is Rs. 200 in Maharashtra.
A mortgaged property can be gifted after redemption of mortgage. You can clear the outstanding loan dues and can gift the property without any hassle. In case, you gift/Will a mortgaged property, the donee besides accepting the Gift, also has to accept the burden/obligation of mortgage
You need to the mortgage clear before gifting it otherwise the donee needs to accept the obligation of the said mortgage. It's better to gift it after redemption of mortgage
When there is a subsisting mortgage, the gift has no legal effect, unless it is redeemed. The registrar will definitely call for an NOC from the mortgagee.
1. the gift deed can be made
2. but then the donors will be liable to the lender since the borrowers cannot deal with the property without specific consent of the lender
3. the property as at present stands in the name of parents of your wife. so her parents, either as borrower or guarantors to the loan would have given this property to the lender by way of collateral security and also deposited the original title deeds of the property with the lender thereby creating a charge of the lender over the said property
4. also the lender would have registered a charge for the property in its favour with the sub-registrar's office
5. if such charge is registered then the sub-registrar will not register the gift deed without noc of the lender
6. stamp duty on gift deed from parents to child is for now 200 i guess and is set to increase from 1.4.22
- As per transfer of property Act, for a Gift deed, Acceptance is mandatory by the donee.
- Since, the said property is mortgaged , then the transfer and acceptance cannot be completed without the redemption of mortgaged.
- Hence, the NOC from lender is necessary.
