The Deed of Release: A Key Element in Property Transactions

The deed of release plays a pivotal role in property transactions in India, often facilitating smooth transfer and settlement among parties. Here, we have compiled some key pieces of information regarding deed of release such as its types, implications, formats and more.

What is a Release Deed?

A release deed is a legal document used in the transfer of property rights. It is typically executed when one party (the releasor) decides to relinquish their rights in a piece of property to another party (the releasee). This deed is crucial in scenarios where multiple parties hold an interest in a property, and one wishes to give up their share or rights, effectively transferring them to another co-owner or a specified individual.

The release deed is commonly used in family and inheritance scenarios, where a member may choose to forgo their share in favor of another family member. This instrument is different from a sale deed as it usually involves a transfer without monetary consideration, particularly among family members.

Know The Different Types of Release Deeds, Their Applications and Their Implications

Release deeds can be categorized into different types, each serving specific purposes in property transactions. Understanding these types is crucial for anyone involved in property dealings or estate management. Here's a detailed look at each type:

Full Release Deed

• Purpose: This type is used when a releasor relinquishes all their rights and interests in a property to the releasee.
• Application: Common in scenarios where an individual wants to completely transfer their ownership stake, such as in family settlements or relinquishing inheritance rights.
• Legal Implication: Once executed, the releasor has no remaining rights or claims over the property.

Partial Release Deed

• Purpose: Here, only a portion of the releasor's rights or interests in a property is transferred to the releasee.
• Application: Useful in situations where a co-owner wants to give up a part of their share in the property, maybe to another co-owner or a third party.
• Legal Implication: The releasor retains some rights or interests in the property after the execution of this deed.

Conditional Release Deed

• Purpose: This type involves the release of property rights contingent upon certain conditions being met.
• Application: Often used in business transactions where the release of rights is linked to performance criteria or other conditions.
• Legal Implication: The release deed becomes fully effective and enforceable only upon fulfillment of the stipulated conditions.

Release Deed Among Family Members

• Purpose: Specifically designed for property transfers within a family, usually without financial consideration.
• Application: Commonly used for the distribution of property among heirs or as part of estate planning.
• Legal Implication: Often subject to different legal and tax treatments, especially concerning stamp duty and registration charges.

Release Deed in Blood Relation

• Purpose: Similar to the family member release deed but specifically focused on blood relatives.
• Application: Used for property transfer among direct blood relatives, like parents to children.
• Legal Implication: Might have different legal requisites and benefits, especially in terms of reduced stamp duty in some jurisdictions.

Release Deed Without Consideration

• Purpose: Here, the transfer of property rights is made without any financial compensation to the releasor.
• Application: Typically seen in altruistic transfers, like gifting property to a family member or a charitable trust.
• Legal Implication: While no monetary consideration is involved, the deed still needs to be legally executed and registered.

The Implications of a Release Deed

The execution of a release deed indeed has substantial legal ramifications that each of the parties involved must be aware of. These implications include:

Transfer of Rights

The most direct implication of a release deed is the transfer of property rights. This can be either a full or partial transfer. In a full transfer, the releasor gives up all their rights to the property, effectively transferring complete ownership to the releasee. In a partial transfer, only a specific portion or aspect of the property rights is transferred, allowing the releasor to retain some stake or interest in the property.

Tax Implications

Tax considerations are an important aspect of release deeds, and they can vary significantly based on several factors. If the property has appreciated in value since it was originally acquired, the releasor may be subject to capital gains tax, even if the release deed is executed without financial consideration. The release deed must be stamped and registered, which involves costs. These costs can vary depending on the state, the value of the property, and the relationship between the parties involved. In some cases, if the release deed is among family members, there may be concessions or exemptions in stamp duty.

Legal Binding

A release deed is a legally binding document once it is properly executed, stamped, and registered. This means that the terms of the deed are enforceable in a court of law. If disputes arise, parties can contest the release deed in court. However, proving a deed invalid can be challenging, especially if it has been properly drafted and executed. To avoid legal disputes, it's crucial that the deed clearly states the intent of the parties, the property in question, and the rights being released. It should also adhere to all the legal formalities required for such documents.

Release Deed in Blood Relation

In cases involving blood relations, the release deed is a preferred legal instrument for the transfer of property rights within a family. This approach is often chosen due to its specific benefits:

• Reduced Stamp Duty: Many Indian states offer significant concessions on stamp duty for release deeds executed between blood relatives. This reduction in stamp duty makes it a cost-effective option for transferring property within families.
• Simplified Process: The process for executing a release deed in blood relations is generally more straightforward compared to standard property transfers. The legal requirements are often less stringent, reflecting the trust and close relationship between the parties involved.

Release Deed Among Family Members

Release deeds are also commonly used among wider family members, beyond immediate blood relations, for property succession or settlement:

• Estate Planning: These deeds are often employed as a tool in estate planning, allowing for the distribution of property among heirs in a manner that may be more harmonious and agreeable than other methods.
• Legal Recognition: The deed provides a clear legal recognition of the transfer, safeguarding the interests of all involved parties. It helps in avoiding disputes among family members regarding property rights in the future.

Release Deed Sample Format

A standard format for a release deed typically includes:

• Details of the Parties: Names, addresses, and identification details of both the releasor (the party releasing the rights) and the releasee (the party receiving the rights).
• Property Description: A thorough description of the property, including its location, size, boundaries, and any other relevant characteristics.
• Terms and Conditions: Any specific terms or conditions related to the release of the property should be clearly stated.
• Signatures and Witnesses: The deed should include the legal signatures of both parties, and where required, signatures of witnesses to the transaction.

Here’s a sample release deed that you can use as a template-

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RELEASE DEED FOR SELF ACQUIRED PROPERTY 

This DEED OF RELEASE 

executed on this the day of                                                 ,20        ,  by                                                   _            _                                                        s/o                                                                                           residing  

at                                                                                                                                                    hereinafter referred to as the RELEASORS of the One Part; 

AND IN FAVOUR 

OF                                                                         s/o                                                                          residing at                                                                                                                                                    hereinafter referred to as the RELEASEE of the Other Part; 

The term RELEASORS and RELEASEE shall mean and include their heirs, executors, legal representatives and assigns. 

WHEREAS the property measuring an extent of                             sq.ft and building thereon situated in Door No.                   Road in                                                                    Village, in Survey No.                                                & within the limits of                                                             District was acquired by/through the father of the Releasor and the Releasee herein in and by sale deed dated                                      from                                                                 and registered as Document No.              of Book 1 volume                   filed at pages             to              on the file of the Sub Registrar of                                                                          _ 

WHEREAS the father of the Releasor and the Releasee died intestate on leaving behind the Releasor and Releasee as his class 1 legal herirs. 

WHEREAS the property more fully described in the Schedule hereunder is one of indivisible and it has been agreed by the Releasor to releasee his undivided                                                        right in the property in favour of the Releasee and the Releasee has also accepted for the same. 

NOW THIS DEED OF RELEASE WITNESSETH AS FOLLOWS; 

THAT the RELEASOR did not received any consideration from the RELEASEE herein has released and relinquished his undivided                                                        right in the property more fully described in the Schedule hereunder in favour of the RELEASEE herein. 

THAT the RELEASOR here after do not have any right, title, interest over the schedule mentioned property and the RELEASEE hereafter enjoy the same absolutely with full right, title and interest over the property more fully described in the schedule hereunder. 

THAT the RELEASOR covenant and undertake to execute any further documents that may be necessary for assuring the title in favour of the RELEASEE herein in respect of the property more fully described in the schedule hereunder at the cost of the RELEASEE. 

SCHEDULE OF PROPERTY 

In Witness Whereof the RELEASORS have set their hands and Signatures on the day, month and year first above written in the presence of 

WITNESSES:
1.	RELEASOR
2.	RELEASEE

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Documents Required for Release Deed

The essential documents for executing a release deed include:

• Original Property Documents: The title deed and any previous sale deeds to establish the chain of ownership.
• Identification Proof: Valid government-issued identification like PAN cards or Aadhaar cards for all parties involved.
• No Objection Certificate (NOC): If required, an NOC from relevant authorities, such as housing societies or local government bodies, might be necessary.

How Can NoBroker Help

NoBroker, with its comprehensive legal services, offers invaluable assistance in navigating the complexities of release deed transactions. Their team of experienced legal professionals provides expert guidance on release deeds, ensuring that all documents are legally compliant and tailored to individual needs. Check out NoBroker legal services for comprehensive legal advice when it comes to real estate transactions.

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