We would like to purchase a property from a person to whom it was gifted by another person. The original or first owner had owned the property through a bank loan. After clearing the loan, the property was gifted to a relative (a lady whose husband’s grandmother and the original owner’s mother are sisters) by the first owner. However, although she is a relative, she does not come under the definition of relative as per section 56(2) of the Income Tax Act, and sub-registrar offices in Andhra Pradesh follow the same rule. Despite this, the gift deed was accepted and registered in the name of the relative, who is now the second owner.
Our question is whether we can purchase the property from the second owner who received it as a gift from the original owner. Are there any legal issues we should know about? If so, what are they, and what steps should we take before proceeding with the purchase?
The second issue is that there are two registrations for the apartment: one for the respective flat, along with common areas, undivided share of land, and car parking, and another for the builder’s share via office construction in the parking area. The builder has sold his office area of 50.8 sq. yards to all 11 owners equally after demolishing his office in the parking area. However, in our case, the original owner has given a gift only for the flat, which has been registered as a gift deed. Unlike the other owners of the other flats, the original or first owner has neither gifted nor sold 4.61 sq. yards (i.e., 1/11th part of 50.8 sq. yards) to his relative.
So, can we directly purchase the 4.61 sq. yards from the original owner, or should we ask the second owner to acquire the builder’s share of land from the first owner, and then we purchase from the second owner?
The property you are interested in purchasing was gifted by the original owner to a relative who is not considered a relative under section 56(2) of the Income Tax Act, but the gift was still accepted and registered by the sub-registrar office. Before proceeding with the purchase, it is important to have the gift deed reviewed by a lawyer to ensure that it was executed and registered legally and validly. There may also be other legal issues related to the gift that should be examined by a lawyer.
Regarding the ownership of the builder’s share of land, the original owner did not gift or sell a portion of it to the relative who is now the second owner. If you want to purchase that portion, you may need to approach the original owner directly. However, it is also possible for the second owner to acquire the builder’s share from the original owner and then sell it to you along with the flat. Either way, it is important to have all the relevant documents reviewed by a lawyer to ensure that the transaction is legal and valid.
In addition, you should also check if there are any pending legal disputes or liens on the property, and if there are any other restrictions or obligations related to the property such as maintenance fees or taxes. It is also advisable to conduct a thorough inspection of the property to check for any physical defects or damage.
