Processing Housing society inheritance

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Before we proceed let us gain a clear understanding of some legal terms with regard to Housing society inheritance:

Inheritance – The practice of transferring property, title, debts, rights, and obligations to a descendant upon the death of an individual either by way of ‘will’ or through the prevalent laws of succession is called inheritance.  

Will – Under the Indian succession Act 1925, a will is defined as a legal document or declaration indicating the will of the person. The person who makes the will is called a testator and the person for whom the will is made is called the legatee.  Legal Heir – In Housing society inheritance, an heir is a person who will succeed and inherit the estate of their ancestor who dies.  

Ancestral & Self Acquired Property:

Ancestral Property – This property is inherited by the deceased through 3 generations. 

Self-Acquired Property – This property is purchased or acquired by the deceased during the course of their lifetime.

Nominee – A nominee is a person who is authorized to receive their assets and properties on behalf of a deceased person in Housing society inheritance. The nominee holds the transferred property or assets of the deceased till the time a legal heir of the said property is/are chosen.

What do the present Housing society inheritance Laws say?

According to a supreme court ruling, owning a property is a human right. Although in a 1978 constitutional amendment, right to property ceased to be a fundamental right. But, in a welfare state, property ownership rights are still a human right and no one can encroach upon your property. Therefore, we have the concept of heirs who can inherit the property legally.

An heir is a person who will succeed and inherit the estate of their ancestor who dies. An heir can either be of any gender. Under Indian law, the person whose name has been mentioned in the will of the deceased is the legal heir. In the absence of a will, the legal heir for the deceased person’s property is chosen by the relevant succession or property inheritance laws. These inheritance laws vary depending on the different religious faiths in India. Below, we have listed down the Housing society inheritance laws and rights pertaining to the respective religions of every religious community:

Hindu Succession Act 1956

This act came into place to ensure that both sons and daughters get an equal share in the inheritance of a property. It applies to Hindus, Jains, Buddhists, and Sikhs. Under the act, there are different classes of heirs over the shares of a property depending on different relatives. They are classified as follows:

Class I Heirs: Class I heirs consist of wife, son/daughter, mother, son/daughter of predeceased son/daughter and widow of the predeceased.

Class II Heirs: If the deceased person doesn’t have Class I heirs, then the class II heirs are entitled to share the property. Class II heirs consist of Father, Grandparents, Grandchildren, Brothers, Sisters or other relatives.

Class III & IV (Agnates and Cognates)

Agnates: In case there are no Class II heirs, then the property goes to the agnates of the deceased. Agnates are blood relations to the deceased through males. For example, brother’s son, brother’s daughter, son’s son, etc.

Cognates: These are blood relations to the deceased through females. For example, sister’s son, sister’s daughter, daughter’s son etc.

Muslim law of Housing society inheritance:

There are 4 sources of religious texts and Islamic law sources:

1. Holy Quran
2. The Sunna (Practice of the prophet)
3. The Ijma (consensus of learned men of the community on what should be the decision on a particular point)
4. The Qiya (Analogical deduction of what is right and just in accordance with good principles laid down by god)

Muslim law recognizes two types of heirs:

(1) Sharers – Individuals who are entitled to a certain share in the property of the deceased.

(2) Residuaries – Individuals who take up the share of the property that remains after sharers have taken over their share.

Under Muslim law there are two different types of succession for a property when it comes to Housing society inheritance:

1. Testamentary Succession – If an individual has died after creating a will then inheritance in this situation will be governed under the relevant Muslim Shariat Law as applicable to the Shias and the Sunnis respectively.
2. Non-Testamentary Succession – The Muslim Personal Law (Shariat) Application Act, 1937 gets applied.

In cases where the subject matter of property is an immovable property particularly situated in the state of West Bengal or falls within the jurisdiction of Madras or Bombay High Court, the Muslims shall be bound by the Indian Succession Act 1925.

The Christian law of Housing society inheritance

This is governed by The Indian Succession Act, 1925. Certain customary practices also influence the principles of inheritance for Christians. These practices have also been upheld by few courts in India.

Just like the laws for Muslim Inheritance, the concept of succession depends on two factors for Christian Housing society inheritance:

1. Testamentary Succession – When the deceased has left a will bequeathing their property to specific heirs.
2. Intestate Succession – When the deceased has not left a will and the law governing the deceased determines how their property will be devolved.

Standard Apartment Bye Laws to Recognize Inheritance

Transmission of flats takes place through two ways:

1. When the flat owner has made a nomination before death.
2. When the flat owner has not made any nomination before death.

Section 25 of the Maharashtra co-operative societies Act, 1960 provides that a member would cease to be a member of a society on death. However, their holdings and other interests do not lapse, but they are passed onto their legal heirs or representatives and the society is bound to transfer the shares or interest to them as provided in section 30 of the Act.

Section 30 of the Maharashtra co-operative societies act, 1960 (Act no. XXIV of 1961 Mah) states that on the death of a member of the society, the society shall transfer the share or interest of the deceased member to person or persons nominated in accordance with the rules and bye laws.

• Model bye laws in bye-law 33 clarifies that a person acquiring membership by nomination shall hold the flat in trust till the legal heirs are brought on record. They shall not have the right to ownership and shall not create third party interest or alienation in any way whatsoever.
• The procedure for nomination by a member of a co-operative society is provided by laws of the cooperative Housing society, bye law no. 32, which states:

“A member of the society may by writing under their hand in the prescribed form, nominate a person or persons to whom the whole or part of shares and/or interest of the members in the capital/property of the society shall be transferred in the event of their death.”

• Rule No. 25 of the Cooperatives Societies Rules, 1961 says that in order to nominate a person, a member of the society has to either make and sign a document or make a statement in the book kept for that purpose by the society. Such a document made by the nomination shall be deposited with the society during the member’s lifetime where the nomination is made by a statement. Such statement shall then be signed by the member and attested by witness.

• It’s important to note here that a nominee is not the absolute owner of the property in Housing society inheritance. The nominee simply holds the property in trust for the real owners for the purpose of dealings with the society. A nominee shall not create third party interest or alienation in any way whatsoever.

To know about the detailed procedure for transmission when nomination is made both by the flat owner and when no nomination is made by the flat owner or the nominee, read this blog. 

To understand the laws and rules binding every procedure, click here.

Read our blog on Property Inheritance Laws: Nominee VS Legal Heir to understand the rights of nominees and legal heirs. 

MC Speaks…

We spoke to a Management Committee member of Calcutta Greens, Mr. Suman Mazumder, who sheds light on how Inheritance is processed in their community. Here’s what he had to say on Housing society inheritance: 

“When the inheritor(s) present the legal documents (Mutation & Form C) the Association recognises the new owners formally. However, access to apartments to the survivors (example, spouse & children) is not restricted. Also, POAs (Power of Attorney) are granted access.” 

“When valid documents (Id proof, Mutation, Form C, POA document, etc.) are not presented to the committee, Management Committees can refuse to recognize the inheritance of a unit.”

Documents Required for Inheritance

This section will give you a clear idea on the documentation required for inheritance of a property. The legal formalities for obtaining ownership over the property of a deceased person depends on what kind of property it is, your rights over it, how many legal heirs can claim its ownership and other such conditions listed below.

Title Transfer

• In the case of immovable assets such as a plot or house, the mutation process (transfer of land title from one person to another in all government records post inheritance) must be conducted for Housing society inheritance. 
• Change of title ownership in government records will allow you to use the property for any loan mortgage, rent agreement, or sale.
• This process takes place at the local competent municipal authority office in the jurisdiction of the inherited property.

In the presence of a Will

• If the deceased has left a will on self-acquired property, a single heir will need to submit a death certificate, copy of Will, and property papers to get ownership transfer.

• When there are multiple heirs, the will needs to be registered as per law with the help of a legal executor, if they challenge other heirs for any discrepancies in the law.

In the absence of a Will

• If the deceased does not leave any will, then the rules of succession will be applied on the property. 
• One might need to prepare an affidavit with a no-objection certificate from the other legal heirs or successors (if any).
• Alternatively, a letter of administration can be obtained from a competent court to administer the property of the deceased.

Other important documents in case of assets include ownership documents of both movable and immovable properties.

Taxation and other conditions under Housing society inheritance

• If any consideration is paid to the heirs or claimants to acquire the share, then this should be mentioned in the transfer papers.
• If the inherited property is occupied by someone else, than the occupant can claim the property if the heirs don’t claim it within 12 years. So, it is advisable not to delay the legal and property transfer.
• While there is no tax liability at the time of acquiring an inherited property, profits made on sale are liable for capital gains tax.
• Also, it’s crucial to have clear ownership evidence over the property. The process of transfer is smoother when all property documents are in place. But if it’s an ancestral property and proper documents are not available, then one needs to trace the title of the property. To do so, one might require the help of a legal advisor or a lawyer.
• Housing society inheritance states that if there is an outstanding loan on the inherited property, then it can only be transferred with the written consent of the lender. If the borrower had taken home loan insurance, the insurance company would pay the outstanding loan amount. Once the loan is paid by the insurer, get a loan clearance certificate from the lender along with the mortgaged original documents.
• If the property is on a lease, then one must oblige to the lease agreement signed between the lessee (the predecessor) and the lessor.
• A simple agreement signed by the lessee stating that the legal heirs of the deceased shall be considered as the new lessors can be executed if the legal heirs are interested in continuing the lease.

Landmark Legal Cases and Court Rulings on Inheritance: 

1. Court decisions on the Transfer of Flat to Nominee – Indrani Wahi VS Registrar of Cooperative Housing Societies and Others (‘Indrani Wahi Case’) 

• In this case, the court considered the provisions mentioned under the West Bengal Cooperative Societies Act, 1983 (‘West Bengal Act’) wherein the cooperative society ought to transfer the shares and interests of such members in the name of the nominee. Since the cooperative society came under the West Bengal Act the society had no option but to transfer the shares and interests in the name of the nominee after the death of the member.
• In a landmark decision that proved to be a step in the progress of making laws equally fair to women, a three judge bench of the Supreme Court held that daughters and sons have equal coparcenary rights in a Hindu undivided family. This happened in the case proceedings of Vineeta Sharma VS Rakesh Sharma on 11 August 2020. A 2005 amendment which was passed to grant equal status to both sons and daughters when it came to coparcenary rights was upheld in the former case. Before that, only male coparceners were allowed the privilege.

If you’ve gone through the blog, you might think – Wow, that is a lot of documentation to arrange for. But guess what? ADDA App has a feature that will help you collate all your inheritance related documents in a single place. A digitized storage means you won’t have to worry about them getting lost. These are easily referable and shareable outside the app as well.