Home » Laws & Taxes » How to Draft and Register a Relinquishment Deed in Pakistan
If you’re planning on transferring immovable property in Pakistan, especially between family members, you might need to register a relinquishment deed to complete the process. Much like sale deed and gift deed, relinquishment deed is one of the main ways a person can transfer their property by surrendering their own rights, title and interest.
To put it simply, a relinquishment deed is a legal document that is drawn when an individual formally gives up their legal rights on an inherited property by relinquishing it in the name of another co-owner.
However, it is important to understand that relinquishment of rights in immovable property is only valid when the transfer is done between the co-owners of a jointly-held, inherited property. For example, if two brothers inherit a piece of land from their deceased father, one of them may renounce his share in the inheritance to make the other its sole owner. This is usually done when the parent passes away without making a will and the property is inherited by the legal heirs.
Who Can Relinquish Their Rights on a Property?
An individual can only relinquish property to someone who already has a share in the said property. In case there are more than two co-owners or shareholders, any of them can relinquish their rights in favour of others with their consent.
This means both parties, the benefactor and the recipient, need to have some percentage of shares or rights in a joint-owned property. This is usually done for inherited properties, where all the co-owners are legal heirs.
You cannot relinquish your property in favour of a non-owner, or else it will be treated as a gift.
The Difference between Relinquishment Deed, Gift Deed and Sale Deed
The difference between relinquishment deed and sale deed is pretty clear. A sale deed is a legal document or an instrument that proves a seller has transferred ownership, right and title of a property to a buyer for a certain price. However, relinquishment deeds describe the transfer of rights from one co-owner to another in a joint-owned property.
As for the difference between relinquishment deed and gift deed, one can gift their property to anyone within their lifetime regardless of their relationship with them. You can also take a look at our detailed guide on how to register a gift deed in Pakistan for more information on the topic. On the other hand, one can only relinquish their share in a property in favour of another share-holder.
Moreover, relinquishment can be done with or without compensation, whereas a gift doesn’t require any monetary return.
Nevertheless, just like the gift and sale deeds, a relinquishment deed also needs to be signed by both the benefactor and the beneficiary. It also needs to be registered.
Drafting a Relinquishment Deed
There is no set relinquishment deed format in Pakistan.
However, since a deed of relinquishment must be in writing to be valid, there are a few things you must include while drafting it.
Here is a list of details and documents required for relinquishment deeds in Pakistan:
- Title of the document and the date it was created.
- The full name, CNIC number, address, father or spouse’s name and other details of the person executing the deed.
- The full name, CNIC number, address, father or spouse’s name and other details of the person receiving the rights to the property.
- A detailed description of the immovable property, such as its location, allotment details, and such.
- Details of the other legal heirs, if any.
- Details of the shares owned by the other heirs, if any.
- Documents to prove ownership rights of the property.
- The reason for the relinquishment must also be stated in order to prove there was no fraud or coercion involved in the process.
- Usually, the document also has a clause stating that the person executing it won’t have any rights on the property once the relinquishment deed is finalized. It is irrevocable.
- The document must also mention if the executant is making relinquishment deed without consideration or if some monetary transaction was involved.
- The deed must be signed by all the parties/legal heirs along with two witnesses.
- The current valuation of the property can also be stated in the relinquishment deed.
The essentials mentioned-above can vary on a case-to-case basis. Therefore, it is suggested to consult a lawyer to draft a relinquishment deed in Pakistan.
Furthermore, transferring property by means of gift deed or relinquishment deed comes under Capital Value Tax, which is commonly referred to as CVT. You can learn more about it in our comprehensive guide on different types of property taxes in Pakistan. In addition to that, you can also take a look at different types of property fees applicable in Pakistan for further clarification on the matter.
Registering a Relinquishment Deed
The process of relinquishment deed registration is fairly simple and straightforward.
Much like registering a gift deed, one needs to fix a date for registration in the office of concerned sub-registrar and pay the stamp duty on relinquishment deed. The entire process takes between two to four working days on average.
Can a Relinquishment Deed be challenged in Court?
A relinquishment deed can be challenged in court and even cancelled if there seems to be any fraud, misrepresentation or coercion involved in the process.
The Validity of Relinquishment Deed
Once signed and registered, relinquishment deeds are irrevocable.
Meanwhile, in case you’re interested in investing in the property sector but don’t know where to begin, make sure to check out the basics of real estate investment in Pakistan to be successful at the trade. If you’re new to the industry and are having trouble understanding the real estate jargon used by agents and experts, our glossary of common property terms used in Pakistan will definitely help you out.
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