Legal impediments may arise when receiving the ownership of lands and houses and in granting ownership of such property to another person. Therefore, it is important to know about the disposition of property prior to the death and ownership after the death of a person. The purpose of this article is to provide brief awareness about the legal position in disposition of the ownership of someone’s property and in gaining the ownership of the same after the death.
You may have received the ownership of a property by way of a purchase, a gift, a grant or by long term possession of a property. Despite the ownership, the said property is developed and enjoyed by you or on your behalf with your permission. Furthermore, the owner whilst in the possession might lease out the property or obtain loan facilities by way of a mortgage. Accordingly, during the lifetime all contracts and accreditation of the property are carried out by the property owner or by someone else who has been granted the power to do so.
In terms of the provisions made in the Prevention of Frauds Ordinance No. 7of 1840, all transaction affecting immovable property should be carried out through a deed attested by a notary Public. In terms of the provisions made in Section 2 of the said Ordinance, such deed should be in writing and signed by the party making the same or some person lawfully authorized by such person in the presence of a licensed notary public and two or more witnesses presence at the same time and be duly attested by such notary.
In case the legal owner of a property wishes to sell the land to a certain price, he can carry it out through a deed of Transfer and the stamp duty and the other respective payments of the relevant deed has to be paid by the intended buyer of the property.
Also, the land can be granted to another person based on love, kindness, and affection with out expecting any financial benefit. This usually happens between members of the same family. In such a situation a deed of gift is prepared and signed by both donor and the donee. In case if the donee is a minor, or if he has some disability, then the deed can be accepted by another person on behalf of donee.
Furthermore, the donor can gift the property under various conditions and in most cases the property is given subject to the life interest of the owner or by someone nominated by him. In such a case, the recipient of the gifted property is entitled to the full right of the property only after the death of the other person who is having the said life interest.
Also, when dispositioning a property which is fixed with a title certificate, preparation of the deed of transfer and deed of gifts are not necessary as above. Instead, an instrument will be used to fulfill the requirement. When the duly prepared instrument is handed over for the registration, a new title certificate will be issued under the name of the new owner.
When the properties are dispossessed through a sale or a gifting procedure, the relevant stamp duty should be paid to the commissioner of the provincial revenue department. The opinion of the provincial revenue commissioner can be taken regarding the applicable stamp rates, and the instrument will be certified by the commissioner of the provincial revenue as a duly stamped instrument, after paying the prescribed stamp duty. This helps to avoid any issues related to the payment of stamp duty.
Even though the owned properties are not dispossessed as mentioned above, last will and testament can be prepared mentioning who should receive the immovable properties such as lands and houses and movable properties such as money and vehicles etc.
In terms of the provisions made in the Prevention of Frauds Ordinance No. 7 of 1840, last will and testament can be prepared in two ways. That is by signing in front of two witnesses before a notary public or if no notary public by signing before five witnesses. In order to prepare a valid last will, one should be completed 18 years of age.
The properties can be reserved to anyone, who does not have the right to inherit the property, by way of a last will and dispossession can be done in advance for the property in the future. In such a situation only the properties in Sri Lanka can be reserved, but the document can be prepared in any foreign country in respect of the properties in Sri Lanka following the prevailing laws of the relevant country. Also, the last will can be prepared not only individually but also by the husband and wife as a joint document.
A last will and testament can be destroyed and revoked at the request of the person who prepared the same. Number of last wills can be prepared by a person, but only the last written will is considered as valid. The person who is assigned to act on the property by the last will and testament is called the Executor.
It is to be noted that, just because the will is written, it does not result in a loss of ownership of the property, and the owner of the property has the right to revoke the will even after it is written and sell, transfer, or otherwise carryout any other act in respect of the said property. Which means, to complete the transfer to be made by a last will, the death of the property owner must take place and the last will must be proved before the appropriate court.
If someone dies with a last will written, the executor should tender the last will within a period of three months to the District Court where he resides or the place where the owner resided upon his death or the area where a part of property of the owner is located.
Upon completion of the proceedings in the court case, the executor’s conveyance has to be prepared for the transfer of the immovable property in accordance with the last will and the new recipient then has the legal right to the relevant property.
It is also should be discussed what will happen when a person dies without having a last will for his property and assets
In such a situation, the property is devolved according to the inheritance and the inheritance differs depending on the personal laws related to the deceased.
As stated in the Chapter XXXVIII of the Civil Procedure Code, when a person dies without a last will or no last will can be found, in order to devolve the property of the deceased, an application should be made to the District Court within three months. Such an application can be made by relevant parties to the District Court of the area where he resides or to the in the area where the deceased resided at the time of the death or to the area where the deceased’s property is located.
Having taken all necessary steps related to the case regarding the application, the proceedings are concluded and immovable property owned by the deceased will be devolved to the successors by way of the administrator’s conveyance which will be prepared at the end of Court proceedings.
Whether a last will is available or not, in the event that a person is unable to make an application to the court within the prescribed time period, permission may be granted to proceed with the case, only with reasonable grounds for the delay.
However, after the death of a person, the owners of the property may face various difficulties due to not taking proper action regarding the property.
Especially, in the case where no testamentary action has taken place for the immovable property such as houses, lands, etc., it is difficult for the successors to prove their clear rights to the property and correct title or ownership to the property. At such instances, when a person who owns such property and sells the property to a third party and seeks to obtain a loan facilities by way of a mortgage, that ownership/title can become questionable.
Therefore, in the event of the death of the owner of the property, the inheritors, or the person with any rights to the property should inspect all the property and assets diligently and take necessary legal action.
Also, in the event of death without proper action regarding the disposition and ownership of the property, your negligence can lead to unnecessary disputes between various parties regarding the property and will waste their valuable time and money. Therefore, just as the properties are managed while you are alive, it is best to decide in advance what will happen to the property after your death upon your preference.
Author – Buddika Serasinghe (Attorney-at-Law)
Translated by Prabuddhika Ramawickrama
Professional in charge – Law of Property
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