Personal Finance

Plan well your property inheritances

Meera Siva | Updated on April 21, 2019 Published on April 21, 2019

Senior citizens should not postpone decisions relating to property assets

Ramiah, a 74-year-old resident of Bengaluru, owns multiple properties. He was visiting his former colleague Kamala and her husband Mr Sahoo.

Plot plan

Kamala asked Ramiah: “Do you remember the unapproved plots both of us bought in the outskirts of Chennai nearly 20 years ago for a few thousand rupees?” Of course, he did. It was a fly in his ointment. “They have appreciated well and are worth a few lakhs at least; but, we cannot sell them without approval,” she said.

“The Tamil Nadu government has been running different schemes to regularise unapproved plots. There is information online and the process has been continually streamlined,” said Sahoo.

“We can ask our folks in Chennai to get the process started to make sure the documents are clean to avoid any hassles. We can sell it, rather than wait,” Kamala said. Ramiah added: “Yes, not paying attention when it was only worth a few thousands is one thing, but now my two grounds may be worth nearly ₹50 lakh; I must settle it.” Ramiah said. “In the hurry to sell, do not try to find a buyer who says they will take care of it. Selling unapproved plots is illegal and only buys you trouble,” warned Sahoo.

Ancestral property

“The one I really want to sell is my ancestral property — a few acres of land and a house — that I own along with my four siblings. My elder brother in the UK and sister in Mumbai do not want to sell, and we are stuck. There is no revenue, and we share the maintenance expenses,” Ramiah said.

Sahoo replied: “No one is getting younger, and postponing decisions makes it harder to implement them. Given that the prices may not appreciate and there is no revenue (only expenses), it is not worth the stress,” he said. “Those who want to hold on to the property can pay off those who want to sell.” Kamala urged that this must be done the right away.

Home hassles

“Your current house is also quite ancient, isn’t it?” Kamala asked Ramiah.

It was constructed 40 years ago, and Ramiah and his wife were comfortable with the familiar surroundings, but it was beginning to fall apart. Kamala knew that Ramiah’s son Sanjiv didn’t want to sell or redevelop it to flats.

“If you don’t mind my saying, why get stressed, spend money for repairs and live in a place not built for your current life situation? Just do the essential fixes to get a tenant, and you move to a rented place nearby,” Kamala said. Sahoo added: “Or you can list out all the changes needed to make it senior-proof, so you can continue here.” He suggested that based on the cost estimate for the two cases, an analysis can be done to find a solution that makes financial and logistical sense.

“My daughter Suniti in Delhi says she does not want any share of this old home. Instead, she wants the flat I bought in Pune in late 2010. It has appreciated well, and being in an IT-industry area, has so far fetched a good rent from reliable tenants,” Ramiah said.

“Bequeath the house to your son, after settling any payments for your daughter’s share. Hold on to the rental income and don’t give away the Pune flat to your daughter immediately. In your will, mention that the ownership will go to your wife and then to your daughter. That way, there is cashflow comfort. You must also tell your daughter that you will pay the costs, but she must manage the maintenance (which may increase as it gets older), to reduce your stress and work,” Sahoo suggested. “What does Sanjiv plan to do with the house? If he plans to build a villa, he can start now and maybe you can stay in the new and safer home,” Kamala said.

Sahoo suggested having an open discussion to know Sanjiv’s thoughts and explain the current ground realities. “It is possible that NRIs have a romantic view of the place they grew up in or have ideas that do not fit the Indian conditions. He may be busy and may be postponing thinking about it. Forcing him to have a clear plan of action will not only give you peace regarding the future of the home you built, but also for him to execute on it.”

The writer is an independent financial consultant

Published on April 21, 2019

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