Appointing a nominee for your residential property: A crucial step for Diwali homebuyers

Property owners can appoint multiple nominees, allocating specific percentage shares to each.

As the festive season of Diwali lights up homes across India, many seize the opportunity to purchase their dream residence, lured by attractive bank schemes and lower home loan rates. Amid the excitement of acquiring a new property, one critical step often overlooked is appointing a nominee. This administrative safeguard ensures smooth management of your property in the event of your demise, preventing delays and disputes.

Why nominate? The significance of a nominee

Appointing a nominee for your residential property is a practical step that ensures clarity for housing societies after a member’s death.

A nominee acts as a temporary custodian, not an owner. Their role is to manage society-related responsibilities until legal heirs, determined by a will or succession laws, claim ownership. This distinction is vital, as nomination does not replace a will but complements it, ensuring seamless interim management.

According to Rahul Hingmire, Managing Partner at Vis Legis Law Practice, under Section 30 of the Maharashtra Co-operative Societies Act, 1960, a nomination identifies the person a society deals with for property-related matters like maintenance and document handling after a member’s death. This administrative convenience prevents the property from being left in limbo while legal formalities are resolved, safeguarding its upkeep and access.

The nomination process and documentation

The process of appointing a nominee is straightforward but requires careful attention to detail. Alay Razvi, Managing Partner at Accord Juris, explains that a member must complete the society’s nomination form (often Appendix 14 under model bye-laws) and specify the nominee’s name, relationship, and percentage share if they appoint multiple nominees. The member submits the form to the society's Secretary, who records it in the Nomination Register. Following that, the managing committee approves the nomination, acknowledges it, and updates records. The first nomination is typically free, with a nominal fee for subsequent changes.

Required documents include the nomination form, KYC proofs for the member and nominee(s), and details of the flat or share certificate. Retaining a copy of the society’s acknowledgment is advisable for future reference. Aaron Jonathan Solomon, Managing Partner at Solomon & Co., notes that under Rule 25 of the Maharashtra Cooperative Societies Rules, 1961, the form must be submitted in triplicate, signed by the member, and attested by a witness.

"If there is no nominee, the society or authority usually insists on legal documents such as a probate, succession certificate or legal heir certificate before allowing anyone to act," said Vishal Gehrana, Partner Designate at Karanjawala & Co. and Advocate-on-Record, Supreme Court of India. This process can take time and delay even routine work like payment of maintenance, rent collection or handling of repairs. "Having a nominee avoids this interim vacuum and provides a recognised person to coordinate with authorities, though the final ownership remains with the heirs," Gehrana added.

Multiple Nominees: Pros and Cons

Property owners can appoint multiple nominees, allocating specific percentage shares to each. This flexibility allows for tailored planning, such as dividing shares among family members. “You can change nominations any time by filing a fresh form; this helps keep records aligned with life events such as marriage, divorce, or inheritance planning changes,” said Razvi.

The benefits include reduced disputes at the society level, as the nomination clearly outlines the owner’s intentions, and a backup if one nominee is unavailable.

However, challenges arise if nominees disagree or if share allocations are unclear, potentially leading to friction or delays until legal ownership is settled.

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Nominee vs. Legal Heir: Understanding the difference

A common misconception is that a nominee becomes the property’s owner. Dr. Richa Mehtha, Partner at Gandhi Law Associates, clarifies that a nominee is merely a trustee, holding the property for the legal heirs, who inherit ownership through a will or succession laws.

The Supreme Court has emphasized that societies transfer membership to nominees for administrative purposes, but ultimate ownership rests with legal heirs. This distinction means nominees cannot sell or mortgage the property unless they are also heirs.

"It is advisable for the owner to inform both the nominee and the main heirs about their respective roles and provide them with a simple note containing essential information, property details, title documents, share certificate, loan and insurance particulars, and society contacts. The nominee should understand clearly that their role is to protect the property and cooperate with the heirs during transfer," said Gehrana.

Risks of not appointing a nominee

Failing to appoint a nominee can lead to significant complications. Without a nominee, societies require extensive documentation, such as a death certificate, legal heir certificate, or succession certificate, before transferring membership. This process can take months, increasing costs and the risk of disputes among heirs. Rishabh Gandhi, Founder of Rishabh Gandhi and Advocates, highlights that societies may issue public notices to invite objections, further delaying transfers. Unpaid maintenance bills and restricted access to the property can also arise, leaving it vulnerable to neglect or third-party claims.

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Best practices for property owners

To ensure a smooth transition, property owners should appoint a nominee and create a registered will. The will legally defines inheritance, while the nomination facilitates society-level management. Owners should inform nominees of their responsibilities, such as paying maintenance or safeguarding documents. As Solomon advises, ensuring all details in the nomination form are accurate and retaining the society’s acknowledgment enhances clarity.

A will and nomination for peace of mind

As Diwali brings new beginnings with home purchases, appointing a nominee is a vital step to protect your investment. It ensures your property remains managed and accessible while legal heirs establish their rights. However, nomination alone is not enough; a will is essential to secure your legacy. By combining a clear nomination with a registered will, you can safeguard your property and spare your loved ones from legal hassles.