Gifting a mortgaged property is possible, but there are important legal and procedural considerations to keep in mind. When a property is under a mortgage, the original title documents, including the registered sale deed, are typically held by the lending bank. This means you may not have direct access to these documents until the mortgage is fully repaid.
However, a gift deed can still be executed under the following two scenarios:
1. GIFTING TO CLOSE FAMILY MEMBERS (BLOOD RELATIVES)
It is permissible to gift a mortgaged property to close family members or blood relatives. In such cases, the registration of the gift deed can be completed at the sub-registrar’s office using photocopies of the title documents, E-Khata, and valid identity proofs of both the donor and the donee. The presence of the original documents is not mandatory in this scenario.
2. GIFTING TO NON-FAMILY MEMBERS (NON-RELATIVES)
If the intended recipient is not a close family member, the process involves additional steps. A No Objection Certificate (NOC) must be obtained from the lending bank. This NOC authorizes the sub-registrar's office to proceed with the gift deed registration. In such cases, the bank may also require the loan to be transferred from the donor to the donee as a condition for issuing the NOC.
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