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Relinquishment deeds are legal documents by which a person can give up on his or her legal rights over a property to someone else with their consent. On the other hand, a deed of release, also known as a deed of reconveyance is a legal document used to renounce one’s claims against a specified property. Moreover, it can be said to completely release the parties from the previous obligations. One cannot find a major difference between the two. The context of using the terms may vary at times but the actual meaning of the two terms (relinquishment deed and release deed) are fundamentally the same.
For instance, when a person dies without making a will and the property goes to his legal heirs (his two sons). Now one of the sons out of his own wish transfers his rights over the property to his brother due to personal reasons. Here, the transfer of rights is called a relinquishment. In the case of relinquishment, however, the person to whom the deed is being transferred must be interested in taking the property and also, that person must give complete consent for taking up the entire share of the property.
Otherwise, the deed of relinquishment will become void and cannot be legally enforceable.
Also, it must be noticed that the relinquishment deed can only be executed towards a member of the family in most cases or a co-owner of the property and not anyone else.
In a release deed, however, the deed can be enforced towards anyone who has sheer interest in the property previously, regardless of whether they were coparceners or not. When a person claims a loan from a bank, the bank takes full control of a property pre-owned by the homebuyer as collateral. Once the loan amount is paid in full, the mortgage is transferred back to the owner along with a release deed. Here, the bank is giving away its temporary possession of the mortgage back to its owner through the mortgage release deed. So, in a mortgage release deed, it is not necessary that the parties involved must be relatives or coparceners.
A relinquishment deed can only be generated for inherited properties and not for the release of services. But an employment release deed is formed to release both the employer and the employee from previous obligations. Or in some cases to establish the conditions of the severance package of the employee. The employment release deed can also be used to restrain an employee from disclosing certain highly confidential information about the company and/or refraining him from starting his own company with the known information. Registering legal instruments is a very essential part of processing a deed.
It is used to transfer a claim from one person to another. It must be meticulously executed and registered as per Section 17 of the Registration Act,1908. The deed must be drafted in a Rs 100 stamp paper. It should be submitted before the sub-registrar of assurances within whose jurisdiction the property lies along with the registration fees. It also requires the signature of two witnesses to get the deed registered. Even though the release deed must also be registered in the same manner, the deed doesn’t need to be notarized.
Generally, any registered deed cannot be revoked simply because the person transferring his/her claim over property has changed their mind. In case of a relinquishment deed, it can be challenged based on the same grounds used for revoking a general contract. It can be Fraud, Undue Influence, Coercion and Misrepresentation. It is also important that both the parties give their consent to the cancellation.
Here, both the parties are the person who relinquishes and the person in whose favour the deed is relinquished. Or otherwise, the deed can only be cancelled by approaching the court.
However, on the other hand, a release deed, in general, cannot be revoked.
Both are similar to a binary contract and they require the same essentials to become a valid deed. But a relinquishment deed is formed between two parties with or without consideration. Whereas a release deed specifically needs a consideration for being a valid deed.
In a nutshell, a relinquishment deed can be called a form of release deed. It can be used only to renounce the claims over an inherited property to a co-owner(s) of the property of the intestate.
A deed of release is a legal document that removes a previous claim on an asset. It provides documentation of release from a binding agreement. A deed of release might be included when a lender transfers the title of real estate to the homeowner upon satisfaction of the mortgage. A deed of release literally releases the parties from previous obligations.
Most individuals purchase their homes with the help of a mortgage provided by a financial institution. The bank providing the funds for the mortgage doesn’t just lend the money in good faith—it takes a legal claim against the house as collateral until the loan is paid off.
A mortgage deed of release is then created when the borrower meets all mortgage payment terms or makes a full prepayment to satisfy the loan. The lender holds the title to the property until that time and is formally a lienholder of record on the property until full and final payment is made. The title provides secured collateral for the loan payments for the life of the loan, reducing the default risk for the lender.
The deed of release is typically created by the lending institution’s legal counsel when the loan has been satisfied. It reports that the loan has been paid in full under the terms required. It also states that the lien has been removed and full title has been transferred to the homeowner.
The homeowner owns the asset free and clear after the title and deed of release are provided to her. She’s no longer subject to any terms or obligations of the lender. The lending account is closed.
Employment agreements are another scenario where a deed of release might be used. The document can free both the employer and employee of any obligations they had under their employment agreement. In some cases, a deed of release might give an employee a designated payment. This can occur in the case of a severance package.
The deed of release can include the terms of the severance, including payment and the length of time payments will last following the release. It might also identify confidential information that cannot be shared by the employee after termination, or restraint clauses that prevent a departing employee from forming a similar business or soliciting customers or clients.