When a parent transfers a house to his child, it does not automatically give the former a right to stay on, on an unlimited basis.
THE problem of children neglecting their elderly parents is nothing new. It was recently highlighted in the newspapers that an elderly patient who was discharged from hospital after undergoing heart treatment, found himself abandoned at a bus-stand.
The man was relieved upon seeing his son the following day, and was looking forward to going home. However, his joy was short-lived when it turned out that the son was only there to hand over his bicycle.
Then there was another case where a daughter abandoned her father at a dialysis centre.
Such incidents are of concern to any parent who is dependant on his child for accommodation. In some cases, the parent may not have any option but to depend on his child to provide for him. However, in other cases, a parent may put himself in a vulnerable position by transferring his only property to his son or daughter while he is still alive.
He may have done so because the property was meant to be transferred to his child eventually. In doing so, the parent may believe that he will be allowed to stay in the house as long as required and perhaps even be financially assisted and cared for. But such a property transfer can have serious consequences.
Effect of transfer
The person who transfers the property is known as transferor, while the person receiving it is referred to as the transferee. The transferee is now the new owner of the property and is vested with legal rights.
When there is a title, the transfer of ownership is effected by registering a document in writing using a prescribed form under the National Land Code. The transferee goes down in the records of the Land Registry as the new owner. Where there is no separate document of title, such transfer process is affected through a Deed of Assignment.
Whatever the mechanism of transfer adopted, the child in such a case would become the legal owner of the property. The father-child relationship with regard to the property in the absence of express provision is of little relevance.
If, thereafter, the child does not allow the father to stay in the house, the father would in the absence of a specific agreement, have no right whatsoever. But how could the father have reserved such a right?
It is open to a son and his father to have agreed that in consideration of the father transferring the house to the son, the father would for the duration of his life, be entitled to stay in the house.
In reality such matters are seldom discussed expressly, what more in writing. The more likely scenario is that the father would, without saying so, expect the child to know his obligations. However, in a legal context, this can cause difficulties.
Testamentary gift
To avoid such a situation, one option would be not to transfer the house to the son immediately but plan it as a testamentary gift. This means the father continues to retain ownership of the house but will give it to his son upon his death by providing for this in his will. This, however, has its own implications. A will can always be changed at any time before the death of the person who makes it. It allows not only changes and modifications to be made as to the directions in the will but also its entire contents revocated.
For a son who expects to inherit the house, a will does not ensure the same security and is not to his absolute advantage. It is not an ideal situation where the son has his eyes on the house. On the other hand, by stipulating the gift in the will, the father continues to have all rights to the property and yet be able to give away the house at the appropriate time.
Yet there are parents who would rather transfer the property outright. The reason is that there could be a problem which a person would like to avoid, if relying on a will. A parent may state his wishes in the will. But the will could be challenged. If and when this happens, there could be protected litigation.
In many cases, the parent may not want a situation which has the potential to create uncertainty. He may want to see the house go to the son without any challenge being made or pursued later. The transfer would enable him to ensure that his plans are carried through. But there are risks. Is there any other option?
A trust
Another way out would be to transfer the property to the son and simultaneously have the son declare that he holds the property in trust for the father.
By this arrangement, the house could be transferred to the son. With the son holding the property in trust for the father, the latter’s rights would be safeguarded.
By this, the son becomes the registered and legal owner. At the same time the father is the beneficiary under the trust during his lifetime.
Such an arrangement would be more difficult to challenge by a third party on the death of the father.
Conclusion
It is hoped that cases of children booting out their parents after inheriting the property, are a rarity. Filial piety continues to be observed in our society.
Nevertheless, with changing attitudes, one cannot be certain that attitudes will not change in time to come.
In some cases, such occurrences may be caused by an individual’s greed or lack of gratitude.
On other occasions, parents get chased out because the child may be faced with a dilemma: he has to decide between spousal objection and fulfilling parental obligations. Once he has made the decision, he will have to live with the choice of a damaged relationship with the spouse or with the life-long thought of having betrayed the parent.
Read BhagSingh’s original story here.