Property related disputes in courts are more than 50% of all cases. Of this, 10% relate to family matters as per one of the studies. Most of the problems could be due to the absence of a registered will. A family settlement agreement is an effective way to distribute property among the beneficiaries.

Family Settlement Agreement (FSA) is preferred by families who want to settle property-related disputes out of court.          

It is necessary to acknowledge that the signing of all the members confirming the agreement was with their consent and not by force and coercion from any family member. It covers immovable assets, shares, claims, and family feuds.

Format of FSA

FSA is similar to any partition agreement. It should mention the names of all the family members, details of ownership, and the specific terms of this distribution of the property. If possible, the agreement should incorporate the property details, along with the house number, area, and a site map.

The members need to declare that they agree to the terms and conditions of the agreement and this is a final agreed document that would end the ongoing dispute within the family concerning the property.

FSA has legal validity and all the parties have to abide by the terms and conditions mentioned in it. FSA will be referred by the authorities facilitating the transfer of property and distribution as per the terms and conditions laid out in the agreement. The parties have to execute a NOC related to the mutation of a property.

Payment of past or future dues should be mentioned to be borne by the beneficiary so that no claims can be raised later. FSA should be sealed with thumb impressions.

For FSA to be considered legal, registration is needed as it is accepted in a court of law. In case of amendments to FSA, another document should be created without registration as it is not under the purview of the Registration Act 1908, Section 17 (2).

If FSA is not registered, it can still act as estoppel by preventing a person from asserting what is contrary to what he/she had implied previously orally or in writing. Registration is needed if it causes a change in the legal rights of the family members.

A family settlement agreement is useful for an amicable resolution among families and avoids time spent in a court of law. Also, transfer of property under this agreement is not to be considered as a gift or a transfer of right so payment of capital gains tax is not needed.

This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being.