Trust Deed Registration
A trust deed is a legal document which evidences the transfer of the legal title of a real estate property/ immovable property from a borrower to a third party, i.e., trustee, for the benefit of the lender as security for the borrower’s debt. A trust deed is also known as Deed of Trust or Potomac mortgage.
A trust deed includes three parties, i.e., a borrower, lender, and a title company or a bank. Whereas in contrast, a mortgage involves only two parties, a borrower and a lender.
Why to Register the Trust Deed of your NGO?
The registration of a public trust in relation to an immovable or movable property is optional. There are several advantages of a registered trust deed. Such as:
- A registered trust deed is an official document carried and supported by law.
- A registered Trust Deed can effectuates the transmutation of the possession.
- A conveyance of trust property to the trustee under a registered deed cannot be challenged.
An exemption can be claimed under Section 11 of the Income Tax Act, in case of a charitable or religious trust in relation to an immovable property. Duly registration of instrument of trust is also required.