My friend Hemant submitted papers to transfer his late father’s mutual fund units on a Monday. The units were credited on Wednesday. It took less than 48 hours. His brother, an NRI and joint nominee, applied two months later. He got his units just as quickly. Hemant’s father also owned a flat in a Mumbai housing society. The society transferred it to the brothers as nominees. But they were treated as provisional members. They could not deal with the flat without a court order. The process took close to a year. It cost more than Rs 2 lakh.
The contrast between Hemant’s two experiences is not accidental. The law is the same in both cases. A nominee holds any asset only on behalf of the legal heirs. But market realities change the outcome. In financial assets, a buyer cannot tell if the seller is a nominee or an owner. The nominee can sell or redeem at any time. This converts the asset into cash. If other heirs have a claim, they must chase that cash in court. This rarely happens. In property, a nominee cannot give clear title. The buyer must verify ownership. This is why a court order becomes necessary.
The law offers multiple ways to convert provisional membership into ownership. Some depend on a will. Others depend on personal law when there is no will. Both routes involve going to court. This is slow and expensive. In many states, court fees are linked to the value of the property. There is a non-court option through a legal heirship certificate issued by revenue authorities. It is cheap on paper. But it involves repeated visits, delays, and unofficial payments. Buyers and lenders often distrust it reducing the sale value of the property. A family arrangement is another route. But it is not clearly defined. Housing societies are reluctant to rely on it.
The Securities and Exchange Board of India (SEBI) and the Reserve Bank of India (RBI) have already shown that easy transmission is possible when the owner has recorded nominees. Transmission refers to the transfer of assets to nominees or legal heirs after the death of the holder. Where a valid nomination exists, only a few specific documents can be asked for. These include the death certificate, a simple transmission form, and the nominee’s KYC proof. Extra requirements are not allowed. If there are multiple nominees, the applying nominee can receive their share immediately. The balance is held in escrow until the others apply. RBI has built further on this framework. It imposes penalties for delay. It also recognises successive nominations, so a backup nominee can step in if the original nominee predeceases the investor.
These reforms cover only part of the problem. State governments, which regulate real estate, have not moved in this direction. The solution is simple. If a person registers a nominee with the housing society or the sub-registrar, that nomination should have the same effect as a will for that property. The nominee should be able to deal with the property as a full owner. This is already the case for financial assets. If other legal heirs have a dispute, they can pursue it separately against the nominee. But a buyer who purchases from the nominee should be fully protected.
Truth be told, the system has pushed Hemant towards a dramatic decision. He has decided that when he dies, he will leave his heirs only the home he lives in. Every other asset will be in a form where his children can claim what is theirs without taking time off work or going to court. He does not want them to go through what he went through. If financial regulators can make transmission of securities and bank deposits swift and certain, there is no reason state governments cannot do the same for real estate. Until they do, more people will reach the same conclusion as Hemant — and ask: why leave behind an asset that becomes a burden rather than a bequest?
The writer headsFee-Only Investment Advisers LLP, aSebi-registered investment advisor; X: @harshroongta
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper
(A slightly different version of this column first appeared in the Business Standard on 13 April, 2026)