Who Will Inherit Your Flat – Your Nominee or Your Legal Heir?
- By Vrinda Lahoti
- Articles
Introduction
Indian urban housing, especially in metropolitan areas, is dominated by co-operative housing societies and apartment ownership structures. These systems require flat owners to nominate an individual who will be recognised by the society upon the owner’s death. However, the legal effect of such nomination is frequently misunderstood. When it comes to property ownership and inheritance in India, many homeowners believe that simply adding a nominee to their property documents ensures smooth transfer of ownership after their lifetime. However, this is a misconception that often leads to legal disputes among family members.
The central legal question, therefore, is:
Does a nominee become the absolute owner of the flat, or does ownership devolve upon the legal heirs under succession law?
The reality is, a nominee is not the owner of the property. A nominee is only a caretaker or trustee. The legal heir, on the other hand, is the person who is lawfully entitled to inherit the property as per succession laws. Understanding the difference between a legal heir vs nominee is essential for every property owner to ensure their assets pass on smoothly to the right people without conflicts or litigation.
Understanding the Concept of a Nominee
A nominee is a person appointed to hold the property on behalf of the actual owners after the original owner’s death. In simple terms, a nominee is a trustee, not the owner.
Nomination is usually done under the:
- Co-operative Societies Act & Rules
- Apartment Ownership Acts
- Banking Regulations
- Insurance Regulations
The purpose of nomination is only to ensure immediate transfer and management of property or assets after death, so that the institution (bank, society, insurance company) knows whom to hand over possession or documents to. A nominee does not become the owner of the flat simply because he/she is nominated.
Key Characteristics of a Nominee
- A nominee is a caretaker, representative or trustee.
- The nominee holds the property till the legal heirs claim it.
- Nomination does not override succession laws.
- Nominee’s rights are temporary and limited to safeguarding the property.
Many people nominate their spouses, children, or even siblings thinking they are securing their property for them. Legally, this belief is incorrect.
Understanding the basics, Nominee vs. Legal heir
Nominee
A nominee is a temporary custodian of an individual’s assets or accounts, and has the right to access or manage these if the owner passes away. A nominee’s authority is limited only to taking care of the assets till these can be smoothly passed on to the legal successors. So, they cannot buy or sell, or take any decisions regarding the transaction or transfer of assets. Nominee means “nominee” appointed by a member of the fund to receive the benefits arising from such membership in the event of his death[1]. So a nominee is clearly a beneficiary, who is entitled to receive benefits on the occasion of death of the testator.The owner can appoint anyone as a nominee, including family members, friends or acquaintances, but many financial institutions prefer close family members or impose certain conditions. Of course, the nominee can also be the legal heir, which makes the transfer of assets smooth and hassle-free.
[1] Rajasthan Advocates Welfare Fund Act (15 of 1987), section 2(g)
Legal heir or beneficiary
A legal heir or beneficiary is the legal owner of the assets after the original owner passes away. (S)he has to provide proof of ownership through testamentary documents, such as a will. If the owner passes away intestate, that is, without a will, the heir is identified as per succession or personal laws. While the beneficiary may not have the first or immediate access to the owner’s assets, (s)he will be the ultimate claimant and can contest the ownership in a court of law.
Legal heirs are individuals entitled to inherit a deceased person’s property under the applicable personal succession laws, such as:
- Hindu Succession Act, 1956 – Hindus, Sikhs, Jains, Buddhists
- Indian Succession Act – Christians, Parsis
- Muslim Personal Law (Shariat) Application Act – Muslims
Under Hindu Law
Legal heirs fall under two categories:
- Class I heirs[1] – spouse, children, mother
- Class II heirs[2] – father, siblings, grandchildren, etc.
Legal heirs inherit the property by operation of law. This right is superior to whatever nomination has been made.
[1] Hindu Succession Act, 1956, Section 10.
[2] Hindu Succession Act, 1956, Section 11.
What Happens to Your Flat After Your Death?
When a flat owner dies:
- The housing society transfers the flat to the nominee for smooth functioning.
- The nominee gets possession, maintenance responsibility, and may even get voting rights in the society.
- But the nominee does not gain ownership.
- Legal heirs can claim their rightful share at any time.
- If there is a will, property goes according to the will.
- If there is no will, property goes according to succession law.
Important Supreme Court Judgments
Indian courts have consistently held that a nominee is only a trustee, not an owner.
(a) Indrani Wahi v. Registrar of Co-operative Societies (2016)[1]
The Supreme Court held that the nominee is only a trustee, not the owner. Housing societies must transfer the flat to the nominee but legal heirs can later claim their share.
(b) Sarbat D. Bhalla v. State of Maharashtra (2014, Bombay HC)[2]
The Court ruled that nomination does not confer beneficial ownership. Succession laws prevail over nomination.
(c) Shakti Yezdani v. Jayanand Salgaonkar (2020, SC)[3]
The Court reaffirmed that nomination under the Companies Act or Societies Act does not override inheritance rights.
Therefore, it can be elucidated from the above judgments that a nominee is not equivalent to the owner and Legal heirs always have the final full fledged right over the property.
What happens if you nominate someone other than the legal heir?
Many people nominate someone close to them like a friend, distant relative, or even a sibling instead of their legal heirs.
What happens legally?
- The nominee may get immediate possession of the flat after death.
- But legal heirs (e.g., spouse or children) can file a claim.
- Courts will grant ownership to legal heirs, not the nominee.
- The nominee must hand over the property to the rightful heirs.
Hence, nominating someone else does not legally disinherit your legal heirs.
Why is Nomination still important?
Even though the nominee does not become the owner, nomination is still useful.
Benefits of Nomination:
- Ensures smooth transfer and possession.
- Avoids disputes within the society.
- Helps in managing insurance or bank accounts quickly.
- Acts as a bridge until legal heirs complete inheritance formalities.
- Prevents the asset from remaining “unclaimed”.
Thus, nomination is still important but only as a temporary mechanism, not as a substitute for succession planning.
How to Ensure Your Property Goes to the Right Person?
To avoid disputes in the future, one must follow these legal steps:
(1) Make a Will as it is most effective step[1];
- Details of the flat
- Name of the beneficiary
- Distribution ratio
- Executor of the will
(2) Update Nomination Details;
Ensure the society records the correct nominee.
Keep records updated if circumstances change (marriage, divorce, death).
(3) Keep Property Papers in Order;
Maintain:
- Sale deed
- Share certificate (for co-operative societies)
- Registration documents
- Electricity/water bills/Revenue Card/Ration card etc.
(4) Information to Family
Communicating your intentions clearly prevents future misunderstandings.
What happens if there is no Nominee and no Will ?
If the owner dies intestate and without appointing a nominee:
- The legal heirs must provide:
- Death certificate
- Succession certificate / legal heir certificate
- Indemnity bonds
- Society transfers the flat to the legal heirs collectively.
This process of transfer of property intestate is longer and more cumbersome.
How Different Succession Laws Treat Nomination
Hindu Succession Law
Muslim Law
Nomination has no effect on inheritance. Shariat rules apply strictly.
Christian & Parsi Law (Indian Succession Act)
Nominee is equal to trustee. Legal heirs inherit as per the Act.
So, No personal law considers nominees as owners.
Conclusion
In India, the distinction between a nominee and a legal heir is crucial.Nominee is a person who temporarily holds your flat after your death and a Legal heir is the one who legally inherits the flat. Nomination does not equate to inheritance.
The Court judgments clearly say that nomination does not make someone the owner.
If one wants the nominee to actually inherit the concerned property then, will come into the picture.
A nominee may be the person you trust to take care of your flat immediately after your death, but the law says that the flat ultimately belongs to the legal heirs unless a valid will states otherwise.
Nomination is only for administrative convenience, while inheritance is governed by succession law. Therefore, if one wants to ensure that his property is inherited by the person he chooses whether it is his spouse, child, relative, or friend then the most important step is to make a clear, legally valid will.
As per my understanding, being clear with this difference can prevent disputes, protect family relationships, and ensure that one’s wealth is transferred smoothly and according to personal wishes. I believe that holding property is an asset and then its transfer when through testament or intestate is a process that must be governed by law as law is supernatural, above all. And the law clearly states that a flat will be inherited by the legal heir or as per the will.