Archive · 24 Jun 2025
Paying Bank Branch Rent to HUFs: Legal Advice and Requirements
Imagine a bank renting a building from three people.
Those people have a deal with the bank.
Later, the people set up new groups called HUFs.
They want the bank to start paying the rent to these HUFs instead, but the building is still owned by the individuals.
An expert says this isn't right.
The bank can't do this because the HUFs don't own the building.
To make it work, the people would have to officially give their part of the building to the HUFs first.
A bank branch manager inquired about the legality of paying rent to HUFs when the property is registered in individuals' names.
The property is jointly owned by A, B, and C, who made a rental agreement with the bank in 2015.
The owners requested the bank to pay rent to their respective HUF accounts in 2025, while the property's ownership remained unchanged.
An expert says that the bank cannot legally pay rent to HUFs, as they do not own the property.
For HUFs to receive rent, the owners must transfer their shares to their HUFs through a sale or gift deed.
- Who
- A bank branch manager and property owners A, B, and C.
- What
- Legality of paying rent to HUFs for a property owned by individuals.
- When
- Rent agreement made in 2015, with the request to pay HUFs made in 2025.
- Where
- SBI branch.
- Why
- To determine if it's legally permissible to pay rent to the HUFs.
Bank's Perspective
Legal Advice
Legal Compliance
Bank's Perspective
Whether it is legal to pay rent to HUFs
Legal Advice
Legally the bank cannot pay rent to the HUFs if the property is not registered under their name.
- Property Owners
- A, B, and C
- Rental Agreement Date
- 2015
- Owners' Request to Pay HUFs
- 2025
- Expert
- Balwant Jain, tax and investment expert
- Legal Requirement for HUF Rent
- Transfer property shares to HUFs