1. We are not able to find out the legal hole that he may use while drafting the Gift Deed so that even after Registration, he can be in the same house
If your father is executing a conditional settlement deed by holding life interest in the property, then your brother has to wait to acquire the property till the last breath of your father. Hence please read the recitals of the settlement deed before it is being executed and registered because it canot be cancelled once it is registered other than by due process of law.
2. Can you please tell what we should so that he cannot stay in this house?
The settlement deed should be free of any such condition that will entitle your father to stay back in the property even after it is being executed.
3. My father had accepted to do DHANA PATHIRA PADHIVU only and NOT REGISTRATION like we do for Purchase of land. Will this be any problem to us in future.
Dhana pathiram pathivu and registration of the settlement deed is one and the same, dont get confused by understanding the meaning in two different languages.
Make sure that this setlement deed is not with any condition, especially with lifetime interest or any other condition favoring yor father.
4. Should we include any specific words in document to avoid future problem?
You make sure that other than the usual words conveying the meaning of setlement, no other extra words making a different sense is included in the deed.
5. Can my brother sell the property, if required, after Registration?
If the settlement deed is free of any condition then he may sell it as per his desire.
6. My father plans to do Registration but NOT handover the key. Is that possible.
He cannot do so, if he has registered the property to your brother then he has to handover possession of the property too.
7. Any other suggestion from your side is highly appreciable as we are badly in need of proper advice and suggestion.
You can ask any other specific question which shall be clarified.