Scrutiny
of title deeds of the property is the first and foremost exercise the
purchaser's advocate has to undertake before entering into an agreement with
the seller. A clean and marketable title, free from all doubts and encumbrances
vested with physical possession, is very important. The ownership of the
titleholder can be traced from the title deeds and revenue records.
It is the duty and responsibility of the purchaser'sadvocate to safeguard the interest of his client. The advocate shall thoroughly
search and scrutinize the marketable title of the property and genuineness of
the documents. He shall make it very clear to his client the extent of risk
involved in the transaction and how to make payments to the seller.
Origin of the Property
The
origin of a property is very important to trace the title of the property. It
is otherwise called 'Root of the Title'. It is the safest way to determine the
origin of the property and trace it's marketable title. Documents covering a
minimum period of 42 years must be scrutinized. In the case of Adverse
Possession against individuals or Conflicting Claims (other than mortgage)
against individuals, documents covering a minimum period of 12 years must be
checked. As regards the period of limitation against the Government, documents
covering a minimum period of 30 years must be checked. If a person is enjoying
the property for more than 30 years, he will get title by adverse interest
against the Government as per the Limitation Act (article 112 of the schedule
as per section 21J) and 3 of the Limitation Act. Also, as per the Section 90 of
the Indian Evidence Act 1872, a document executed 30 years before is presumed to
be valid.
Subsequent Transfers
After
ascertaining the origin of the property, it should be followed up by methodical
examination of events and further transaction, if any, in an uninterrupted and
sequential manner, involving the previous owners and the present owner of the
property. Here, the purchaser's advocate has to very carefully look into all
aspects from various legal angles as to how the property was transferred from
the previous owners to the present owner. Such a transfer may be by possession,
inheritance, settlement, will, sale, mortgage, release, gift etc., involving
such intermediate parties. For
supporting such a transaction, the advocate has to carefully examine the
title deeds and other supporting documents like revenue documents and other
records. Also, verification of the identities of the names of the parties and
their family connection, wherever they are relevant, and proceedings, if any,
involving the parties before any court of law, other legal forums and
authorities including revenue authorities, must be done.
Statutory Clearance
The
nature of various statutory clearances obtained from the relevant authorities
like revenue, land reforms, income tax, etc., required for completing the
transaction must be informed to the parties. In case of purchase of
agricultural land, various clearances must be obtained before executing the
deed of conveyance.
Present Status
The
'present status' of the property is the most important point to be examined.
The advocate has to find out who is the present owner, how he got the property,
what title deeds and supporting documents he is holding, is it ancestral
property or self acquired property and who are his legal heirs. If the legal
heirs are majors in age, the vendor must ensure their presence while executing
the deed of conveyance. If they are minors in age, the vendor has to get the
permission from the court before executing the deed of conveyance. In some
cases the vendor may conceal the fact of legal heirs. To find out the truth,
the advocate must ask the vendor to produce either the succession certificate
or the family genealogical tree issued by the revenue authority. If necessary
he must see the family ration card for further clarification. The advocate must
find out in whose name the khata stands, whether the khatedar possesses
up-to-date tax paid receipt in his name and up-to-date encumbrance certificate,
to establish his right, title and interest in the property. The advocate has to
check Encumbrance Certificate for a relevant period, generally above 12 years
up to 42 years from which it would be known what kind of charge has been
created on the property and whether such an encumbrance is existing or not.
Municipal and other revenue authorities too maintain records as to who is in
possession of the property, what is the amount of tax payable on the property
and up to what period tax has been paid. All this can be learnt from these
records. 'Present status' is one of the important factors to establish the
present ownership of the property.
Genuineness of documents
After
thoroughly scrutinizing the documents, the purchaser or his advocate has to
check up all documents for legality with the concerned departments just to
ensure that the documents are genuine, that they originated from the
departments and that they are not fakes. In addition, the advocate has to find
out from the department whether there is any attestation, notification or
proceedings against the present owner. In case of buildings it must be ensured
that it has not been served with a demolition notice.
Identity of the property
The
identity of the property must be checked on the spot. Measurements mentioned in
the documents must tally with actual physical measurement of the land available
on the property. It must also be ensured that there is no encroachment on the
property. In case of encroachment, the measurement of the available land must
be recorded and this must be mentioned in the deed of conveyance. The
boundaries mentioned in the schedule surrounding the property must be checked
physically. Also, the purchaser may make enquiries tactfully with the adjacent
property owners about the ownership of the property he is proposing to buy.
Paper Notification
Though the paper notification is optional, it is always advisable to
notify in a leading local newspaper about the buyer's intention to purchase the
property. This is done to safeguard the interest of the purchaser. Even after
examining the various documents, the Advocate may not be able to find out
whether the property is truly free from any claim or not. A paper notification
will beget response from a genuine claimant. Therefore, paper notification is
the best way to avoid legal problems for the purchaser at a later date.
Physical Possession
In case of vacant site, the purchaser
may, with the permission of the vendor fence the property with barbed wire or
he may construct a compound and put a signboard, if necessary, to intimate the
ownership of the property. Verification of title is very important. It is not
merely tracing the title on the record but also examination of the genuineness
of the records, identification of the property, notification in a newspaper and
physical possession of the title of the property. Even after entering into an
'Agreement to Sell', the purchaser still makes queries about the Title on the
Scheduled Price to the vendor. A doubtful title cannot be forced upon the
purchaser. Purchaser is not bound to complete the sale if there are defects in
the title, material or latent, which are not discernible in ordinary course. A
mere suspicion of fraud that cannot be made out will not make the title
doubtful and the purchaser cannot reject the title.
Purchase of BDA Property
While buying a BDA site from the allottee, the purchaser shall collect
the following original documents from the
seller at the time of execution of
the Sale Deed.
1.
Allotment Letter.
2.
Sale consideration paid receipts.
3.
Possession certificates.
4.Agreement to sell executed by the BDA and the
original allottee.
5.
Katha Certificate.
6.
All up-to-date tax paid receipts.
7.
Encumbrance from the date of allotment.
8.
Absolute Sale Deed executed by the BDA.
9,Other papers mentioned
in the above said Documents.
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