Before dealing with the different
modes of acquiring immovable property, we shall understand what immovable
property is.
Transfer of Property Act 1882
describes immovable property as one, which does not include standing timber,
growing crops or grass (Section 3).
Though various landmark judgments
are there as to what constitutes standing timber, growing crops or grass it is
generally accepted that standing timber means the trees which are fit and ready
to cut and which do not require any nourishment from the soil.
Registration Act 1908, describes
immovable property as land, building, hereditary allowances, rights of way,
light Terries, fisheries, or any other benefit to arise out of land, and things
attached to the earth or permanently fastened to anything which is attached to
the earth but not standing timber, growing crops or grass.
Immovable Property is acquired by
various means:
Direct Purchase: The immovable property is
purchased from the owner by the sale process.
Gift: The owner of the immovable
property donates the property to a person voluntarily without valuable
consideration.
By
Exchange: The owners of two different properties
mutually transfer the ownership of one property for another.
Will: ‘Will’ executed by the owner of
the property in favor of the beneficiaries. This is also known as Testamentary
Succession.
Inheritance and Succession: By succeeding to the property of
the deceased by legal heirs. This is also called as Intestate Succession.
Ownership: The degree of ownership in
immovable property is of two types
(1)
Freehold,
where the owner has all the rights and privileges like right to possession,
transfer, and
(2)
less
than freehold where his rights and privileges are not full and absolute.
We are dealing with acquiring
freehold interest in immovable property.
Transfer of Property Act 1882,
deals with Sale, Gift and Exchange.
Sale: Section 54 defines what a sale is
and how it is made. This is the most popular mode of acquiring the immovable
property. According to Transfer of Property Act 1882, it is transfer of
ownership, exchange, for a price paid, or promises to be paid, or part paid or
part promised.
If the value of the property is
one hundred rupees or more such a sale can be done only by a registered
document.
The person who transfers the Property
is called the Seller or Vendor and the person who gets the property transferred
is called the Purchaser or Vendee.
The law (Transfer of Property
Act) imposes certain duties and rights on the seller and the purchaser. These
duties and rights are subject to the terms of contract; if the contract is
silent on any duties and rights, then law will prevail. If the contract
expressly avoids such duties and rights, then the terms of the contract will
prevail. As such it is necessary to avail the services of good legal expert.
Duties of Seller
(1)
A
seller should disclose to the purchaser any material defect in the property, or
in the seller's title, which the seller is aware and the buyer is not aware,
and the buyer could not discover the defect with ordinary care.
(2)
Seller
is bound to make available to the purchaser the documents of title to the
property, which are in seller's possession or power, for purchaser's scrutiny.
(3)
Seller
should answer all the relevant questions of the purchaser in respect of the
property or title thereof.
(4)
The
Seller is bound to execute a proper conveyance deed (Sale Deed) subject to the
following.
(a)
The
purchaser should pay the amount due in respect of the sale.
(b)
The
purchaser should tender the conveyance deed for execution at proper time and
place
(5)
During
the period between the contract of sale and the delivery of the property, the
seller is bound to take diligent care of the property and documents to the
title.
(6)
The
seller is bound to give to the purchaser or his agent the possession of the
property.
(7)
(a)
The seller is bound to pay all public
charges and rents accrued in respect of the property.
(b)
Pay
interest on all encumbrances on the property, on due cases.
(c)
Discharge
all existing encumbrances except where the property is sold, subject to
encumbrances.
(8)
Seller
is bound to give Warranty that the interest, which the seller is professing at
the time of sale of the property, subsists and he has power to transfer the
same.
(9)
On
payment of full purchase money the seller is bound to deliver all the documents
to title of the property, which are in seller's possession or power subject to
(a)
Where
the seller is retaining any part of the property comprised in such documents he
is entitled to retain them.
(b)
When
the whole of the property is sold to different buyers, the buyer of the lot of
the greatest value is entitled to such document.
Rights of the Seller
(1)
The
seller is entitled to the rents and profits of the property till the ownership
passes on to the buyer.
(2)
Seller
is bound to charge on the property where the ownership has passed on to the
purchaser before the payment of the whole purchase money.
Duties of the Purchaser
(1)
The
purchaser is bound to disclose to the seller any facts, which the buyer is
aware, which materially increases the value of the seller's interest, but the
seller is not aware of it.
(2)
The
purchaser is bound to pay to the seller the entire purchase money on completion
of sale.
(3)
The
purchaser is bound to bear any loss arising from the destruction injury or
decrease in the value of the property not caused by the seller, where the
ownership has passed on to the purchaser.
(4)
Where
the ownership has passed on to the purchaser he is bound to pay all public
charges, rents, and money due on encumbrances and interest there on.
Rights of the Purchaser
(1)
When
the ownership has passed on to the purchaser, he is entitled to the benefits
from improvements increase in the value of the property, rents and profits.
(2)
The
Purchaser is entitled, unless he has improperly declined to accept the delivery
of the property, to a charge on the property as against the seller and all
persons claiming under him.
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