Tuesday, 20 May 2014


Before entering into an agreement for purchase, verification of title is very important. It is not merely tracing the title but also examination of the genuineness of the records,identification of the property, notification in newspapers and physical possession of the title of the property.Clear and marketable title free from doubts and encumbrances with a right of physical possession of the vendor are necessary ingredients for peaceful possession and enjoyment of the property by the purchaser.

The first and foremost step in purchase of property is the scrutiny of title deeds before entering into an agreement with the seller/vendor. The ownership can be traced from the title deeds and the revenue records. The following are the methods of scrutiny:

Origin of the Property:
The origin of the property is very important to trace the title of the property. It is otherwise called “Root of Title”. To trace the title of the property, examination of the origin of the property up to a maximum period of 43 years may be required in most of the cases. If a person is enjoying the property for more than 30 years, he will get title by adverse possession against the government as per the Limitation Act.  As per Section 90 of the Indian Evidence Act 1872 any document executed 30 years before is presumed to be valid.  Will, Partition, Family Settlement are not considered as concrete origin. Some of the old revenue records like Index of Land, Record of Rights, Phani, Survey documents are considered as better origin.

Subsequent Transfers:
After ascertaining the origin of the property, it should be followed by methodical examination of later events and further transactions 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. To get a clear picture of rightful ownership, title and interest, the advocate has to carefully examine the title deeds and other supporting documents like revenue and other records. It is also necessary to verify the identity of the names of parties and their family connections and examination of the proceeding involving the parties before any Court of Law and other legal forums and authorities including revenue authorities,if any.While scrutinizing the documents, Advocates have to apply their mind and logically link the relevancy of one document with the other.

Present Status:
“Present Status” is an important factor to establish ownership over a property. The advocate has to find out who the present owner is and what are the title deeds and supporting documents the vendor has in his possession, whether it is an ancestral property or self acquired property, who are his legal heirs etc. If the legal heirs of the vendor are major, the vendor must ensure their presence while executing the Deed of Conveyance. If they are minors, 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 existence of legal heirs. Therefore, the advocate must insist upon the vendor to produce either the succession certificate or the family genealogical tree issued by the revenue authority. Similarly, it is necessary to verify and confirm that no acquisition or requisition or any other court proceedings are pending before any authority. It is also necessary to find out whether there exists any bank loan, charges, and encumbrances over the property. 

Statutory Clearance:
For completing the sale transaction, various statutory clearances are to be obtained from the concerned authorities such as Income-tax, RBI, revenue authorities, etc. In case of purchase of agricultural land, there are various other clearances to be obtained before executing the Deed of Conveyance.

The advocate must find out in whose name the Khatha stands, whether the Khathedar possesses up-to-date tax paid receipt in his name and up-to-date Encumbrance Certificate to establish his right, title and interest over the property. The advocate has to check the Encumbrance Certificate covering the relevant period, generally for a minimum period of 13 years to 43 years on case to case basis. An examination of Encumbrance Certificate would go to show as to whether any kind of charge has been created on the property and whether such an encumbrance is still subsisting or not. Municipal and other revenue authorities also maintain records as to in whose possession the property exists, what is the amount of tax payable on the property and up to what period tax has been paid. All this can be ascertained from these records.

Genuineness of documents:
After thoroughly scrutinizing the documents, the purchaser or his advocate has to crosscheck all documents with the concerned revenue or other departments to ensure that the documents are genuine and are originated from the concerned departments and that they are not fake. In the case of buildings, it must be ensured that the vendor has constructed the building as per sanction plan and according to the statutory guidelines.

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 in the schedule surrounding the property must be checked physically. Also, the purchaser may make inquiries tactfully with the adjacent property owners about the ownership of the property he is proposing to buy.

Paper Notification :
Though 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 genuine claimants, if any. Therefore, paper notification will be of some help to the purchaser to make sure as to the genuineness of the ownership of the vendor.

Physical  Possession :
In the case of a vacant site, the purchaser may, with the permission of the vendor fence the property with barbed wire or he may construct a compound wall and put up a signboard, if necessary, to display his  ownership over  the property.

Even after entering into an “Agreement to Sell”, the purchaser can continue to make inquiries about the title. A doubtful title cannot be forced upon the purchaser. Purchaser is not bound to complete the sale transaction, if there are defects in the property, material or latent, which are not discernible in the ordinary course. A mere suspicion of fraud will not make the title doubtful and the purchaser cannot reject the title. It would be of great help if a prospective purchaser utilizes the services of an experienced advocate for a thorough scrutiny of the documents as to the vesting of the marketable title with the vendor and genuineness of the documents who on examination of documents will be in a position to explain to his client about the risk involved in the transaction and guide him suitably so as to save the purchaser from litigations.


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