Monday, 16 June 2014


Before dealing with the different modes of acquiring immovable property, we shall understand what is immovable is property.The 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 judgements 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 soil.

The Registration Act, 1908, describes immovable property as land, building, hereditary allowances, right of way, lights, ferries, fisheries, or any other benefit that 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 crop or grass.

Immovable Property is acquired by various means:
Direct Purchase: The immovable property is purchased from the owner by sale process.

Gift: The owner of the immovable property donates the property to a person voluntarily without valuable consideration.

Exchange: The owner of two different properties mutually transfers the ownership of one property to another.

Will: It is executed by the owner of the property in favour of the beneficiaries.  This is also known as testamentary succession.

Inheritance and Succession:The legal heirs inherit the property of the deceased.  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 possess, transfer, alienate 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. The 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 an immovable property.According to the Transfer of Property Act 1882, it is transfer of ownership, exchange for a price paid, or promised to be paid, or part paid or part promised.

If the value of the property is one hundred 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 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 the 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 a good legal expert.

Duties of the Seller:
1. The seller should disclose to the purchaser any material defect in the property or in the title, which the seller is aware and the buyer not aware, where the buyer could not discover the defect with ordinary care.

2. The seller is bound to make available to the purchaser the documents of title of the property, which are in seller’s possession or power, for purchaser’s scrutiny.

3. The seller should answer all 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:-
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 of title.

6. The seller is bound to give to the purchaser or his agent the possession of the property.
a. A 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.
c. Discharge all existing encumbrances except where the property is sold, subject to encumbrances.

7. A 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.

8. On payment of full purchase money the seller is bound to deliver all the documents of title to 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. The 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, and 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 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. When the ownership has passed on to the purchaser he is bound to pay all public charges, tax and money due on encumbrances and interest thereon.

Rights of 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 and all persons claiming under him.


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