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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