Sale of Immovable Property – The Rights and Liabilities of the Seller

10928861_767789333274231_2306363408022220790_nWhenever a contract is drawn up for a sale of immovable property in India, the seller is given certain rights and corresponding liabilities, towards the buyer. In the absence of the contrary, the fundamental rule book with regard to such rights and liabilities is the Transfer of Property Act which came into effect on 1st July in 1882.

After this act came into force, every seller who wishes to sell his immovable property, which may include land, houses or even apartments or flats in Lucknow, is bound by the express conditions laid down in the sub-sections to S 55 of the aforementioned act, which is highlighted below:

Rights of the Seller

Every seller has certain rights upon the property s/he wishes to sell. These privileges and rights can be further divided as –

  • Before Completion of Sale:The seller is entitled to all monies due from the property, accrued in the form of rents and profits before the ownership passes to the buyer.
  • After Completion of Sale:Generally, the rights of the seller are extinguished once the ownership passes on to the buyer. However, the seller is warranted a charge on the immovable property, in the hands of the buyer, or any other transferee without receiving consideration for the amount of unpaid purchase money. However, he is entitled to such charge only when the possession has passed from his hands and a part or the whole of the purchase money is yet to be paid.

Liabilities of the Seller

Along with rights, the sellers also have particular responsibilities that they need to fulfill while selling their property. These can again be distributed in the subsequent groups –

Before Completion of Sale:

Prior to completion of the sale, the seller is duty bound to perform the following six tasks, with respect to the buyer –

  • To disclose important defects in the asset to be sold or his title to it, of which the buyer is unaware, if it is of material significance and cannot be ascertained by the buyer even with reasonable care and prudence.
  • To produce for with every document relating to the title of the property that the buyer may request to see.
  • To answer all the pertinent questions relating to the property and its title, whichever the buyer may have for the seller.
  • To execute a proper conveyance deed on payment of consideration.
  • Take prudent care of all documents and the property before it passes on to the buyer.
  • To pay all fees, rents and public charges till the date of sale.

After Completion of Sale:

Even after the seller’s flat in Lucknow has been sold to the buyer, the seller is legally responsible in the following ways –

  • The seller is bound to give possession to the buyer.
  • He is duty bound to give all legal documents relating to the property and the sale, once the consideration has been received in full.
  • He is deemed to have contracted with the buyer that his personal interest in the property subsists to the buyer, and he no longer has any right to the property. Thus, the seller’s covenant to title of the property is extinguished upon sale.

Thus, we see the important rights and liabilities bestowed upon the sellers who wish to sell their immovable property in India.

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All You Need To Know About The Title Deed

Flat in Lucknow

A title deed is a written proof of the title and legal ownership and rights that a person has over the land or property mentioned in the document. It emphasises and establishes a legal bond of the property owner with his/her property.

What are Title Deeds?

Paper documents that evidence the true ownership of land or an immovable property are known as title deeds. Title means the right that the owner has over the property. They usually show the chain of ownership over land and property, which may include conveyances, wills, mortgages, contracts for sale and also leases.

Essentials in the Title Deed

The following particulars need to be present in a valid title deed –

  • It must state on its face that it is a Deed.
  • The document must indicate that it conveys some privilege or thing to the buyer.
  • The seller must be legally competent to transfer the property.
  • Attestation by witnesses is necessary.

For a legally binding title deed, the above factors should exist.

How to Obtain a Title Deed in India?

It is essential to obtain a title deed, even though the process may seem to be lengthy and costly. The procedure for obtaining a title deed in India is thus –

  • The buyer has to submit an application to the Urban Development Authority, along with a photocopy of the sale deed.
  • An Encumbrance certificate may also be an integral part of the application.
  • The lease or sale document of the original owner needs to the obtained.
  • The transfer certificate is also a key ingredient of the application process, and is usually provided after proper inspection of the property.
  • Stamp duty needs to be paid by the purchaser.

After the above procedure is complete and the concerned authority is satisfied with the credentials, a title deed is issued in the buyer’s name. This deed is then registered at the Sub-registrar’s office.

Why Are Title Deeds Necessary?

Let’s take an illustration to demonstrate the importance of Title Deeds in India. Suppose Mr. Natwar, from Mumbai, wishes to relocate to Lucknow, in Uttar Pradesh. In order to make the move, he has purchased a flat in Uttar Pradesh and is waiting on the possession. Even after paying the adequate amount on time, the possession of the property has not been passed on to Mr. Natwar. After countless remainders, calls and notices to the seller, the property still isn’t passed on to Mr. Natwar, the true owner; as he paid the amount due. If Mr. Natwar wishes to take the seller to court for specific performance of contract (in this case, handing over the possession of the property), he will not succeed without a title deed.

The sale of the flat in Uttar Pradesh that Mr. Natwar bought is thus incomplete without transferring the title (ownership) from the seller, to him, which is possible through a title deed. It is integral to have the title deed to be verified by legal experts, to ensure that there is no discrepancy or problem with the same.

Title deeds are the ultimate evidence to prove a legal right to property. The process of buying and selling land and immovable property would be chaotic, troublesome and confusing without the presence of title deeds. Also, lack of this legal document may lead to countless dupes and frauds, which victimise the innocent.