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Real Estate scenario Post Covid-19
  • By: admin
  • Date: 03 Jul 2020
  • Property
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  • Views:206
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The country is under the lockdown from almost four months now. Everything has come to a standstill, and slowly and steadily, the government’s step to reopening businesses is providing relaxations on lockdown so that people can go back to their normal life. Under the 5th version of the nationwide lockdown, many states have lifted the lockdown, but with this, the lockdown has also become rigid in the containment or red zones.

Being a developing country, the outbreak of the novel virus in the country has affected the small as well as the larger companies. Every sector is facing its difficulties, from cash flow in the market to the reduction of supply and demand in the market.

India, where the growth rate of the economy is already set to slow down to a record 11-year-old, a prolonged lockdown in the country will only further worsen the situation in Asia’s third-largest economy. Some of the research agencies are predicting a near-term halt in the growth rate of the real estate in India. The Prop Tiger data shows housing sales in India’s nine major cities declined by 26% in the period between January-March 2020. How badly, the real estate is affected can be seen in the last quarter of the fiscal because March is usually one of the biggest months of sales. In the year 2019, deal volumes in office space in India increased by 27% to an all-time high of over 60 million sq. Ft. However, any records or reports made before the lockdown stands retracted as the situation has changed now.

More than that, the Real Estate sector will have to recover from a record 65% default rate during the lockdown, and it is in this light that when a nationwide economic stimulus package was announced, the Prime Minister laid out a specific and separate plan for the Real Estate sector, this was hailed as a timely and much-needed implementation on the part of the government.

Impact on Builders

The builders of India had hoped from the government to announce some relaxations regarding the unsold stock that the builders had with them due to the ongoing crisis. The country’s non-banking finance sector, a key source for housing sector funding, made borrowing for the public extremely difficult, which jeopardized their plans to deliver projects within the stipulated time. The unsold stock with the developers was around Rs 6 lakh crores as of March 2020. The construction has been put on a halt due to the lockdown, and there has been a delay in supply of manufacturing material and equipment from China, this will further push delivery timelines of ongoing projects, consequently increasing the overall cost for developers.  The government of India has announced several measures in its coronavirus-specific stimulus package and the EMI holiday for developers during the crucial period are some steps that might offer some relief to the builder community.

The pandemic has hit the country at a time when statutory pay-outs and streamlining of balance sheet happens for the builders. Therefore, to combat this situation, the builders have asked the government for some economic interventions like rescheduling loan repayments, a one-time rollover for debt restructuring and deep interest rate cut. Furthermore, the government has placed limitations on construction sites, requiring the presence of a COVID marshal at all sites, and requiring the workers at these sites to undergo a health check. While being welcome measures, are cumbersome and difficult to implement considering the largely unorganized nature of building and construction work; it should be kept in mind that most measures taken by the government in the construction sector have happened in the earlier stages of the lockdown, where towards the end of March the government had ordered the release of 52,000 Cr. to alleviate the income crunch of construction workers, in the same fell swoop, the government by the end of April had acquiesced to the demands of building and construction companies in their demand that sending workers home might be detrimental to the industry and in the ‘Lockdown 3.0” notification on May 1st had permitted construction sites to work at full capacity provided social distancing guidelines were followed.

The most significant measure taken during the lockdown, especially for the real estate sector has been the government’s instruction to treat the lockdown, and ensuing consequences of COVID as ‘Force Majeure’ under the RERA, this will allow the liabilities accrued during the pandemic to be written off, or rendered in actionable.

Impact on Home-Buyers

There were chances that the low-interest rates (home loan interest rates are 8%) and high tax exemption (rebate against home loan interest payment is as high as Rs 3.50 lakh per annum) were going to make some changes in the behaviour of the consumer in the market, but due to the outbreak of the virus, there are no chances that it will change the behaviour of the consumer. Moreover, amid the lockdown, it is next to impossible that site visits can be made by the buyer, which in turn is delaying the purchase decisions. As the coronavirus has impacted all the sectors of the economy, troubles have compounded for India’s realty sector, which has been dealing with a challenging scenario, since the government has released the economic policies. The slowdown in the business has been from February almost, and due to the non-existent of the site visits, the decision-making process for the purchasing is hugely delayed. As there is no clarity of the business security to many of the employees amid the lockdown, a final decision on property purchase cannot be made. Despite these issues, the industry is confident that demand for real estate will go up in post-lockdown, due to the potential increase in sellers of unused real estate assets.

Even when the RBI has announced several rate cuts, and the repo rate is brought down to 4%, still any of its positive results will only be witnessed in the medium to the long term. However, the step has come to major support for the current buyers who will be able to pay the EMIs in the short-term because of the lockdown and in the medium terms in the event of job loss.

Despite this, it is not all doom and gloom for the housing economy post-COVID, since individual buyers will be in an advantageous position for once, thus enabling them to contribute in a way to the speedy recovery of the Real Estate Sector especially the housing sector, there is also slated to be a surge in buyers looking for immediate accommodation in the aftermath of the pandemic, as the rental home sector has seen the highest number of evictions and uncertainty for the first time in a long time.

Impact on Office Spaces

Recent reports suggest that India has indicated that over 70% of companies would extend the work from home policy for another six months to further avoid the spread of Covid-19. A similar trend is being adopted globally. The companies worldwide have debated, if the work from the home policy could replace the workspaces in the future. The answer to the debate can only be given through the ultimate level of success achieved by businesses through remote working.

The office utilisation demand rates will fall as remote working areas rise and landlords with exposure to short-term leases are the most vulnerable as the delay to investment activity and softer rental growth than previously forecast are headwinds to 2020 performance. This is not to say that short-term leases are not being considered on a serious note by many small and medium firms in the country, because of the increased investment in work from home capabilities, and cuts in expenditure therefrom, companies are considering halting long term rental plans to explore a more flexible short term arrangement for their employees. It is also theorized that companies, due to the lower prices of commercial real estate, would be more amenable to purchasing office spaces,for a more permanent solution to the ‘social distancing problem.

While stating that the demand for remote working and investment in collaboration technologies would grow, fast-tracking a widespread adoption of these practices, the report, says that this trend can’t be perceived as a threat to the future office demand. “A focus on higher utilisation and densification of space has already driven efficiencies and resulted in limited excess space in optimised portfolios. Rising employment in relevant sectors will more than outweigh any impact on demand from home-working. With a reduction in the demand of the working spaces, the economy of the country is also highly affected.


Every industry and sector is facing its own battles, and similarly, real estate is one of the major sectors which will witness a huge change in its demand. There is a huge drop in demand for the properties due to less or zero money supply in the market, and this situation in the country has been created due to the outbreak of the novel coronavirus. Half of the population is with no income anymore, and half of the population is struggling with very basic income, this has put many restrictions on the sale of luxury goods. In these testing times, it is not easy to convince people to invest in areas like real estate. Moreover, the research studies suggest that India is currently the 4th country which has been the most affected by the virus the most, thus adding into the situation. It is important for the government now, to reduce the costs of real estate and make sure that people who work for real estate do not suffer. Laws can be revised for the same, and better policies can be created for the one selling, and also the one who is purchasing.

This article also highlights that there is the very real possibility and potential that the real estate sector might bounce back once the pandemic has been contained and both private and commercial consumers of real estate try to take advantage of a buyers’ market, and may also cause a frenzy in their desire to not depend on leaseholds that proved to be extremely volatile during periods of economic crisis as shown by the months-long lockdown.

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Title Verification of Immovable Property

By: Adv. Aniket Nerurkar Property 08 Jun 2020

There are a few essential steps one needs to adhere to before a sale of a property is concluded. This will include the registration of the Sale Deed, the examination of the property in question, and affidavits on behalf of the seller that the property is unencumbered and that immunity and indemnity shall be provided in the event that any claim is brought as against the buyer. Of these, most of the onus is on the sellers to ensure that the property is free from all obligations on his end and that the title passes smoothly over to the buyer. The buyer, on the other hand, is at the mercy of the information the seller chooses to reveal regarding the status and encumbrances relevant to the transaction. Usually, the buyer is protected from any omission on the part of the seller, through Section 41 of the Transfer of Property Act, the transfer of property by an ostensible owner done in good faith by the buyer who has no way of verifying the truth about the ownership is protected and shall not be held voidable just on that basis.

This paper is concerned with a more relevant concern for the buyer: The responsibility of ensuring that the property that he purchases is free from encumbrances and that the title to the same is vested in the person posing as the owner of such property. It is important to note here that in the Transfer of Property Act, despite the good faith defences available to the buyer of the property, the caveat is always that the buyer has done everything in his power to verify the truth of the matter. This caveat is important since this forms the basis for dispute resolution in all matters involving the sale of immovable property where the defect in title is alleged by the buyer.

While it is important that the seller provides information in good faith, and that the buyer demands such information to be turned over to him, it is equally important that the buyer conducts his due diligence in concluding such a contract of sale. If there is any information that is relevant to the current transaction that the buyer is able to access within reasonable limits, then it becomes the onus of the buyer that such information is accessed and considered by the buyer. If the seller doesn’t provide such information as is easily verifiable by the buyer, it doesn’t become a ground for the voidability of the contract. This responsibility of the buyer is based on the ‘caveat emptor principle’ that the buyer should beware of the transaction he is entering into. While there is a mismatch in terms of the access to information between the parties, the public availability of title information has bridged the gap somewhat and made the burden on the buyer stricter in nature, as he will now have no claim against the seller, that the information was withheld from him.


Procedure for Verification: Practice Aspect

This paper would now spend some time elaborating the specifics of procedure in seeking title verification if one is a potential buyer. The Transfer of Property Act does not make any provisions for the procedure to verify title deeds and other such particulars. It merely requires that the buyer can verify them in a reasonable manner and proceed accordingly. In India, title documents are private property along with the property they represent, and the Registration Act 1908 only requires that the transfer deeds are placed with the registrar. Hence the only publicly available source of information about the validity of title is in the sale and transfer of deeds registered and placed with the registrars’ office. Other than this, there is a proposed land titling act, that seeks to collect all information pertinent to the title of a given property and make the chain of possession and the title a matter of public record.

For the time being, the buyer is required to place a request with the District Registrar’s office, and the full chain of titles in terms of the transfer history of the property can be verified by the buyer. This still won’t be enough, since the title itself will be in the hands of the seller, and the same will not be publicly available for the buyer to verify, hence despite the ability of a buyer to obtain information regarding the transactional history of the property the ultimate title document that will verify the possession of the land/ immovable property will still remain elusive. In the alternative, buyers are limited to the private enquiry and investigation through title firms. These are not backed by the government and the information procured might not be accurate, or in some cases less reliable. Yet, such information does play a vital role in determining litigation concerned with the transfer of immovable property. 

Beyond this, the process of title verification begins when the buyer sends a receipt for receiving copies of the title deed of the seller and the original version of the title deed of the seller will be the basis for such investigation. When the title copies are received, then the buyer shall use them as a reference when he places a request at the Sub-registrar’s office, once such record is turned over, the responsibility on the part of the buyer is to verify the possession and the transfer details of that property for at least the last 30 years: This is because under Section 90 of the Indian Evidence Act there is a presumption of accuracy for all documents written and agreed upon beyond that period. This is the general procedure, and some states might have differing requirements. For instance, Maharashtra has a standard document known as the 7/12 document that is used to determine the antecedents of that property. At this stage, the buyer will also be able to access any lit-Pendens information at the sub-registrar’s office, and this should also be verified. In the event that the transaction is not registered, then the expectation is that the seller takes out a notice in local newspapers, or any such publicly accessible forum so that any contrary claims can be discovered.


Precedent and Application of Doctrine of Constructive Notice

These steps and this burden of proof is necessary because, in India, we follow the doctrine of Constructive notice. This means that, if a fact is reasonably within the means of a party to discover, then the legal presumption shall be that that party is aware of the same unless that party adduces clear evidence to the contrary that such information was withheld, or that it is not reasonably available to him. It is initially in the case of Royal British Bank v Turquand 1856 E&B 627that such a presumption was used by the court, even though this is a company law dispute, the ratio that such facts as are usually under the purview of a party are understood to be so unless there is a good reason that such is not the case.

In India, the doctrine was referenced by the Supreme Court in Ahmedabad Municipal Corporation V Haji Abdulghafur Haji Husseinbhai 1971 1 SCC 757where it was held that the doctrine of constructive notice under Section 3 of the Transfer of Property Act does not extend to inquiring about arrears of municipal taxes. This case lays down two important principles regarding constructive notice in property law: 1. That the presumption shall lie regarding information that is accessible by the buyer. 2. Such information that is reasonable to assume shall be inquired after in the regular course of events. The same has been carried over in all subsequent cases regarding the verification of title for immovable property.

This doctrine can be interpreted the other way around as well: That the buyer will bear full responsibility of doing his due diligence, and any fact that could have been discovered as a result of such due diligence, and has not been, shall be ascribed to the detriment of the buyer. As can be seen in the case of Sharfudin Valad Tajudin v Govind Bhikaju Bade (1904) ILR 27 Bom 294in the Bombay HC, the decision cantered around a non-registered prior transaction that encumbered the property in question. The court held that the doctrine ii the Transfer of Property Act will not apply to such unregistered transactions for which the buyer, despite the due diligence, will never be able to recover information. Further bolstered by the ratio in A.K. Lakshmipathy v Rai Sahib Pannalal Hiralal Lahoti 2006 (6) ALT 238, this case is the antithesis of the previous decision, that ‘the buyer needs to carry out this due diligence’ is a necessary component of a sale conveyance, which cannot be forgone unless there is a term in the contract guaranteeing marketable title over the property in question: held in concurrence with Madurai Chetty v babu Sahib AIR 1920 Mad 859.

A potential buyer is shielded from any fraudulent intentions on part of the sellers, as long as he himself is not knowledgeable and has not participated in the furtherance of the said fraudulent intention: Held in Kirtiben Hitendrabai Patel v State of Gujarat R/ CM/3598/2020, where the mere participation of the buyer in the conclusion of the transaction despite knowledge of fraudulent title has been held to void the contract and bring upon criminal charges.

Beyond these, the next most important matter of due diligence is the perusal of the actual title deeds of the seller in pendency of such sale agreement. Since the mere signing of the sale deed doesn’t equate transfer of possession which; as held in Suraj lamp Industries V State of Haryana (2012) 1 SCC 656.

It was then held in V. Sambandan v Punjab National Bank 2017 AIR CC 2266that in auctions and other transactions where the seller is not a direct owner of the property, or when information about the property is not publicly available, the buyer need not satisfy a higher burden than establish that a request for information regarding encumbrances has been submitted. At the same time, Shakuntala Bholla v Sheel Chand Jain (2009) 157 DLT 201 (Del.) held that since the title deed itself is not public domain, non-service of the requisite copy is a violation on the part of the seller and that in such a situation the doctrine of the constructive notice shall not apply in voidance of the transaction.

It was held that the knowledge of fraud voids the status of the buyer; per contra. The Delhi High Court held in Samrat Singh Nirula v State of NCT Of Delhi (2015) 220 DLT 523held that the buyer, despite access to title deeds will not be held responsible for detecting any inference that requires professional input to do the same (inference that buyer cannot be expected to detect a forgery in the title deed).


Conclusion/ Summary

Through these cases, one can say that the following responsibilities fall on the buyer when entering into a sale deed for immovable property:

  • The title deed in possession of the seller needs to be perused: Any discrepancy noted and reported back. Receipt for copies thereof must be sent.
  • Examination of all transactions regarding the property going back at least 30 years needs to be examined. If not found, an affidavit for the same needs to be marked, and the seller needs to be requested for further documentation.
  • Only those encumbrances that might reasonably be expected need be checked for, not every random attachment to the property.
  • If any malpractice or fraud is brought to the notice of the buyer, he must back out of the transaction. Otherwise, he will be assumed party to the conspiracy to fraud.
  • The technicalities such as forgery, or benami arrangements are usually assumed beyond the reasonable capacity of the buyer and need not be noted.
  • If the entire transaction details are private: Then notice needs to be given, or private inquiry needs to be held, the buyer cannot sit by idly.

Public notices are an important part of any legal process to notify the general public of any important matters. General awareness about a legal proceeding is achieved through putting out advertisements in the newspapers hence it is also essential that public notice of the transfer of property is given in two local newspapers in order to invite claims and objections if any.

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Basic Elements of Transfer of Property Act, 1882

By: Adv. Jayatinn B. Laalwani Property 16 Mar 2020

The term property is interpreted in numerous ways. Everything that revolves around an individual can be considered as property. However, in law, the definition of property broadly differs. According to law, the term Property includes the following:

  • Only an individual’s proprietary rights and not his personal rights.
  • All the legal rights in relation to his property i.e. complete ownership of material as well as incorporeal things.
  • According to the Apex Court of India, the term property includes both “corporal materials” such as land, machinery and also the “incorporeal things” such as the trademarks and patents.  This definition of property was given under the case of “RC Cooper vs. Union of India 1970.”

Types of Properties

The term “property” can be divided into two:

  1. Corporal Property
  • A corporal property is tangible in nature, which means such property is physical and can be seen and touched by an individual.
  • It involves the right of ownership in material things.
  • For example: Land, machinery, ornaments are considered to be corporal properties.

Further Corporal Properties are categorized into Movableproperty and Immovable property.

  1. Incorporeal Property
  • Incorporeal property is intangible in nature, which means there is no physical existence of such property.
  • The owner of an incorporeal property has the right of ownership in “rem”.
  • For example: Right of easement and Copyrights.

The transfer of Property Act, 1882, was enacted on 17th February 1882 and came into force on 1st July 1882. This act deals with the regulation of transfer of property in India. Basic Principles related to the transfer of Property Act are listed through this article.

Concept of Property

A proprietor who has the exclusive rights on the things that are owned by him when he is free to claim, dispose, and use them as he pleases. The proprietor also has the right to exchange the property or to gift it. The proprietor enjoys the advantage to rent, sell, mortgage, transfer, exchange, consume or even destroy them.

Following are the basic principles of Property Rights:

  • Right to exclude any other person from the property.
  • The right to sell or transfer the property to any other person.
  • Exclusive rights over the property enjoyed by the owner or the proprietor.
  • Free to derive any benefit from the property.

Conditions restricting Transfer

Section 10-18 of the Transfer Property Act, 1882, lays down the various kinds of restrictions that are imposed on the transfer of a property.  “Condition Restraining Alienation” is said to exist when the transferee’s (the person to whom the property is transferred) power to dispose or transfer the property is restricted.

Section 10 of the Transfer Property Act, 1882 states that when a transferee is restricted through limitation or “absolute” restriction from alienating the property, then such contracts are void and invalid in the eyes of the law.

Exceptions to the rule:

There are two exceptions to this law. They are:

  • When the property is transferred for the benefit to a woman who is (not a Hindu, Muslim, or Buddhist), put under a condition that she is not allowed to transfer or create any encumbrance in the sale of property transferred to her.
  • In the cases when the agreements are of a lease, as in such agreements, the restraint is for the benefit of the lesser or the estate leased out.

Absolute Restriction

Constraints are put on the alienation of the property. As per section 10 of the Transfer Property Act, 1882, “absolute restriction” is void and invalid in the eyes of the law.

Partial Restriction

As the name suggests, these restrictions are partial. They don’t put restrictions on the total alienation of the property and, thus, such restrictions are valid.

Case Law

  • Renand vs Tourangeaon

In this case, the property was transferred with the condition that the transferee further should not sell it for the next 20 years. However, the Court held that such conditions are not partial but absolute in nature, and therefore, this transfer is void. Section 10 of the Act declares any such agreements void and null.

For instance, if this period had not been of 20 years and was of 2 or 3 years, then such condition would have considered as partial restriction and then it would be not void.

  • Rosher vs Rosher

Mr J B Rosher made a will to gift his son a piece of his property. In the will, he also included that in future his son would be only allowed to sell this property to his mother Mrs. Rosher, at the one-fifth rate and no one else. The court, in this case, held that by putting up the condition of selling it only to a single person leads to absolute restriction, therefore making it null and void.

Definition of Transfer of Property

As per section 5 of the Transfer of Property Act, 1882, transfer of property means “an act through which a living person transfer his property, in present or future, to one or more other living persons or himself.” A living person can be an individual or an association or a company or body of individuals, importance of the fact, that it’s incorporated or not. The word “Transfer” has a wider scope, and it covers the transfer of a single property or more than one property.

Requirements of a Valid Transfer:

  • The property which is being transferred should be lawful.
  • Section 5 of the Act specifies that transfer should be done between two or more living persons.
  • As per section 6 of the Act, the property shall be transferable or non-transferable.
  • Section 7 of the Act deals with the individuals who are competent for the transfer.
  • Section 9 asks the individuals to do the transfer of property as mentioned under the Act.

Features of Transfer of Property, as mentioned under section 5 of the act are: 

  • The transfer of property can take place in future, but the transferor should be a living person.
  • The transfer of Property can be expressed or implied.
  • A transfer can happen only from living person to another living person.
  • Other laws that govern transfer are not affected by the Transfer of Property Act.
  • A living person also includes associations and companies.

Types of Transfer:

  • Sale: It is a type of transfer, which is done in exchange for money.
  • Exchange: It is under the influence of the Barter System. The property is transferred; however, the consideration is not money but something else.
  • Lease: The holders of immovable property are given rights for a limited period of time.
  • Mortgage: It is a limited transfer of an interest in the property.
  • Gift: As the name suggests, it is given for free, under the influence of love, affection, care. It does not involve any consideration.

Person Competent to Transfer:

  • The person should have attained the age of 18. In cases where there is a guardian, the age barrier becomes 21.
  • The person should be of sound mind.
  • A property can be disposed of under the power of attorney.

Case Law

Mallikarjuna vs Mareppa

In this case, the property was brought under the name of a minor child by their guardian. After a few years, the property was sold off, when the son was still a minor. The court declared the sale null and void as the guardian failed to take the permission under section 8 of the Hindu Minority and Guardianship Act, 1956, which is mandatory.

Transferrable and Non- Transferrable Property

Section 6 of the Transfer of Property Act, 1882, lays down the properties that may or may not be transferred. Property is generally transferable, however; the properties mentioned under this section are not applicable for transfer from one party to another.

Clause (a)

The term “Spessuccessionis” means when a piece of property has the chances that it may get transferred in the future through:

  • Chances when a property is transferred because of hierarchy/Legacy.
  • Chance of an heir-apparent succeeding an estate.

Clause (b)

This section is regarding the right of Re-entry. The general transferability states that a mere right of re-entry for breach of a condition subsequent cannot be transferred to anyone except the owner of the property affected. Such types of clauses are usually helpful in a lease agreement, where the lesser wants to protect or safeguard his property.

Clause (c)

It covers the topic of an easement. It is basically a right which is connected to the property and has no existence independently. Therefore, the transfer of such properties is not possible and is restricted under clause (c) of section 6.

Clause (d)

It says that an interest in property restricted in its enjoyment to the owner personally cannot be transferred. For example, if a person is staying on rent, he/she is not entitled to transfer that property. It is also known as the clause of restricted interest.

Clause (dd)

When a property is applicable for future maintenance, the right to future maintenance is solely for the personal benefit of the person to whom it has been granted and therefore, this very right cannot be transferred further.

Clause (e)

A mere right to sue cannot be transferred from one party to another. If the right to sue is for indefinite amount, it cannot be transferred, and if the amount is definite, it may get transferred.

Clause (f)

It covers the concept of Public office. The salary of a public officer is non-transferrable.

Clause (g)

The clause mentions that Pensions given to the politicians and government officials can not be transferred. It also involves the stipends provided to the naval, air-force, and the military officials. A will cannot be executed in this case, as it can be only made in respect of an estate.

Clause (h)

No transfer can be made insofar as it is opposed to the nature of the interest affected thereby. Thus, the things which are dedicated to public or religion uses or service cannot be transferred.

Clause (i)

This section makes it clear that a tenant having a un-transferable right of occupancy cannot in any way transfer his interest.

Transfer to an unborn child and Rule of Perpetuity

According to section 13 of the Transfer of Property Act, 1882, a property can be transferred from a living person to an unborn person. Section 13-16 is the general exception to the rule which states that a property can be transferred from one living person to another.

Certain provisions need to be followed when a person wants to transfer property to an unborn child. These particular sections of regulations have been adopted from England is also termed as “The rule of Double Possibilities”. The provisions required are as follows:

Existence Matters

The unborn should have come into existence before the death of the last property holder. Existence means, the unborn should have been present in the mother’s womb. If there is no pregnancy, then the property on the assumption that a future child will be born, a person cannot transfer the property.

No direct Transfers

Direct transfers cannot be made to an unborn person. As per section 13, when a transfer is to be made to an unborn person, the transfer first needs to transfer it to a living person. A living person can be trusted with the transfer unless the unborn is born or a trust can be created.

The basic principle laid down in Section 13 is that the person who is transferring the property shall not bind the free disposition of the said property for more than one generation. A person can enjoy the interest in the property, till the unborn comes into existence.

Instant Transfer of Rights

The transfer of rights should take place in a minimal amount of time. As soon as the child is born, all the transfer rights have to be vested in him/her. A transfer can be made to an unborn person, but not to the next generation of the unborn.

Rule against perpetuity

Section 14 of the Act, governs the rules against perpetuity.

The main objective of the rule against perpetuity is that there are people who have an interest in keeping the property in the family, from generation to generation. Such a situation leads to a significant loss for society. This activity deprives people of the benefits that arise through this property. The rule against perpetuity makes sure that there is free circulation of property, and not only do people enjoy the benefits, but also for the betterment of the property.

Under section 14, the following conditions need to be followed:

  • A transfer of property is a must.
  • The ultimate beneficiary should be in the benefit of the unborn child.
  • The unborn person must be in existence, at the expiration of the interest of the living person.
  • The vesting of an interest in favour of the unborn must be preceded by limited interest or the life of a living person.

There are certain exceptions, to the rule against Perpetuity. They are:

  • Rule against Perpetuity does not bound personal agreements
  • Pre-emption
  • When a property is transferred for public benefit.
  • Transfers which are covenants of redemption
  • Certain agreements which are for perpetual lease.

Vested and Contingent Interest

Vested Interest


Contingent Interest

As per section 19, if during the transfer of property, an interest is created without any terms and conditions, then it is said to be a vested interest.


According to section 21 of the Act, contingent interest is created when it is specified that certain event should take place for the interest to be created or when it is mentioned that an event should not take place.

There is an immediate or present right even though the enjoyment is postponed.

In this case, only a promise exists to give a right.

If the transferee dies, the interest is not influenced.

In the situation where a transferee dies, the contingent right is affected.

Vested interest is heritable as well as transferrable. Therefore, when a transferee dies without the possession, the right gets transferred to its heirs.

Contingent interest is transferrable. However, its heritability depends upon the nature of the condition. It does not automatically pass to the heir of the transferee.


The Transfer Property Act, 1882, one but many elements which need to be complied with appropriately to transfer a particular property from one person to another. Therefore, it becomes essential that a lawyer is hired when someone wants to transfer a property. It becomes an easy task for an experienced lawyer to engage in such contracts. Further, all the hidden expenses can be reduced.

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Transfer of Property Act

By: admin Property 12 Feb 2020

When a person owns a piece of immovable property, the law gives them the right to use, lease, sell, transfer, gift, mortgage that piece of land. Transfer of property has been defined as an act by which a living person transfers property, in present or future, to another living person or to himself and one or more other living persons (including a company/association/body of individuals).


A Transfer of Property is a contract and hence, all requirements to constitute a valid contract are to be satisfied.

  • The Transfer shall be between two or more persons
  • The property must be transferable  in nature
  • The Transfer of property must not be forbidden by law, not allowed to defeat the provision of any law, the transfer must not be fraudulent, and not cause injury to the person or property of  another.
  • The Transfer must not be of a property that is deemed immoral or opposed to public policy.
  • Every person entering into a deed of transfer should be competent to transfer the property. A person competent to transfer is a person competent to enter into a contract.


Some Important sections of the Act are as under: -

  • According to section 9 of the Act, any property may be transferred orally for which a written transfer is not expressly demanded by law.
  • Section 13, of the Act does not permit the transfer of property directly in favour of an unborn person. During the transfer, it is essential that the person to whom the property is being transferred shall be in existence since transfer cannot be made directly to an unborn person. It can, however, be made by creating interest in favour of a living person in existence at the date of transfer.
  • Section 14 of the Act creates a rule against perpetuity by permitting perpetuity up to a certain period and not beyond that.  Vesting of property cannot be postponed beyond the life of the living person and the minority of the unborn person.
  • For Example:  If a property is transferred to a living person, AB for life, then to XY for life and then to the unborn child of XY. The child of XY must exist during or before the date of expiry of the life estate in favour of XY. In this case, when the unborn child attains the age of majority, i.e. 18 years plus one day, the transfer shall stand void. Since, if perpetuities are permitted, the property in question will soon become ex-commercial.
  • Unless a different intention is expressed, a transfer of property passes to the transferee all the interests attached with the property — for example, all things attached to the earth within the area of the property to be transferred.
  • Section 48 of the Act states that no man can convey a title than what he has.
  • Section 53 of the Act states that every owner has the right to transfer his property as he wishes, but the transfer must be made with a bonafide intention and should not constitute a fraudulent transfer.
  • Hence, for property to be transferable, several conditions need to be fulfilled for it to constitute a valid transfer.
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Land Records & Titles

By: Adv. Jayatinn B Laalwani Property 31 Oct 2019

In India, the land is a valuable asset; its value depends on its location and the growing population. The demand for land keeps on increasing, while the supply is limited. Access to land impacts the livelihoods, industrial, economic and social growth. The ownership of land is determined by the title of the land. The title of the land should be clear so that it protects the rights of the title-holder against the claims made by others for that particular property.

Land ownership in India is determined through different records such as sale deeds, government survey records and property tax documents, but these documents are not a guaranteed title to the property by the government as those are only a record of the transfer of property. Land records consist of types of information which are maintained in the government offices of different districts and villages. Poor land records could affect the transactions of future property.

Need For Clear Land Titles

There are various lands in India, the titles of which are unclear due to several reasons. Land titles are unclear due to legacy issues and the gaps in the legal framework, poor administration of land records and zamindari system. Thus, the unclear land records lead to legal disputes of its ownership, which affects the sector of agriculture and real estate. The land is also used as collateral for obtaining loans by farmers. Disputed lands lead to a lack of transparency in real estate transactions, making them inefficient in the market. To execute the new projects, it requires clarity on the value and ownership of the land; therefore, it becomes difficult in the absence of clear land titles.

Under new urban development schemes, cities try to raise their revenue by way of land-based on financing and property taxes. It becomes necessary to provide a clear land title in urban areas.

Why Are Land Titles Unclear?

In India, ownership of land is presumptive. The Transfer of Property Act, 1882 and the Registration Act, 1908lists down the provisions relating to the sale or transfer of the land.  Therefore, the registration of the property refers to the registration of the transaction and not the title of the land. While registering the transaction of property, the buyer has to pay a registration fee along with the stamp duty. The rates of stamp duty are calculated on the cost of the property and vary from state to state.

It raises the cost of property transactions, which leads to avoiding the registration of the transaction. All transaction of the property is not mandatory to register, under the Registration Act, 1908. It includes the acquisition of land by the government, heirship partitions, court orders, and property leased for less than a year.

Land records contain various types of information such as details of the property, past transactions, details of property mortgage, etc. Mistakes are often noted in land records at the departments. For example, the transaction of a registered property through a sale deed may not be updated in the survey department.

Legal Framework

The transfer of land or property is recorded through a sale deed, which is to be registered under the current legal framework. Transfer of land takes place through sale, purchase, mortgage, tenancy, inheritance, etc. The Transfer of Property Act, 1882 states that the right, title and the interest of the land can be transferred through a registered instrument.

According to Registration Act, 1908, while registering a sale deed, it is checked whether the last sale deed was recorded correctly. At the time of registration, the details of the buyer and seller are checked and verified through various identity proof documents. Registration of sale deed makes the document of transfer a permanent public record which helps in monitoring and verifying under whose name the land was previously registered in the land records. If a sale deed is not registered, then it is not admissible as evidence for ownership in the court of law.

The onus of checking the validity of the title of land is on the buyer. It is challenging to carry on the process of verification if the records of land are not maintained in the government departments.

In a dispute over the title of a land/property, the parties asserted that the title is placed on their name and it should be reflected in the revenue records. Recently in January 2019, in the case ‘Smt. BhimabaiMahadeoKambekarVs, Arthur Import and Export Company’, the Supreme Court clarified the law that the mutation entry of land in the revenue records does not create or extinguish the title over the land. The mutation entries are maintained for the commercial purpose and to ensure that the land revenue is paid by the person whose name is recorded.

The records maintained are supposed to reflect the changes as some transactions like gift deed are to be kept in revenue records and not necessarily required to be registered under the registration act. Since land is a concurrent subject in Indian Constitution, both centre and state have law-making power.

The Indian Constitution has clubbed the maintenance of land records, land revenue, survey and records of right in the State List. Whereas in Concurrent list, the subjects listed by parliament are stamp duty, registration act, transfer of property act, etc. have a direct bearing on land records. In order to rectify the anomaly in the land situation, the central government had drafted the Model Land Titling Bill, 2011, which aimed to move towards establishing the titles under the government notification. The government launched the National Land records Modernizing Program 2008 to address the issue of land titling in India.

Unfortunately, due to some primary reasons like unexplained clarification of inadequate land records, unexplained functioning of authorities in the current system, the bill did not create many blends in the State Legislature.

In R.SureshBabuvsG.Rajalingam And 2 Others, the High Court of Andhra Pradesh stated that the registration of every document is compulsory under the Indian Registration Act. Such document if not registered, will not be allowed/ enforceable for the purpose of specific performance. Any unregistered document will not be allowed to submit as proof of the act of registration or any claim for any property. Such a document will not be admissible in the court of law. This decision provided by the Andhra Pradesh High Court is subject to changes if appealed in the Supreme Court.   


After the enactment of the Real Estate Regulation Act (RERA), 2016 mandates the State Government to title the upcoming real estate transaction. It has put a significant impact on the poor records of titles. The system of maintaining records envisaged under the Registration Act runs parallel to the records maintained by the revenue department. Real estate has become an area where the absence of a transparent system of titling has an enormous transaction cost.

A solution to the problem of land titling lies in the upcoming technology drive that should be initiated in the legislative. The use of artificial intelligence-based solutions can be used to track the illegal constructions and incomplete title records of land.

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The Real Estate (Regulation & Development) Act

By: Adv. Ayantika Mondal Property 24 Sep 2019

The Real Estate (Regulation and Development) Act gave India’s real estate sector its first regulator from, May 1, 2016. It seeks to bring clarity and fair practice that would protect the interests of buyers and also impose penalties on errant builders.

RERA seeks to address issues like delay in possession, price issues, quality of construction, title, and other changes. Delay in projects is the most significant issues faced by buyers. Projects launched are often delayed due to several reasons. The reasons include deviation of funds to other projects, change in regulations by the authorities, the environment ministry, national green tribunal, involved in infrastructural development many places; the land acquisition becomes an issue, etc. Some builders often sell projects to investors without the approval of the plan or with poor quality of construction or unauthorized construction; such projects are often stuck in long litigation battles.

RERA establishes a state authority which will govern both residential and commercial real estate transactions. It ensures more clarity between the developers and buyers.

Homebuyers have been complaining fora long time about unbalanced real estate transactions heavily in favour of the developers. It aims to create a more impartial and equitable transaction between the seller and the buyer of properties. This Act mandates each state and union territory, to frame the rules which shall govern the functioning of the regulator.

Ongoing projects where the completion certificate or the occupancy certificate not been issued, are also required to comply with the registration requirements as per the Act. At the time of applying for registration, the promoters are required to provide in-depth information on the project, i.e., land status, details of the developer, promoter, approvals, schedule of completion, etc. Only when registration is completed, and other permissions related to construction are in place, then the project can be marketed.

One of the primary reasons for the delay of projects is that the funds collected from one project would invariably be diverted for funding different projects. To prevent such diversion, promoters are now required to deposit 70 percent of all project receivables into a separate account. These project receivable can only be used towards land and construction expenses and will be required to be certified by a professional.

Objectives of RERA

  1. To protect the interest of the customer in the real estate sector.
  2. To establish ways for a quick settlement of the dispute.
  3. Sale of the building, plot, an apartment to be transparent.
  4. To form the Appellate Tribunal to hear appeals.

Salient Features

RERA was established for enhancing accountability and transparency with respect to real estate transactions.

Following are the salient features of enacting RERA:

  1. All real estate projects should be registered under RERA.
  2. The registration of a particular project can be cancelled ifRERA authority receives any complaint to be true after an inquiry.
  3. A property cannot be sold if not registered with RERA.
  4. It is mandatory to upload the details of the project on the official website of RERA.
  5. If the buyer has any complaints against the builder regarding the violation of the provisions or rules of the RERA Act, they can file a complaint with the RERA authority. 
  6. If any decision of RERA is not satisfactory, the aggrieved party can submit an appeal before the Appellate Tribunal.

Benefits of RERA Registration

  1. Prevention of Funds: RERA prevents insolvency by creating a separate Escrow account for borrowers related to all transactions of real estate.
  2. Authenticity: The Certification of RERA assures confirmation to the promoters and brokers as it will attract more buyers in the future.
  3. Complaints: The registered promoters and brokers are empowered to file a complaint with an appropriate authority.
  4. Flexibility: RERA makes it convenient for the promoters to choose the date of delivery of the project as per their wish.
  5. Professionalism: This Act is for strengthening the real estate industry as well as it helps in creating a sense of professionalism.
  6. Defined Carpet Area: Before enacting RERA, the method by which builders calculated the price of the project was not precisely defined. Whereas, RERA has defined the standard formula for calculating the carpet area, to avoid the promoters in providing inflated carpet areas to increase the prices.
  7. Penalty Interest: Prior to RERA, if promoters delay the possession, the interest paid by the builder was much lower than paid by the buyers for delay in payments. This has changed with RERA; now both the parties have to pay the same amount of interest to each other in case of a penalty.
  8. Defect in Title: If buyers discover that there is a defect in the title of the property, at the time of possession, the buyer can claim the compensation, and there will be no limit to the amount to be compensated.
  9. Payment in Advance: As per RERA rules, a builder cannot take more than 10% of the project cost from the buyer as advance fees. This helps the buyer to arrange for the next payment as per the payment schedule discussed between builder and him. It gives time to the buyer for sourcing the funds. 

Real estate (regulation and development) Act, 2016 was implemented for better regulation of the real estate market. It stated that for better governance a real estate act was necessarily dealing with purchase, sale of land further pushing for a transparent dealing in land and other incidental requirements for such transaction between allotter and allottee. The Act specifically mentioned that the person to whom land is been sold should have clear detailed idea about the sanction plan, it was doubtful that person who administer the land as owner through power of attorney may not have the detail of sanction plan as the buyer of the land had or will have, so to make it more transparent it was suggested or is advised by the Act to upload the action plan, sanction plan and all other detail as suggested by the Act on website of the seller for public knowledge. In one of the recent rulings in the year 2018, under Ferani Hotels Pvt. Ltd. v/s The State Information Commissioner Greater Mumbai & Others said that “the fate of purchase of land development and investment is a matter of public knowledge and debate, any judicial pronouncement should squarely weigh full disclosure in this behalf. Further stating the court said any display of the action plan by the signboard or any other as stated in the act would not violate any provision under Right to Privacy, stating further the court stated that such display of information relating to land is not in nature of personal information against which contention can be tenable. It was advised that contrary to making it applicable to display sanction/ layout plan at the site land, to suggest a direction in which such information should be displayed resulting in hampering of any intelligent mischief born in the minds of culprit resulting in violation of the provisions of Act, objective enunciated was to provide a better governance and transparency in dealing and administering the land.

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All About 7/12 Extract

By: admin Property 18 Apr 2019

It is seen that massive list of documents with complicated terms is required for the purchase of properties. 7/12 Extract is one of these documents. This document is precisely needed when a buyer is looking to purchase plots. It is, traditionally called as “Saath Baara Utara” in Maharashtra, which is an extract from the land register of the district, maintained by the revenue department of the government in the state of Maharashtra. It is a document which gives complete information about a particular piece of land. It includes details such as the survey number, area, date from which the current owner's name has registered etc.

Generally, the Tehsildar or any other concerned land authority issues the 7/12 extract. One can pay the official fee to get a copy of the 7/12 extract.

The 7/12 document or ‘Record of Land Rights’ is used for looking up the ownership of ancestral land in a village, this helps in checking past conflicts, or any litigation orders passed affecting the land or any existing litigation. 7/12 extract has a record of all the activities that have been conducted on the land. The record also establishes the identity of the land legally, covering the natural aspects of the surroundings. Whether it is agricultural land, the document also has a history of the crops that were last cultivated in the land.

How to get 7/12 extract?

7/ 12 extract can be obtained by visiting the nearest Tehsildar’s office and applying for the 7/12 document for the particular tenure. It can be obtained from the concerned government’s website. Visit the website and find your desired locality in the district map to view the 7/12 extract. 

You may get the result by following these steps:

  1. By selecting the Taluk and Village details from the corresponding lists.
  2. By selecting any of the following options and entering the essential information and search for the required 7/12 extract details.
  3. Query by Survey No.— If you know the survey number of the property, you can use this option to search for the 7/12 extract.
  4. Query by Name — This option allows you to search for the 7/12 extracts by name
  5. Click on Show 7/12.

The government has introduced two software system E-chavdi and E-mutation to bring clarity to the process of obtaining 7/12 extracts. This software will enable the Talathis to obtain soft copies of the 7/12 extracts.

Maharashtra Land Revenue Code,1966 by Section 148-159 provides for maintaining the Record of Rights in every village. It so governed by the rules made under (Maharashtra Land Revenue Record of Rights and Registers (Preparation and maintenance) Rules 1971, rules – 3, 5,6,7,9 and 29.

The 7/12 extract contains the following information about the land;

- Survey number of land
Area of the land – Fit for cultivation
- Changes in ownership
- Mutation numbers
- Type of land (agricultural or non-agricultural)
- Type of irrigation (irrigated type or rainfed type)
- Details pending loans for buying seeds, pesticides or fertilisers
- Information about the kind of crops planted in the last cultivating season
- Details of pending litigations, if any
- Details of tax paid and unpaid

Uses of 7/12 extract or Saat Baara Utara

The primary uses of 7/12 extract are as follows:
- Proof of Ownership
- Land type & Activities
- Agricultural Information
Property Sale Transaction
- Bank Loan
- Civil Litigation

Note: To learn more about the laws and procedures, you can contact us at Legato app where we help you in connecting with experienced lawyers who can assist you with the documentation and procedural aspects.
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