AGREEMENTS FOR SELLING OF IMMOVABLE PROPERTY

(Advocate S Selvakumar|Property advocates in Bangalore|Property lawyers in Bangalore)

The pre requirement of sale of immovable property is agreement to sell. The agreement to sell contains, terms of sale, consideration, time limit, the complete description of property agreed to be sold, terms of payment, handing over possession and rights of both the parties to enforce the agreement, and penalty for not performing the contract.Generally, the purchaser pays some amount as advance amount, earnest money to seller, which is acknowledged by the seller in the agreement.

Importance of Sale Agreement:

The sale deed is a document, which contains general terms, which are similar in most of the deeds.

But the agreement to sell is a specialised document, which conceptualises the terms of contract.The skill, knowledge, experience of the advocate is reflected in drafting the agreement to sell and the clauses inserted to protect the interest of the purchaser, who has parted with his money.

There is a practise among many to avoid the sale agreements and to go directly for sale deeds.This is very risky. Agreement to sell is required to avail the bank finance.Apart from availing finance without a sale agreement nobody is bound to execute sale deed and convey the property, who may back out at the last moment. Though the purchaser had made all the arrangements for the consideration amount and stamp duty the vendor may back out if he finds another purchaser for better consideration.Likewise, even the purchaser may also back out if he finds similar property for lesser consideration. The sale agreements bind all the parties to perform the contract.

The process of sale is governed by the provisions of Transfer of Property Act. If there is any conditions in agreement to sell which vary from the rights and obligations of the seller, purchaser as detailed in Transfer of Property Act, the terms which are agreed in agreement to sell shall prevail over.If no conditions, are mentioned in agreement, the rights and obligations of seller,purchaser as detailed in Transfer of Property Act comes into force. Having paid the advance amount, (or) earnest money, will the purchaser have any charge, lien over the property for the amounts paid. The Transfer of Property Act governs the rights and obligations of vendor and purchaser.

Rights of Agreement Holder:

In case of sale, the purchaser gets title and ownership to the property only if the transfer is affected in accordance with the law u/s 54 of T.P. Act, dealing with sale of immovable property. Sec 54 of T.P. Act states that – “Sale how made – such transfer in the case of tangible immovable property of the value of one hundred rupees and upwards, --- can be made only be registered instrument.”So registration of the sale deed is mandatory and only thereafter the purchaser gets title. It also states that the agreement to sale itself does not create any interest in or charge on such property. In this kind of situation if the seller refuses to transfer the property under agreement to sale then the questions that arise for consideration are:

-Whether purchaser under agreement to sale is entitled to only damages or else immovable property as per agreement?

-If the purchaser under agreement to sale is in possession of immovable property can he be disposed of immovable property?

So far as first question is concerned Sec 40 of Transfer of Property Act states that “Where a third person is entitled to the benefit of an obligation arising out of contract and annexed to the ownership of immovable property but not amounting to interest therein or easement thereon, such right or obligation may be enforced against a transferee with notice thereof

Ex: – “A Contracts to sell a house to ‘B’ while the contract is still in force he sells the same house to ‘C’ who has notice of the contract.  ‘B’ may enforce the contract against ‘C’ to the same extent as against ‘A’.  From this we find that, the purchaser with notice of a previous contract for sale of the same property is in the eye of the law is a trustee of the prospective purchaser of previous agreement of the property so purchased.Even u/s 91 of the Trusts Act, the title of the subsequent purchaser with notice of the prior agreement is subject to the obligations created by the agreement to sell. So, the agreement holder may proceed against a purchaser of the property who had notice of contract prevailing. Sec 27 (b) of the Specific Relief Act entitles the purchaser under agreement to sell to compel subsequent purchaser to execute a sale deed in his favour. 

In order to have better hold on the property agreed to be purchaser the agreement to sell may be registered, and a paper notification may be released to notify the general public about the agreement.

Purchaser in possession of the property:

For the second question as said earlier i.e.,if the purchaser under agreement to sale is in possession of the property, can he be dispossessed of the immovable property?

In this regard Sec. 53-A of the T.P, Act 1882, provides that:-

1. The transferor i.e., seller has agreed to sell for consideration any immovable property.   
2. Such agreement is in writing and signed by him.
3. The contract provides for taking possession of the property before execution and registration of sale deed.
4. In part performance of the contract, the seller has put the purchaser in possession of the property agreed to be sold.
5. The purchaser under agreement being already in possession continues in possession in part performance of the contract, provided that the purchaser has done some act in furtherance of contract.
6. The purchaser under agreement has performed or is wiling to perform his part of the contract.

Then purchaser under agreement is entitled to protect his possession of immovable property.While agreement of sale is subsisting; some one who purchases the property with notice of prior agreement of sale his right; is subject to such prior agreement to sale.

It is to be noted this benefit can be availed of only by those who were put into possession by virtue of a legal document. A person seeking protection of doctrine of part performance has to prove that he has in part performance of the contract has taken possession of the property and in case he was already in possession he continues to be in such possession in part performance of the contract and had done some act in furtherance of the contract. In addition the purchaser under agreement has to show that he is willing to perform his part of the contract.The only course for seller in such cases is to see for payment of balance consideration.

The maximum stamp duty payable on agreement to sell without possession in Karnataka is Rs.200/- and registration charges are Rs.1,000/-. 

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COMPULSORILY REGISTERABLE PROPERTY DOCUMENTS

(Advocate S Selvakumar|Property advocates in Bangalore|Property lawyers in Bangalore)

Registration of any document acts as notice to the general public.However the registration of all the documents isn't mandatory.The transfers of Property Act 1882, the Indian Registration Act 1902 has created the registration of sure documents mandatory, others nonobligatory.

Section54 of Transfer of Property Act 1882, stipulates that sale of stable property worth of that is 100 rupees or additional ought to be registered.If the worth of stabile property is a smaller amount than 100 rupees, the registration of sale deed isn't obligatory.However this can be for educational interest solely, since, the worth of any stabile property are going to be typically over 100 rupees.Even the worth is a smaller amount than 100 rupees; it's well that the deed be registered.

Section107 of Transfer of Property Act 1882, prescribes that, lease of stabile property “from year to year” or for a term extraordinary one year or reserving a yearly rent should be done solely by registration.The phrase from year to year refers to endless lease from year to year, that is, wherever the owner hasn’t any choice to terminate the lease at the tip of the year suddenly.

 

Similarly the phrase, “reserving yearly rents” implies that the lease has no definite amount, however the annual rent is decided. The word yearly implies that the lease ought to run year once year or a minimum of over a year. In general any lease in far more than year and higher than ought to be registered.

Section17 of Indian Registration Act 1902 deals with the documents that needs registration mandatorily.

1.A document of gift of stabile property: Gift as everyone is aware of, is given in thought heart and affection and no financial thought is concerned. Therefore any gift deed regardless of the worth of the talented property desires registration.

2.All non-testamentary documents:

a)Which produce interest, right, title in stabile property the worth of that is over 100 rupees?

b)Which extinguishes(cancels) any right, interest title within the stabile property worth of that is 100 rupees or additional for gift or future?

c)Which declare, assign, limit or limit the interest, title, right in stabile property, worth of that is 100 rupees or more?

3.All non-testamentary documents that acknowledge the receipt or payment of any thought on account of the transactions relating right, title, interest within the stabile property.

4.All non-testamentary documents transferring or assignment any decree or order, award of a court, that have an effect on the interest, rights and title in an exceedingly stabile property the worth of that is 100 rupees and higher than.

The documents could produce, extinguish, assign, declare, limit or limit the interest, right title within the stabile property for the current or for future, however if the worth of such stabile property is 100 rupees or additional, the deed ought to be registered.

Though all kinds of mortgages desires registrations, the mortgages created by depositing of title deeds, known as just mortgage, isn't mandatorily registerable. Mostly, banks and money establishments use this mode of mortgages. But note of deposit of deed of conveyance ought to be registered

Testamentary suggests that, about the need and non-testamentary suggests that documents not connected with can. The need could be a document that states that World Health Organization has got to succeed to the assets, properties of the person; World Health Organization writes the need (testator) once his death. Can isn't mandatorily registerable, however its well to urge it registered

Indian Registration Act empowers the government to exempt the registration of any document of lease the amount of that doesn't exceed 5 years and annual rent doesn't exceed fifty rupees. 

The necessary purpose is, what's the result, if the document, that is mandatorily registerable, isn't registered, Section49 of Indian Registration Act deals with this example. It states clearly that such non-registered documents don't convey transfer lawfully valid title to the transferee and such documents don't seem to be admitted as proof of any group action touching the property referred within the document. Thus, the customer won't get lawfully valid title by a unregistered sale deed.

However, it conjointly provides associate exception, that such unregistered documents is also received as proof in an exceedingly suit for a selected performance underneath Specific Relief Act or as proof of part performance of the contract as per Section 53A of Transfer of Property Act 1882 or in the other connected group action,not needed to be suffering from a registered instrument.It’s forever well to register any document connected with stabile property because it creates a permanent record, that area unit mirrored in encumbrance certificates. Any such registered documents have higher worth of proof than unregistered documents.

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LITIGATION IN PROPERTY MATTERS

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Scrutiny of property documents could be a terribly technical job that solely consultants within the matter will properly perform. If scrutiny of property documents isn't applied in a very scientific means there's each probability of the customer being treed into proceedings.

The first and foremost issue to be thought-about by a prospective vendee of an immobile property before mop up of any deal is to urge scrutinized the property documents to grasp regarding the marketable title of the property, genuineness of the document, enforceability of the title and whether or not the provisions of the laws, rules and laws of the revenue authorities area unit complied with. Origin of the property, flow of title and gift standing of the property area unit to be verified in a very systematic manner.

On being happy with the title of the property, the customer will enter into an acquisition agreement with the seller. It should be noted that the property transactions aren't dead through oral agreements or understandings. These transactions are executed underwritten documents that need required registration. whereas drafting property documents, be it an acquisition agreement, sale deed, gift deed, deed of conveyance, will, etc., each minute care is to be taken to safeguard the interests of the parties that successively needs considering and coping with the varied aspects of the relate bring out all the relevant data deed no scope for ambiguity resulting in interpretation and disputing. Failure to stick to the current golden principle would result in misunderstanding between the parties. The actual fact that an outsized range of cases regarding property matters area unit filed for judgment of the courts would itself head to show that there's a good scope for improvement within the scrutiny and drafting of property documents.

Disputable problems

Precisely, it's unattainable to flatly state on the kind of disputes that may arise from out of a property dealings - it should relate to the valid title of the seller, time schedule for payment of sale thought, returning possession of the property, non- compliance of the conditions elaborate within the agreement to sell by either of the parties to the dealings, share of a coparcener on partition, interpretation of the recitals of a can, and also the like. Failure on your half to require care of tracing the title of the correctly in a very proper means can result in numerous varieties of proceedings.

When disputes arise, at the primary instance folks resolve their disputes amicably and after they fail to succeed in a well-meaning settlement they knock the doors of the competent court for breakdown the disputes.

Readers might kindly note that once the matter becomes legal, it'll take terribly long amount to urge the disputes resolved by the courts and also the litigant’s area unit typically prevented to agitate the property while not the permission of the involved court once the matter is legal.

There can be totally different form of relief wanted from a court of law. The relief could also be for execution, restraining the alternative party from meddlesome with the peaceful possession and pleasure of the property, compensation for the loss, recovery suits, eviction suits, interpretation of a can, declarative suits, and partition of joint family property then on.

Types of suits / action

When the seller of a property though initially has in agreement to sell his property to the customer at Associate in Nursing in agreement sale thought backs out of his commitment, the customer will file a suit against the seller for execution of the agreement and also the court on being happy along with your claim, as a customer, might adjudicate pass an order for execution of the sale deed in your favor. On failure of the seller to transfer the property in your name despite the court's order, you may file an execution petition. On the premise of the execution petition, the court can take necessary steps to urge the property registered in your name as per court's order.

Declaratory suits

Under bound circumstances, once your title to the property is challenged or found to be uncertain or defective, it's necessary for you to urge Associate order from the court on your title that purpose you'll got to file a declarative suit in a very court of law.

Injunction

Filing suit for enjoinment restraining the alternative party from meddlesome along with your peaceful possession and pleasure of the property could also be necessary once your property is below the threat of interference by some third party.

Partition Suit

Similarly, once you area unit a co-owner of a property and once you want to urge your share within the property to be enjoyed by you one by one and severally, you'll ought to file a suit for partition.

Money Suit

For realization of the money Lent on the protection of Associate in Nursing immobile property by means of mortgage, you'll ought to file a suit for recovery of the money due from the mortgager and on his failure you'll ought to proceed, in line with law, for realization of the money due by marketing the property encumbered.

Disputes before quasi-judicial authorities

Different types of litigations regarding the land revenue, land acquisitions, title documents etc., and area unit detected and disposed of by many similar judicial authorities like Tahsildars, Assistant Commissioners, Deputy Commissioners, Survey Settlement Commissioners. Therefore, data of authority of those officers would assist you lots in your property matters.

Disputes regarding revenue enhancement and below valuation

District registrars of Registration and also the military officer of Registration adjudicate the disputes regarding the revenue enhancement owed and below valuation of property. just in case you've got any grievance with respect to the valuation and also the payment of revenue enhancement on your property transfer, you'll approach these authorities for remedy to your grievance.

Landlord and Tenant disputes

In respect of disputes between the owner and tenant falling inside the jurisdiction of the Rent Controller, you'll ought to file petition solely before the Rent Controller for relief. The disputes might relate to non-payment of rent, sweetening of rent, fixation of honest rent, eviction of the tenant, etc.

Criminal cases

To initiate reason behind action for forgery and fraud in property transactions, you'll ought to file at the primary instance a police grievance or file a grievance before the jurist. Criminal courts have a unique structure and if you lodge a grievance, the State can prosecute the matter. In criminal matters, there's no suit valuation.

Writ jurisdiction

You may invoke legal document jurisdiction against the selections of the govt. poignant your property rights by filing writ petition within the involved judicature or within the Supreme Court for applicable relief.

The type of legal remedy explained higher than is barely illustrative and not thorough.Additionally to those remedies, there area unit alternative relief/remedies on the market to a celebration. The relief is to be wanted from a court of competent jurisdiction and for this purpose having data of the jurisdiction of varied courts is important. An experienced advocate coping with property matters may render terribly helpful service within the matter who might guide you properly and defend you from superfluous litigations.

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LAW SAFEGUARDS THE MINOR’S PROPERTY RIGHTS

(Advocate S Selvakumar|Property advocates in Bangalore|Property lawyers in Bangalore)

A minor is wrongfully isn't eligible to enter into any contract, nor will he sell or purchase unmovable property. Minor’s square measure mentally and physically unable to manage their properties that they will acquire by manner of inheritance, gift or settlement. He must be depicted by another one that may be a major. So, many of us use power of lawyer to influence the property of minor, that isn't correct. In infancy they need care, thenceforth correct education. There square measure laws that governs the rights of the minors, and conjointly duties, responsibilities and rights of the one that takes care of them.

Hindu Minority and Guardianship Act 1956 (Act thirty two of 1956) is one such legislation that is applicable to all or any Hindus. It’s worthy to deliberate who may be a Hindu as per the provisions of the Act. It should be usually aforementioned all persons aside from Mohammedans,Christians and Jews square measure Hindus. In line with the definition someone is taken into account as Hindu by faith in any of its forms or developments together with Veerashiva, Lingayat, followers of Brahmo, Prarthana or Arya Samaj, Buddhists, religious belief and Sikh.

Minor

Minor may be a one that has not completed eighteen years aged. It ought to be rigorously browsed and understood, that someone are going to be minor till he completes eighteen years aged. Someone who completes seventeen years and enters eighteenth year may be a minor. Even someone who has completed seventeen years and 364 days may be a minor. Someone attains majority on completion of eighteen years aged and enters nineteenth year, that when eighteenth birthday as per English calendar.

Guardian

Guardian may be a one that may be a major and having the care of the minor, or minor’s property or each. There square measure four forms of guardians; (1) Natural Guardian (2) Guardian appointed by a can of natural Guardian (3) A Guardian appointed or declared by Court (4) someone authorized to act as guardian by or beneath any enactment about any court of wards.

Natural guardians – oldsters square measure the natural guardians who beware of the minor youngsters. Father is that the natural guardian of a boy or single woman and within the absence of father; the mother is that the natural guardian. However just in case of a child who has not completed 5 years aged mother is that the natural guardian. Just in case of an illegitimate boy or illegitimate single minor woman, the mother would be the natural guardian and therefore the father.

In case of married minor mother,father would be the natural guardian. it should be usually questioned on the availability for minor single woman, because the wedding of a minor is an offence. Although the law prohibits child marriage, still it's practiced as a custom.Any offence invitations penalty/punishment solely, however a minor married woman cannot be left to argue herself. The guardian of Hindu minor is entitled to require care of minor’s property except minor’s share in joint family property. Kartha is entitled to the care of a minor’s share in joint family property. The natural guardian ceases to be the guardian if he converts from Hindu faith or becomes ascetic (Hermit mendicant, Vanaprastha.

The expressions father and mother doesn't embody step-father or step-mother. Just in case of adopted son, the natural guardian is that the adoptive father and there when the adoptive mother.

Powers of Natural Guardian

Section eight of the Hindu Minority and Guardianship Act defines the powers of a natural guardian. The natural guardian of a Hindu minor has powers to try to all acts, that square measure necessary and cheap for the good thing about minor and realization or protection of minor’s estate/property. However, there square measure restrictions on his power that square measure obligatory by the Act. The natural guardian needs previous permission of the court just in case of mortgage, charging, transferring the property by sale, gift and exchange or by the other mode.

In case of leasing conjointly, he cannot lease the property on the far side 5 years or a term extending quite one year on the far side the date on that minor attains majority while not previous permission of the court. Therefore the natural guardian will lease the property of minor for a most amount of 5 years provided the minor don't attain majority throughout the lease amount. Just in case of a minor WHO has completed thirteen years aged, the property could also be chartered for 5 years. just in case of minor WHO has completed seventeen years aged, the property could also be chartered  for two years solely in order that lease would expire among one year when the minor attains majority. Any transfer of property while not the previous permission of court may be put aside at the instance of minor or someone claiming beneath him. Such transactions square measure revocable. It’s left to the choice of the minor to agree or to not agree for such transfers while not the previous permission of the court. He may, exercise his choice on attaining majority and among 3 years of coming back to understand of such transfer.

The courts can grant the permission for any disposal of unmovable property or leasing on the far side the amount mentioned higher than by natural guardian solely just in case automatically or for an obvious advantage of minor. The appliance for such permission must be created as per the provisions of the Guardians and Wards Act 1980, (sections twenty nine and 31). The competent court is town Civil Court, District court or a court authorized beneath section 4A of Guardians and Ward Act 1980 that is among the jurisdiction of wherever the unmovable property is settled. There’s a provision for attractiveness.

Testamentary Guardian

Testamentary Guardians mean the persons appointed through can as guardians of minor and his property.They perform once each the natural guardians have expired. 

The father might appoint the other person as guardian by a can, if the mother has expired earlier. Just in case the father appoints a guardian by can even though the mother is alive it's not operative because the mother succeeds as natural guardian. Mother may additionally appoint a guardian by can, who succeeds her. Just in case if she doesn't appoint any guardian by can, the guardian appointed by the father through can succeeds as guardian when the death of the mother. 

A Hindu mother might appoint the other person as guardian. The guardian thus appointed shall act as natural guardian of the minor subject to the restrictions obligatory within the Act and also the can. Just in case of minor being a woman, the powers of the appointed guardian can endways the wedding of minor woman and her husband are going to be the natural guardian thenceforth. Solely one that has earned majority is competent to become a guardian and not another minor.

As explicit earlier, no guardian ought to be appointed for the undivided right within the joint family property of the minor. However, within the territorial supreme court might appoint a guardian for undivided right in joint family property.The court is that the final authority to come to a decision whether or not any guardianship can profit the welfare of the minor or not.

The sale of any property during which minor as interest needs previous permission of the court. If not, such transactions square measure revocable at the instance of minor. Minor might enforce his right to such properties when he attains majority. Intrinsically whereas getting the property of a minor it's vital to implement the permission of the court for such transfer.

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