Everyone dreams to own some
shelter of his/her own during his/her life time. But, unless the property purchaser adopts
safeguards while finalizing the deal with the vendor, he/she is most likely to
land in uncalled for litigation, loss of time and money. For peaceful
possession and enjoyment of the property by the purchaser, the property should
have clear marketable title free from encumbrances preferably with vacant
possession.
To know whether the property is
free from litigation and the vendor has a clear and marketable title of the
property, it is necessary to examine the title deeds of the property very
scrupulously. Ownership of the vendor can be traced from the title deeds and
revenue records. Mere tracing of the title on the basis of the records
available would not suffice. Examination
of the genuineness of the records, identification of the property, verifying ofall the original documents with the records of the concerned Governmental authorities, issuing
notification in newspaper and physical possession of the title of the property
are some of the important functions required to be performed while scrutinizing the property documents.
The below mentioned safeguards
may to a certain extent protect the interest of the purchasers:
The first and foremost exercise
the purchaser or his advocate has to undertake before entering into any
agreement with the vendor is to scrutinize the title deeds of the property
under consideration. Since it is the duty and responsibility of the purchaser's
advocate to safeguard the interest of his client, he shall have to minutely
scrutinize the title deeds of the property to ascertain the marketable title
and genuineness of the documents. While so doing, the advocate shall examine
the risk involved in the transaction and guide his client suitably.
Origin of the Property
Tracing of the origin of the
property is a very important step in the scrutiny of property documents. Origin
of the property is also called “Root of Title”. It is the safest way to determine the origin of
the property and trace its marketable title. It is necessary to examine the
title of the property for a minimum period of 42 years. In cases of adverse possession against
individuals or conflicting claims, other than mortgage, documents covering a
minimum period of more than 12 years are necessarily to be checked. As regards the period of limitation against
the Government, documents covering a minimum period of 30 years must be
checked. If a person is enjoying the
property for more than 30 years, he will get title by adverse possession
against the Government under the Limitation Act, 1963. As per Section 90 of the
Indian Evidence Act 1872, the document executed 30 years before is presumed to
be valid. These are all the general
principles. However, the number years referred to above would vary depending
upon the documents made available for scrutiny.
Subsequent Transfers
After ascertaining the origin
of the property, there should be a methodical examination of subsequent events
of transfer and other transactions relating to the property in a sequential
order. Here, the purchaser's advocate has to very carefully look into all
aspects from legal angle as to how the property was transferred from the previous
owners till it reached the hands of the present owner. The transfer may be by
possession, inheritance, settlement, will, sale, mortgage, release, gift etc.
The advocate has to carefully examine these deeds and other supporting
documents like revenue and other property records to get a clear picture as to the
valid marketable title of the vendor. Verification of identity of the parties
and their family connections, ascertainment of existence of any court
litigations / proceedings pending before any court of law or other legal forums or authorities including
revenue authorities in respect of the property under consideration is also
necessary.
Statutory Clearance
All the statutory clearance
required for an effective transfer of the property in favour of the purchaser
must be obtained before executing the Deed of Conveyance. The purchaser must be
apprised of the need of obtaining statutory clearances from various authorities
like revenue, land reforms, income tax, etc., for an effective transfer of the
property in his favour.
Present Status
Present status of the property
is the most important aspect to be looked into before purchasing the
property. The advocate who has experience in property documentation can easily find out as to whether the
present owner has valid and marketable title over the property or not. For this
purpose he shall examine the title deeds and other supporting documents
available with the vendor. At the same time, the advocate shall also find out
as to the existence of the legal heirs of the vendor. If there exists legal heirs and if they are
major in age, the advocate shall ensure
the legal heirs presence while executing the Deed of Conveyance. If they are
minors, the vendor has to get the permission from the court before executing
the Deed of Conveyance.
In some cases the vendor may
conceal the fact of existence of legal heirs. In such cases, the advocate must
ask the vendor to produce either the succession certificate or the family
genealogical tree issued by the revenue authority. If necessary he must see the
family ration card for practical clarification.
The advocate must find out in
whose name the Khatha stands, whether the khathedar possesses up-to-date tax
paid receipt in his name and up-to-date Encumbrance Certificate to establish
his right, title and interest in the property. The advocate has to check the
Encumbrance Certificate covering a relevant period, generally from 12 years upto 43 years to ascertain whether
any charge is created on the property and the type of charge, and whether such
an encumbrance is presently subsisting or not. Municipal and other revenue
authorities too maintain records from which it could be ascertained as to who
is presently in possession of the property
according to their records, what is the amount of tax payable on the property
and upto what period tax has been paid.
Genuineness of documents
After thoroughly scrutinizing the property documents, the purchaser or his advocate has to cross check all
documents furnished by the vendor with the records of the concerned departments
to ensure that the documents produced by the vendor are genuine; that they are
originated from the concerned departments and that they are not fake. In
addition, the advocate has to find out from the department whether there is any
notification or proceedings against the property or the present owner. In the
case of buildings, it must be ensured that demolition notice has not been served
on the vendor.
Identity of the property
The identity of the property is
to be carried out by visiting the spot. The measurement of land mentioned in
the documents must tally with actual physical measurement. It must also be
ensured that there exists no encroachment of the property. In case there exists
encroachment, the measurement of the available land must be recorded and this
must be mentioned in the Deed of Conveyance. The boundaries as shown in the
schedule of the property must be physically verified on the spot. Also, the
purchaser may make enquiries tactfully with the adjacent property owners about
the ownership of the property he is proposing to buy.
Paper Notification
There may be some grey areas in
the property title of the vendor, such as pending litigations, agreements
entered into by the vendor with others,
claims of legal heirs, etc., on account
of which even after examining the various documents, the Advocate may not be
able to find out whether the property is truly and completely free from any claim. Therefore, the paper notification
could help the purchaser to get response from the genuinely affected party
which in turn would help the purchaser to know the clear and marketable title
of the vendor.
Though paper notification is
optional, it is always advisable to notify in a leading local newspaper about
the buyer's intention to purchase a particular property to safeguard the
interest of the purchaser.
Physical Possession
In the case of a vacant site,
the purchaser may, with the permission of the vendor fence the property with
barbed wire or he may construct a compound wall and put a signboard before
purchase of the property to indicate ownership of the property.
After entering into an agreement to sell, the purchaser need not close his eyes shut and proceed to
finalize the deal. Therefore, even after entering into an “Agreement to sell”,
the purchaser must continue to make enquiries to make doubly sure of the valid
and marketable title of the vendor. Upon such enquiries if it is found that
there are defects in the title of the property, which are not discernible in the
ordinary course examination of documents, the purchaser could withdraw from the
transaction even when there exists an agreement to sell. However, a mere
suspicion of fraud that cannot be proved will not make the title doubtful and
the purchaser cannot disapprove the title on that ground.
A reading of the above would go
to show that tracing of title of property is a specialized job. Services of
well experienced advocates in property documentation would immensely help the
purchaser in his peaceful possession and enjoyment of property free from
litigation.
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