Financial Daily from THE HINDU group of publications
Sunday, Nov 24, 2002
Columns - Know your laws
Transfer of properties The immovables angle
WHAT is the law that governs transfer of immovable property? It is the Transfer of Property Act, an old enactment still in force. Is real estate a transfer of property? Is purchasing an immovable property the same as buying a movable property such as consumer goods?
While purchasing movable properties the consumers generally go by the brand, and are satisfied with the warranty given for a specific period by the seller.
For movable properties, the Sale of Goods Act applies. Further, we have enactments, such as the Consumer Protection Act and MRTP Act, to safeguard the interest of the consumers. For instance, if a refrigerator I purchased does not work properly, I can ask the dealer to repair or replace it.
Also, if the dealer does not comply with my genuine request, I can make a complaint before the appropriate consumer forum for relief.
And after hearing both parties, if my case is proved, the forum will pass an order directing the dealer to rectify the mistake or replace the equipment, and also award compensation for the loss and mental agony that I sustained.
Are there similar provisions in the Transfer of Property Act? What are the precautions to be taken while purchasing house property/lands/flats/etc.?
One has to look into a number of points before venturing to purchase any immovable property. First, the title of the vendor to the property must be scrutinised.
This can be done with the assistance of a competent lawyer who will peruse all the original documents of title.
Care should also be taken to find out whether the original documents have been pledged with any person or bank as collateral for a loan.
In such contingencies, the purchaser should call upon the seller to arrange for inspection of the original documents at the place of the creditor, or wherever the documents are in custody.
The vendor's right to sell the property should be examined in the light of a number of enactments, such as the Succession Act, Land Ceiling Act and the Land Acquisition Act.
If the lawyer is satisfied, then the parties can enter into an agreement of sale. Further, the identity of the vendor should be established.
Now it is mandatory for the vendor and the purchaser to give the PAN number allotted to them by the Income-Tax Department in the sale deed. If the parties to the document have not been allotted any PAN number they should give a declaration in writing to the Sub-Registrar.
Any false declaration, will entail criminal prosecution. The vendor, if not available, can contract to sell by virtue of a power of attorney executed in favour of his agent.
This power deed may be registered or unregistered, as the registration of power of attorney is optional. The purchaser should be satisfied that the power referred to by the agent is still in force, and subsisting on the principal.
The power deed has no validity if the principal is not alive at the time of contract of sale, or at the time of the sale transaction, if no contract has been entered into. The property should be free from all encumbrances and charges.
(To be continued)
(The author is a Chennai-based advocate & notary public.)
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