Sale agreement-change in law

Previously sale agreement was not compulsorily registrable. From 2012, sale agreement must be registered to make it valid.

Various aspects to be scrutinized in Title Deeds

            1. While perusing title deeds care must be taken to know whether the vendor derives absolute title to convey in favour of the intending purchaser.  If the title deeds confer only a life interest or life estate, meaning hereby only a right to enjoy the property till his life time, the vendor cannot transfer absolute title. 

            2. It should be found out whether the title deed stipulates any condition to the intending vendor to derive absolute title to the property.  If there are such conditions the same would be a bar to derive title to the  property unless the conditions are fulfilled.

            3.It is absolutely necessary that the vendor should have derived absolute rights to encumber and alienate the property before professing that he is the absolute owner.  In order to transfer such absolute rights to encumber and alienate the following terms are usually used in a title deed “The purchaser, his heirs, executors and administrators hence forth can enjoy the schedule mentioned property with absolute rights of encumbrance and alienation forever”.

            4. While perusing the title deeds containing the description of properties the following important factors are to be enshrined in the schedule of property:

             I.      Registration District

          II.      Registration Sub District

       III.      Revenue District

       IV.      Name of Taluk

          V.      Name of Town or Village

       VI.      Name of the Street ( If it is house/shop )

    VII.      Door No. ( If it is house/shop )

 VIII.      Survey No.

       IX.      Sub-division No.

          X.      Town Survey No.  ( If the property is situated in Town )

       XI.      Total Extent and the extent actually sold out of the total extent

    XII.      East-West Measurement and the North-South Measurement ( If it is vacant site, house or Shop )

 XIII.      Boundaries on all four sides

 XIV.      Kist Amount ( If it is Land )

    XV.      Market value

 XVI.      If it is a bylane where the property is situated details thereof and also of access

XVII.      Easement of right of way

XVIII.      Well right or share thereof in the well and the baling apparatus like “( Kavalai  and kavalaibari )

 XIX.      Installation of Electric Motor and its horse power E.B. Service connection No. and deposit details.

    XX.      Channel right

 XXI.      Mode of irrigation  ( Like Lake irrigation )

XXII.      Details of trees and plants.

            While purchasing property, the purchaser must demand and obtain the original documents of title.  If the vendor represents that the original title deed was lost the intending purchaser must be very careful because the intending vendor could have created a mortgage by deposit of title deeds under an unregistered memorandum of title. The existence of a mortgage by deposit of title deeds cannot be detected through encumbrance certificate because such a mortgage can be created under an unregistered deed.  Such a lurking danger is there in the case of such representation like loss of the original title deeds.

            There are certain exceptions under which the original title deed cannot be parted by the vendor.  For instance, if the vendor derived title under a registered partition deed and if he is selling a fraction of share of his property he is not expected to part with the original partition deed.  Moreover all the sharers in a partition deed cannot be expected to possess the original because normally the eldest member of the joint family would possess the same. when the vendor sells only a fraction of the whole property which he had purchased under a sale deed, he would not hand over the original sale deed to the purchaser.

            In the above circumstances, xerox copies duly notarized can be kept in the place of the original document of title.  However care must be taken to ascertain about the availability of the original title deed with the vendor.

            In this context, it is pertinent to point out that nowadays, the Registrar Office issues first copy, second copy etc., of the original partition deed containing the original signatures of the parties concerned.  Each copy in engrossed on a Rs.20/- stamp paper and each copy is considered as the original.  This facility helps all the sharers to possess an original partition deed.

POSSESSION OF PROPERTY

            After scrutinizing the title deeds to find out whether the vendor has got title to the property he intends to sell, his possession of the said property is to  be ascertained because he should be in a position to hand over vacant and peaceful possession of the property to the purchaser.  If a person purchases a property from a person who does not possess the property he may derive title but not immediate possession.  Possession is of two kinds:-

(1)   Actual Possession

(2)   Constructive Possession

If the vendor personally enjoys the property like cultivating his land or residing in his house, his possession is said to be actual possession.  Suppose the vendor has leased his property he is in constructive possession of the property.  When a person purchases a site or house, it is always advisable to insist on vacant possession.  For, after purchase he may find it difficult to vacate the lessee or tenant and getting vacant possession through the process of law would be costly and time-consuming.

PATTA AND CHITTA EXTRACT:-

            In order to find out whether the vendor has got possession of a land certain documents like Patta or Chitta extract will have to be scrutinized.  Patta is a document issued be the Revenue Department  after ascertaining the possession of the property by particular person and the pattadhar is presumed to be in possession of the property.  Paat book was given to the holders of lands some time back in 1970’s the revenue department was issuing Patta books in various colours like red, yellow and green.  In 1980’s a scheme called “Updating Registry Scheme” (UDR) was formatted   by the Tamil Nadu Government under which revenue officials conducted a survey and as certained the actual holders of lands to whom Patta under the UDR scheme was granted.  The said scheme was started on 01.06.1979 and terminated on 30.04.1987.  Chitta extract gives particulars like patta number, extent, levy of revenue and patta holders name. Now-a –days such books are not issued.  On the other hand patta is easily obtained on-line by getting a print out of the same on payment of a nominal fee’s which is very useful for the land owners.

Kist (Land revenue):-

            Patta is issued to a person by the revenue authorities main by to fix the person from whom land revenue is to be collected.  On payment of Kist during every Fasli year a receipt is issued by the V.A.O. (Village Administrative Officer).  The Kist receipt would reveal the patta number, the revenue amount collected and also the period (Fasli year) for which the amount is collected.  The Kist  receipt does not disclose the Survey Number of the land but only the Patta Number.  On the contrary Patta would contain Patta Number which comprises the various lands.  Therefore a combined study of Patta or Chitta extract with the Kist receipt would vouch safe for the possession of a particular land.

“A” Register Extracts:-

            “A” register is maintained in respect of lands which reveal the details of the new Survey Number, Old Survey Number classification details like Ryotwari, Dry or Wet, Soil details “Taram, Rate, Extract, Kist and the pattadars name”.  The “A” register extracts is perusal mainly to ascertain the correlation between Old Survey No and New Survey No.  In the remarks columns, it is revealed whether the land in poromboke, Irrigated by well or River, Lake etc.,

“SUB-DIVISION” Extracts

            When a land in a particular Survey Number owned by several peoples, Sub-Divisions are affected and Sub-Division numbers are given in the Patta.  While granting an order for sub-division and insurance of separate patta normally the Tahsildhar or Deputy Tahsildhar passes such Orders under proceedings.

“ FMB ” Extract

            A Revenue  Department prefers and preserves field measurements books revealing the Topography of a land in a particular Survey number with all sub division details.  The various lands and several Survey numbers situated in a village can be seen in a Field Measurement Book ( FMB ).  In the FM Extract for a particular Survey Number.  We can see the various Sub-Divisions, the existence of house, well, foortpath, and cart truck besides the measurement for each sub-divisions.

            In respect of vacant sites situated in Municipal Town Villages, a book called Survey Field Register (SFR), the extracts of which can be obtained from Taluk Office as well as Municipal Office.  In the said extracts would reveal the extent of property old and new Town Survey Numbers and the pattadars name.  The said extracts is usually issued, with the enclosures containing the field sketch.  

WILL:-

            A will bequeathing one’s separate or self-acquired property is also a document of title. During his life time if a person wants to retain his separate or self acquired property and make a device stating as to who should get his property after his demise, he can execute a will. The executant is called the ‘testator’ and the beneficiary is known as ‘legatee’. A will is executed often with a view to avoid disputes after the life time of the testator and also to perpetuate his last wish as to who should get his property after his demise. A will comes into effect only after the life time of the testator and during his life time the testator can deal with his properties as he likes. The residuary property which the testator has not disposed of alone would devolve on the legatee. A testator can change his mind and execute a fresh will. The last will alone would prevail.

                        A will is a document which is not compulsorily registrable. However a registered will would have some sanctity and credibility. What is essential in a will is that it should be attested at least by two persons.

                        While perusing a will as a document of title care must be taken to know whether the legatee gets absolute title or a life estate. If there is a person who gets life estate and another person getting the vested remainder, there is no use of purchasing the property from the life estate holder. So also during the life time of the life estate holder the person who gets the vested remainder cannot sell the property. Suppose the life estate holder and the person who gets the vested remainder (If he or she is a major) join together to sell, they can do so since they jointly get absolute title.

5. Release Deed:-

                        If a property is owned jointly by two or more persons each would have his share. If one sharer should get the shares of other sharers, a release deed could be executed under which the other sharers relinquish or release their shares to one person. Such a release deed is therefore by itself not a document of title. It reveals as to who gets absolute ownership or title of the joint properties or joint family properties. While investigating a release deed care must be taken to find out, how many persons jointly own the property and whether all the other sharers jointly executed the release deed.

 6.Exchange Deed:-

                       

                        For the sake of convenient enjoyment owners of properties exchange their properties. By merely looking into an Exchange Deed we cannot decide whether a person who got the property under the said deed derived title thereto. For, the person who gave in exchange a particular property must be the owner of the said property and his title should be probed.

7. Sale Certificate issued by a Court:-

                        In execution of a money decree the property of the judgment debtor is attached and brought for Court auction sale. The highest bidder gets the property under a sale certificate issued by a competent Court. Such a sale certificate is also a document of title. However there is no covenant of title contained in a sale certificate issued by a Court. When an individual executes a sale deed he gives an assurance that in case of defect in title he would make good the same. Such an assurance is called covenant of title in legal parlance. Such a covenant of title cannot be expected from the Court, which issues the sale certificate.     

                        The sale certificate should have been utilized for taking possession of the property through Court. The possession receipt coupled with the sale certificate must be absolutely necessary for a purchaser to assure himself of title and possession. Of course reasonable enquires must be made by the purchaser about the Judgment Debtor’s ownership of the property sold in Court auction.

                        Such public auctions are held not only by civil Courts, but also by the revenue department, Banks and some other financial Institutions, for recovery of their dues.

Contents of the Tamil book on Legal advice to purchase property by the author

PALANIRAJ LEGAL CONSULTATION

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LEGAL ADVICE TO PURCHASE PROPERTY

Why people opt to purchase immovable properties?

v For their own use and occupation

v To invest in a profitable portfolio as a sort of savings.

                      Whatever be the reason for purchasing property, the purchaser must necessarily know certain fundamental legal aspects. When I say “Legal aspects” don’t be perplexed because the necessary aspects are not complicated to comprehend. They are basic legal aspects which a common man must know. The idea of writing this post is to enlighten a commoner because now-a- days people grope in the dark when they venture to buy a property.

                  There were times when people were under the impression that only rich people could afford to invest in real estate. Now- a- days even middle class people and salaried employees could purchase property because of the availability of bank loans on easy terms. The banks vie with each other to offer lower interest for housing loans and a low slab of EM1. In such circumstances the number of persons who opt of buy properties swells day by day. The banks refer the papers to their panel lawyers for scrutinizing the documents to find out whether the vendor has marketable title to the property or whether the purchaser has acquired a valid and marketable title. The purchaser could offer the property which he opts to purchase as security for the loan.

People would like to purchase

§  A Vacant site

§  A built up house

§  A flat in a multi- storied apartment

What ever may be the kind of property the fundamental legal aspects are common

Documents of Title

                        Only the documents of title would enable a person to sell his property to an intending purchaser. The documents of title could be in any form and the various forms of such title documents are to be an analyzed below:

                        In order to ascertain the origin of title one will have to trace back to certain period of time, say 30 or 40 years. The properties could be acquired either from the government or from an individual. Therefore there would be two major classifications of properties from where the title originated:-

1.      Property owned by the Government

2.      Property owned by individuals

Property owned by Government

                  Broadly speaking the properties owned by the Government can be classified as:

a)     Porampoke properties

b)     Natham property

                      Whenever the Government thinks fit to confer title on a deserving person in respect of Government property an order of assignment of the particular property is issued to the beneficiary. Such an order of assignment is a document of title which confers title to the beneficiary because the paramount title holder namely the Government issues the order. For instance a landless poor who is a dalit is assigned a piece of land by an order of assignment such an assignment order is a document of title. In the case of a natham belonging to the Government, patta is issued to a house less poor and the grant of such patta is a document of title. Normally patta is considered only as document of possession. That is common law but the exception is the grant of “Manaivari patta”. Therefore the original assignment order or the natham patta which are considered to be documents of title, must be preserved as title deeds.

                        The Government may be pleased to pass an order of assignment for mainly two reasons:

Ø  Assignment in favour of landless poor

Ø  Assignment in favour of depressed class

                  Whether it is an assignment order in favour the landless poor or a depressed class person the said order is issued subject to certain conditions. Those conditions are specifically mentioned in the order itself and the violation of the same would enable the Government to cancel the patta and take back the property from the possession of the assignee. For example, when a land is assigned to a landless poor normally a condition is stipulated directing the assignee to bring the land under cultivation with in certain period of time

D C LAND

                  In the case of land assigned to depressed class person such land is popularly known as “DC land”. In the assignment order issued to a DC person the normal condition imposed is not to alienate or to encumber the land with in certain period with out obtaining the prior permission of the Revenue Divisional officer in writing. Another important condition imposed in the assignment in favour of DC is that the beneficiary should not transfer his title to a non depressed class person.

                         Therefore there is a great risk involved in the purchase of lands which were assigned by the Government. The intending purchaser must demand the original order of assignment and he should also look in to the various conditions imposed in the order and also ascertain whether those conditions were not violated. In case of purchase of a DC land by a non- DC person the purchaser is running a risk of the assignment being cancelled.

                                                                                                      

Natham patta:-

                        Natham porampoke is another classification done by the revenue department. The word “Natham” would mean a high land which is suitable for constructing house. The Revenue Department issues a patta called “Natham patta” or “Manaivari Patta” on two grounds:

1.      Poor people who do not own a house site.

2.      A poor person who is in long possession and enjoyment of a site by putting up a hut or some temporary structure.

                              Natham pattas are issued to deserving persons after proper scrutiny of the suitable beneficiaries. The authority who signs such natham pattas under Natham settlement survey scheme is a Special Tahsildar. The other kinds of Natham pattas are signed by the regular Tahsildar or the Deputy Tahsildar.

Manyam or Inam Lands:

                        The word ‘Manyam’ is a Sanskrit term while ‘Inam’ is an Arabic word and both would mean gift. Prior to the English rule, certain kings, and chieftains and during mogul rule Nawabs gifted certain lands and they were popularly known as manyam or Inam. In olden days the king gifted lands to Village Administrative Employees like maniam and karanam and also in recognition of services rendered by carpenters, blacksmith, potter Barber and Dobby. Those gifts are called service manyams. The lands gifted to temples are called Devadhayam and Kattalai.  Such gifts were made by kings and ministers in the form of Sasanas The copper plates containing such sasanas are found though rarely even nowadays. In certain temples and mutts the sasanas are enshrined on stone slabs, which are known as ‘Sila Sasana’. In mugal period the Inams given were called ‘Jahirs’.

Rayathwari Patta :       

                        In olden days certain manyams called ‘Surotriyams ‘Agraharam’ Zaminthari’ were in vogue. All the Inam lands including minor imams were abolished by the advent of Inam Abolition Acts. After abolishing the imams regularization was done. By competent authorities under Rayathwari pattas were issued in favour of those who were in actual possession and enjoyment of
Inam lands. Such  rayathwari pattas are also exceptional in character in as much as they are considered as documents of title.

Properties owned by Individuals:

                        In respect of land under a valid document of title an individual derives title to immovable property. The vendors who offer to sell a particular property should produce the deed under which he had derived title. The different categories of title deeds under which an individual derives title are enlisted hereunder.

1. Sale Deed:-

                           The common mode of getting title to an immovable property is by purchasing a property under a sale deed. When a person pays sale consideration (Price) and purchases immovable property worth Rs. 100/- and more would do so by getting a sale deed duly executed and registered by his vendor.

2. Gift Deed (or) Settlement Deed.

            Title would pass under a Gift deed when a person executes a gift deed. The executant  is called “Donor” and the beneficiary is called ‘Donee.’ A father, who wants to benefit his son (or) daughter, executes a gift deed with out receiving any cash consideration and such a deed is called settlement deed in the ordinary parlance. Out of love and affection such settlement deed is executed. The stamp duty is considerably less for the settlement deed than that of the sale deed.  However there is a restriction for execution of a settlement deed. The Donor cannot execute a settlement in respect of joint family property. Only the separate property (or) self acquitted property of the Donor could be gifted.  

                        While scrutinizing settlement deeds care must be taken to find out whether an absolute right and title was conveyed to the Donee (or) only a life interest was given by the Donor. If life interest is conferred under the settlement deed, the Donee cannot have any right of alienation and he/she cannot confer title during his life time. Only the person who gets the vested remainder could alienate the property after the life time of the life-estate-holder. If the person who gets vested remainder is certain, he/she along with the life-estate-holder could alienate. If an absolute title is given to the Donee, he could alienate the property which he got under a settlement deed.

                         There is yet another important aspect which should be borne in mind while scrutinizing the settlement deeds. That relates to the power of revocation. Ordinarily a settlement deed is irrevocable unless the power of revocation is reserved. The words commonly used in the settlement deeds read as follows:-

“The Donor has no right to revoke the settlement and even if he revokes it would not be valid”. In such a case the settlement becomes irrevocable. The power of revocation must necessarily be reserved by the Donor incorporating recitals specifically mentioning such a power of revocation.

                As already stated a member of a joint family (Coparcener) does not have power to gift his share of property. There is one exception in Hindu Law which enables the kartha (Manager) of a joint family to execute a settlement deed in favour of a daughter, which is gifting a small portion of the joint family property on the eve of her marriage.

3. Partition Deed:-   

(a) Partition Deed in the case of joint family properties:-

       A Hindu joint family may possess joint family properties. Two or more persons may jointly own some properties by joint purchase. The members of Hindu undivided family or joint owners, as the case may be, could get their share divided in two ways. One is by executing a registered deed of partition and allotting the share of each member under various schedules. Another mode of division is by filing a suit for partition and getting a decree through a suit in a competent Civil Court. In such cases a preliminary decree is passed by the Court at the first instance deciding the share fraction due to each sharer. It is followed by a Final Decree passed allotting specific properties to each sharer. A Final Decree is the document of title in respect of each sharer of a joint family or joint owners like the registered partition deed which is a similar title deed.

      When a partition deed or Final Decree is perused care must be taken to find out whether an absolute right and interest is conferred to a sharer or only a life interest is given. Only when absolute right and title is conferred the sharer gets salable interest.    

            In law, Partition can be orally effected between joint owners or joint family members. But it is difficult to prove the fact of oral partition. If oral partition is followed by mutation proceedings like sub-division and grant of separate patta and consequent acts of ownership by various sharers, like mortgaging their shares, there is a presumption that the properties were orally partitioned.

            In certain cases unregistered partition deeds, like ‘kurchit,’ are executed. An unregistered partition deed under which partition is effected is inadmissible in evidence for want of registration. Suppose a partition is orally effected and after some time a memo of partition recording the allotment of shares to various sharers is executed with a view to keep in memory the allotment of shares then the said memorandum is admissible, not as a document of partition but as a piece of evidence to prove partition.

Legal consultation- particularly real estate matters

Senior Lawyer practicing on civil side for 44 years. Author of the best seller in Tamil on Legal advice to purchase property and also author of another famous book in Tamil on Women's Legislation.

a book on legal advice to purchase property

bpraj237@gmail.com

This is a Tamil book written by me on legal advice to purchase property.It is a best seller in the market in the sense I am now publishing the fifth edition.It deals about documents a purchaser must look into before purchasing a property in a simple way without baffling the reader by using legal words and quoting Acts and sections.   

Palaniraj- creating legal awareness on real estate matters and matrimonial issues.

Senior lawyer practicing on civil side for 44 years. Author of the best seller in Tamil on Legal Advice to purchase property and also author of a Tamil book on Women's Legislation.