Useful Tips to Transfer a Property

Useful Tips to Transfer a Property

When we transfer a property, one thing we need to ensure is that the act of transfer is complete. The legal formalities are fulfilled, and the rights and interests are transferred as desired.

Transfer of property 

It is an act by which one person transfers the rights and interests in a property to another. There is a change in ownership. It is done by executing a conveyance deed which may be in the form of:

  • Sale deed
  • Gift
  • Relinquishment deed
  • Will

Each conveyance deed has some legal requirements. It is valid only if the stipulated conditions are fulfilled.

Read: Corona crisis and stay at home – check your property documentation!

The decision to transfer a property needs to be taken prudently, keeping in mind the following tips: 

 Legal Assistance:  

The transfer of ownership involves precise documentation and payment of stamp duty/registration charges. All the documentation part must be handled cautiously. It is advised to take the assistance of legal professionals to avoid issues later. 

Registration of deed:

The registration of transfer deed can be optional or mandatory as per law. If it is compulsory, the deed is valid only if registered. The process of registration helps to:

  • Create evidence of ownership
  • Records the transaction for future references

The registered document of transfer is like a title deed and reflects the ownership.  

Read: Tax Benefits Of Real Estate

Contents of the deed:

The transferor can transfer all the rights or limited rights in the property. The contents of the transfer deed are, therefore, significant. They define the extent and scope of the transfer. 

Market Value of the property:

Let the professionals assess the correct market value of the property. It helps to get the right price for the property in case of sale. The sale price of the property is the primary factor to decide the stamp duty charges. 

Right of the transferor:

The transferee must ensure that the transferor has the right to transfer the property. It is essential if the owner himself is not present to execute the deed. If the transfer is through the power of Attorney, the authority should be clear and unambiguous. 

In case of Joint ownership of the property, it is significant to understand the rights of the co-owners. A co-owner generally executes a relinquishment deed to give up the share. The other co-owners get a right to that share in the property.

Read: Saving yourself from fraud while buying or selling a property

Payment of dues:

The deed must mention whether the transferor or the transferee will pay the dues of the property. All the taxes must necessarily be paid to avoid any legal trouble. 

The motive of the transfer:

The transfer deed is executed as per the purpose of the transfer. A gift deed is executed if the property needs to be transferred to relative out of love and affection. If the property is desired to be transferred as per preferences, executing a Will is the option. The sale deed is a common method to transfer property, but it involves tax payment.

Thus, to transfer property, one must decide wisely after analyzing all available options.

Common frauds in the transfer of properties

Common frauds

Perception is – Where there is property, there is a fraud!  Possibly because, there is a lack of transparency in the processes, and the documentation is not simple. Also, in most cases, there is a casual approach to property management issues.

Here’s a glimpse of what the transfer of property entails, the potential frauds therein, and the solutions

Transfer of Property:

  • The transfer of property is an act by which the owner of the property (transferor) transfers the ownership rights in the property to another person (transferee)
  • Property can be transferred in several ways like Gift, Will (Inheritance), Sale, Partition or Relinquishment of share in case of co-owners.  
  • Property is transferred along with the liabilities attached to it. But it should be with the consent and knowledge of the transferee. E.g. in case of Gift, the donee must accept the gifted property with the liabilities if there are any.
  • There can be some agreement or adjustment between the transferor and the transferee about liabilities. It is generally there in case of inheritance, partition or relinquishment.  

Also Read: Property rights of a son on mother’s self-earned property – Issues and the Law

Fraudulent transfer and frauds:

  • When the transferor transfers the property by concealing the facts of liabilities/defect in property from the transferee intentionally, it is called fraudulent transfer. 

Some of the common frauds committed while transferring the property are:

  1. Fake title: The title deed is fraudulent. The person presenting himself as the owner is not the owner. Property papers are false and forged. The title deed can be any document which depicts the title of the owner in the property. 
  2. Multiple Registrations: The property transferred (sold) has got multiple registrations. The property is sold by the owner to many buyers fraudulently. The owner grabbed the money from all the different buyers and absconded. All the different buyers have to fight legal battle to establish their ownership.
  3.  Pre-mortgaged property: It happens a lot of time that the seller/transferor has already mortgaged the property sold/ transferred with a bank to avail loan against it. Thus the property is not free from encumbrances. The fact is not revealed to the buyer, and the buyer loses his hard-earned money if he purchases the property without exercising due diligence.
  4. Encroached property: The property transferred has been constructed on an encroached land. The actual land belonged to Government or another party, but the person who has sold the property to the buyer never disclosed the same. The transferee has to fight legal battles later.
  5. Permissions not obtained: Properties like those in a Registered Society or Housing Board flats require special approval from the Concerned Authorities before transfer. In some cases, the transfer is not even permissible. But the people manage to defraud the transferee and transfer such properties without obtaining the necessary permission. 
  6. Mismatch of location and area: The fraudsters transfer the property by mentioning the wrong location. The area (measurement) mentioned is also not correct. 
  7. The person not authorized to transfer: (fake GPA or misuse of GPA): A person may transfer the property which he is not authorized to transfer. The power of attorney holder misuses GPA and transfers the property in violation of the terms of the same. Hence he cheats both the actual owner and the transferee. Sometimes the GPA is a fake document.
  8. Encumbrances over the property: There are various kinds of encumbrances affecting the value of the property. These can be in the form of mortgage, lien, litigation (disputed property), unpaid charges (utility charges). The transferor of the property can cheat the transferee by not disclosing the same.

Also Read: The married daughters’ right in mother’s self-acquired property

The way out – Key to avoid the frauds:

  • Be alert
  • Take timely precautions
  • Take proper legal advice
  • Scrutinize the documents

Certain precautions will enable the transferee to avoid suspicious transactions:

  • Demand the original property papers for verification.
  • It is essential to check for the payment of dues. Verify the same from the respective Authorities, e.g. office of Municipal Corporation. It is vital to check if the transferor has paid the dues.
  • Visit the offices of local authorities to check out for the encumbrances on the property. The transferor must clear any loan availed by mortgaging the property.
  • If the Power of Attorney holder transfers the property, it is significant to verify its terms to ensure that there is a right to transfer the property.

Transfer of Property on the basis of Registered or Unregistered Will

Transfer of Property on the basis of Registered or Unregistered Will

Transfer of property means transferring the ownership of the property.  For transfer of the property, one has to establish his claim or has to prove his title. The same can be done through various documents like sale deed, gift deed, Will etc.

Will or no Will

Whenever a person dies, someone has to manage his property and assets. There can be two situations:

1.   The person has died after making a Will

2.   The person has died without any Will (has died intestate)

In the first case, the property gets distributed as per the tenor of the Will.

In the second case, the property gets distributed as per the Law of Succession. The property gets devolved to the legal heirs of the deceased as per personal laws and relevant provisions of statute e.g. the Indian Succession Act, the Hindu Succession Act etc. whichever is applicable.

Registration of Will

As per the Indian Laws, it is mandatory to register the document based on which the immovable property having a value of Rs 100 and above is transferred. If a document which is required to be registered compulsorily has not been registered, the document does not confer any title. It is not admissible in evidence in court.

If the Will is registered, it is better. The registered Will is considered as a genuine one. The testator and the attesting witnesses appear before the Registering Authorities. It helps to ascertain their identities and add to the authenticity of the document.

Process of transferring the property

For transferring the ownership, the relevant papers are submitted to the office of the Sub Registrar.

Documents required are:

  • Will – A Will can be registered or unregistered. If the Will is registered, it is in the safe custody of the Registering Authority. It can also be kept in the safe custody of a banker or a lawyer. In such a case a certified copy of the Will is submitted. If the Will is unregistered, attested copy of the Will is submitted.
  • Probate – Probate can be demanded if it is compulsory or if the Will is not registered. Probate is a certificate from the court certifying that it is the last Will and is genuine. Probate is granted to the executor appointed under a Will. Probate is mandatory in certain States.
  • Succession certificateSuccession certificate is required to access the moveable assets of a deceased person. Even if the Will is there but not registered, the claimant through the Will in some cases, is asked to bring the succession certificate from the court. Succession certificate is generally required for a moveable property like bank account balances, shares, securities etc.

There are certain other documents also which may be required/ demanded by authorities, depending upon the facts of the case.

  • Affidavit from the legal heirs stating no objection to transfer the property to the person named in the Will if all legal heirs are not included in the Will
  • Affidavit of attesting witnesses if the Will is unregistered
  • Affidavit from the beneficiary of the Will to clear all the liabilities related to the property

It is always advisable to draft a valid and proper Will through a lawyer. It is better to get the same registered. It will help the family members later for a smooth transfer of the assets in the name of beneficiaries.

How to file a partition suit for a property in India

how to file a partition suit for a property in india

Partition is a division of property among those who are entitled to the same. In case of property held jointly, if all the co-sharers decide mutually among themselves to divide the property and agree for specific share, there is partition by mutual consent. If there is a dispute, the parties file a suit for partition in a civil court.

Existence of a Right:

A person can claim a share if he has a right in the property. The right can be there:

  • As a legal heir
  • As a co-owner/co-sharer
  • Through any document conferring the share – Will, Gift Deed, Sale deed etc.

When the partition suit is filed, Court may fix an enquiry and appoint a Court Commissioner to ascertain the existence of the right of the party and its share in the suit property.

Read More: Division of property between brother and sister after father’s death

Process of filing a partition suit:

Partition suit is a civil suit, and the process of filing is the same as that of a civil lawsuit.

A. Drafting and filing of plaint – A plaint is nothing but a statement of facts of the case wherein the claimant explains and justifies his claim for the share in the property.

  • A plaint is drafted as per the formats applicable in a particular court. Generally, it is the same everywhere in India with a few differences in presentation.

B. Affixing the appropriate court fee – Requisite court fees must be deposited at the time of filing the plaint. It is essential to submit an accurate court fee. The court fee depends upon :

  • Nature of the case- If the parties are in joint possession of the suit property, the amount of the court fee is fixed. The court fee does not depend upon the market rate. If the party is not in  possession, the court fee is paid on his share as per the market rate.

The court fee structure varies from State to State.

Read More: Division of Property Among Daughters and Daughters-In-Law

C. Placing on record the relevant documents: The party in support of its claim submits the relevant documents. The documents can be-

  • Title deed – It is the primary document which confers the title to justify share in the joint property. It can be in original. If original not available, certified copy can be obtained.
  • Valuation of property- A certificate is issued by the Office of Sub Registrar confirming the value of the property as per the market rate.

Any other document can be filed, which establishes the right in the suit property or which fails the claim of the defendant.

The party filing the suit may or may not possess the original documents. Certified copy of the same can be obtained from the offices of concerned authorities.

Read More: Property rights of a wife after husband’s death

Who can file?

Any or all of the co-owners can file a partition suit. The co-owners can be legal heirs also if it is a family property. Anyone having a share in the property which is intended to be partitioned can file the suit.

Where to file?

A suit for partition is filed in a Civil Court having jurisdiction over the area where the property is located.  If there are several properties, the lawsuit can be filed in any one of the courts.

The partition suit results in a decree which ends the joint nature of the property. Court may order sale of the property and distribution of sale proceeds.

How to save title of your property from illegal occupants?

illegal occupants - adverse possession

An owner of a property is at will to use or not to use his property. However, if there is an intrusion and he does not take any timely action against the intruder, he loses the property. It sounds strange, but this is the law.

Adverse Possession is a legal doctrine that legalises occupation of a trespasser over a property. The claimant gets a right of ownership in the property if the real owner of the said property is sleeping over his right and does not take any action against the intruder (the claimant) who has enjoyed the possession of the said property for a sufficient period.

Read More: Owners need to be careful

In Indian Law, the concept of adverse possession is explained under The Limitation Act, 1963. If the real owner does not claim his right against the intruder within a prescribed time, he loses his right, and the possessor (intruder) gets the ownership right.

Elements of adverse possession: There are certain elements which are necessary to form adverse possession. These are:

1.    Possession must be hostile to the owner:

  • The claimant must possess the property with an intention to acquire the right through adverse possession. It is possession with a declaration of ownership against the original owner.
  • A trespasser can occupy the land even by mistake or inadvertently
  • No adverse possession if the trespasser had the authority to use the property, e.g. a tenant

Read More: Boundary Line Dispute

The possession should not have been obtained by

  • Force
  • Unauthorised means

2.    Period of possession – A claim of ownership through adverse possession can succeed in a private property if the trespasser has possessed the property continuously for 12 years. The period begins from the date the claimant (trespasser) is in adverse possession. For Government properties, the time is 30 years. This period varies in different jurisdictions. The owner has to bring an action within this limitation period.

3.    Possession must be actual, uninterrupted, continuous and exclusive. The claimant must be physically present and using the property. The claimant must be using the property exclusively.

4.    The public at large must be aware of the possession of the claimant. It is not the liability of the claimant to inform the actual owner, but the possession should be open to the extent that the real owner has the means to know that someone is occupying his property.

Read More: When Caretakers Try to become Property Owners

Defenses to Adverse Possession

The real owner can prove the absence of any of the above stated essential elements to defeat the claim of the intruder:

  • The claimant has not possessed the property for requisite duration
  • Use of the property was not uninterrupted and not continuous
  • The property was not being used exclusively by the claimant. The owner was also using the said property
  • The owner has permitted the claimant to use the property. In such a case, possession is not hostile
  • Adverse possession does not help to get the title if the real owner is minor, of unsound mind or in armed forces.
  • Government-owned land is sometimes exempted from adverse possession.

Need to relook: Many legal thinkers have criticised the doctrine of adverse possession as it helps the illegal occupants to get the title because of the inaction of the real owner. There is unjust enrichment. There is a need to relook into this law. Recent court rulings reveal that courts are now making it more robust for the illegal occupants to claim title through adverse possession.

Read: How to file a consumer complaint in the Consumer Forum in India?

Precautions that real owners can take to protect their property: Being vigilant is the key          

  • Regular monitoring of the property – Especially in case of NRIs as they are more prone to losing their property to intruders.
  • Building a fence or wall around the property
  • Placing the signboards for trespassers