Transfer of Property : Applicable Law in India for Real Estate Sale, Purchase, Rent & Mortgage

Introduction

What is the Meaning of Property Transfer?

1. Immovable property: - This concept includes the Land, houses and all the structures that are constructed on the land.
2. Movable property: - This includes the properties like jewellery, FDs, Bank accounts and cash.

Transfer of Property with the Available Modes of Transfer:

1. Who is of the age of majority as stated by the law he is subject to.
2. Who is of sound mind, and
3. Is not disqualified from executing contract by any law

Process Amounting to the Transfer of Property:

• Gift Deed: - As we are all familiar, transferring property ownership by ‘gifting’ the property using a gift deed is used quite commonly in India. Gifting a property should be done out of will without any third-party influence. An acceptance is required by the receiver while the donor is alive. If the individual does not happen while the donor is alive then the gift becomes null and void as stated in Section 122 of the Transfer of Property Act, 1882.

• Sale Deed: - The most used method of property transfer is through a Sale Deed. A sale deed is carried out between two parties known as the seller and buyer, for monetary consideration. The sale is completed once the ownership gets transferred to the new owner, after registration at the office of the Sub-Registrar of Assurances.  
  
  

Acts Not Amounting to Transfer

• Relinquishment Deed: - Under this mode of conveyance, an owner can release all his rights in favour of the other member without consideration. Stamp duty in such scenarios will be applicable on relinquished property and not the whole thing. The fundamental principle here is that no other person except the co-owners can establish this deed. Therefore, there is no conveyance of title to a third party of any kind. but among the co-owners themselves.

• Will: - Will is also an effective medium through which the family property can be secured. But this happens only post the death of the testator and does not require the condition of the juristic person to be present. Post the death of the testator, the legal heir/heirs are supposed to apply to the concerned authorities along with a copy of the death certificate, will, succession certificate completing the allocation process.

• Partition Deed: - This method helps transfer property ownership from one person to another by a Partition Deed when there are jointly owned properties. This helps to divide the property so that each person’s share is determined and partitioned. However, again this is between the co-owners and only the shares get bifurcated, hence, it’s not a transfer.

• Lease or Leave licence: - Although it transfers possession for some time to the lessee or licensee, it’s not transferring the title of the property and the same devolves back on the owner after the expiry of the lease/licence period.
  
  

Principles Guiding the Transfer of Property:

Fundamentals Guiding the Transfer of Property are as under:

1. Transfer to be affected to a living or juristic person: The main criterion for an effective transfer is that there must be a transfer of the property between living or juristic persons. It could be an individual, firm, corporate or association but not partnerships.
2. Transfer through Conveyance: A property can be conveyed in the present or the future.
3. The property must be transferable: Section 6 of Transfer of Property Act, 1882 lists properties that cannot be transferred and if any of the properties fall in that category they cannot be transferred.
4. Transfer of property must be done by a competent person: The property transferred must be affected by a person of sound mind, the person must be a major or he is not a person disqualified by contract law.
5. The transfer should be made in a prescribed form: The sale of intangible property should be in a written format with requisite government fees paid.
6. The rule against perpetuity: Property must be transferred during the lifetime of an individual, as the perpetuity rule cannot be followed.  A property cannot be transferred to an unborn child, and it is necessary to consider that while transferring the interest of the property, the person should be above the age of 18 years.
7. Conditional transfer of property: As we know under Section 25 of the transfer of property Act, 1882, the property may be transferred complying with the condition elaborated. If at all the condition becomes impossible, or it is forbidden by law or if it opposes public policy, such transfer would be accounted as void.