The Indian legal system has set the path for transferring property from one entity to another through the Transfer of Property Act. It came into force on 1 July 1882, defining different aspects of living beings and transactions.
So, keep reading this article to know about the transaction it covers, its importance and its duties!
Transfer of Property Act, 1882, also known as TP Act 1882, is legislation that is only applicable when a transaction is taking place between two living entities or inter vivos. According to the law, this can include an organisation, company, or association of individuals that may involve a present or future transfer of the same.
In addition to this, provisions of this law apply to both the transfer of movable and immovable property. However, as per this act, "transfer" specifies actions like an exchange, gift, mortgage, actionable claim, sale, or lease.
The scope of the act with which one can better understand the applicability of this law in a property transfer includes:
In order to understand the scope and importance of the Transfer of Property Act, individuals must understand a few terminologies that hold significant values in the applicability of this law.
In simple terms, movable property refers to all those properties that can be moved from one place to another. Moreover, this movement must not detriment the quality, capacity, and quantity of movable property.
Some of the common examples of movable property are personal belongings, cars, books, grass/crops, etc. The movable properties’ registration is optional under the Indian Registration Act of 1908.
Immovable property refers to those properties that are attached to the earth or to something that is attached to the earth. These properties cannot be moved unless it is destroyed or altered. It is a mandate to register any immovable property under the Indian Registration Act 1908 if a property’s value is more than ₹ 100.
Some significant examples of these property types are real estate, houses, buildings, anything that is attached to the land, property rights, etc.
Some salient features of the TP Act 1882 that one must remember for better implementation of this law are:
According to Section 7, Transfer of Property Act 1882, various provisions have been laid down with respect to the eligibility of transferring properties. This states that:
As per Section 5, a property transfer must inter vivos, which means it must be between living people. Property transfer cannot be said to be viable between two or more non-living entities. Here a living person constitutes individuals, companies, associations, or other bodies, whether under incorporation or not.
Under Section 6, transfer of property is said to be successful when property used for this activity is transferable. As per clauses (a) to (i) of this section, properties with the following characteristics, like its right to sue, right to future maintenance, public offices, prison, political pension, etc., cannot be transferred.
Let's discuss the grounds where a property cannot be transferred:
As per the law, a person who is eligible to sign and enter a contract is competent enough to transfer a property.
The seller’s responsibilities and duties concerning a transfer of immovable property fall into two stages:
Let us understand these different sets of seller’s duties, which are mentioned in this context:
TP Act specifies a comprehensive list of duties or liabilities that is vested with a seller before an immovable property’s sale:
Here are the following duties or responsibilities that a seller must carry out after the transfer of property:
Some significant seller's rights in relation to property transfer are as follows:
As per the governing Act, buyers’ duties divide into two parts which are:
The importance of Transfer of Property Act involves an equal division of rights and duties between a seller and a buyer. Here is a list of duties that a buyer must perform before a transfer:
A few duties a buyer must perform after the transfer of property is:
The two essential buyer’s rights, as mentioned in the act, are:
Section 6, Transfer of Property Act, 1882, specifies the following properties that are not transferable:
The provision and various clauses under the Transfer of Property Act 1882 are essential to understand while carrying on such activities. A better comprehension of the clauses will lead to uninterrupted legal transfers. So, individuals, both sellers and buyers, must abide by the clauses to avoid any litigations.
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Disclaimer: This information is added only for informative purposes and collected from different sources across the Internet. Digit Insurance is not promoting or recommending anything here. Please verify the information before making any decisions.
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