Notes On Transfer Of Property Act

Even if you are the sole owner of a property, transferring it to another person has tax ramifications because the transaction is likely to generate benefits for the seller. Even if this isn’t the case (as it is in the instance of donating property or transferring rights to another person through a will), the transfer must be performed in accordance with applicable tax regulations. In this post, we’ll look at the Notes on Transfer of Property Act, which lays out the rules for transferring property from one person to another.

Transfer of Property Act,1882

Property is classified into two categories in the Indian legal system: mobile and immovable. The 1882 Transfer of Property Act (ToPA), which took effect on July 1, 1882, governs the transfer of property between living individuals. The ToPA is an extension of the law of contracts that runs parallel to the succession laws. It is one of the oldest statues in the Indian legal system. Knowing the essential components of this Act is critical for those planning to transfer their immovable property.

Who Can Transfer Property Under This Law?

The rules for those who are legally eligible to transfer their property are laid out in Section 7 of the Act.‘Every person skilled to contract and obligated to transferable property, or authorized to dispose of transferable property not his own, is competent to transfer such property, either wholly or in part, unconditionally or object of an agreement, in the situations, to the extent, and in the way, allowed and given a prescription by any law for the time being in force,’ according to the section.

To engage in a contract, a person must be at least 18 years old and of sound mind, according to the Indian Contract Act of 1872.

Property Transfer Through A Verbal Agreement

In the Notes On Transfer Of Property Act, Section 9 stipulates that property transfers can be accomplished with an oral agreement unless the law expressly states that the transaction must be completed through a written agreement. Transfers of immovable property with a value of less than Rs 100 can be conducted using a registered instrument or by handing over the item.

Oral agreements, on the other hand, rarely work, with the exception being property division, where family members might engage in a verbal agreement and split the property for practical purposes. For a property exchange to be legally valid, written agreements are frequently required. This is true for sales, gifts, and leases, among other things.

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Property Transfer To An Unborn Child

A person who wishes to bequeath his or her property to more than one generation must bear the provisions of the Transfer of Property Act in mind. This is necessary in order to avoid legal issues in the future.

The transfer of property directly to an unborn child is illegal under the terms of Sections 13 and 14 of the Transfer of Property Act. To accomplish this, the individual wishing to make the transfer must first make it in the name of someone who is living at the time of the transfer. The property will have to be held in this person’s name until the pregnant kid is born. Essentially, the unborn child’s interest in a property must be preceded by a prior interest.

Seller’s Responsibilities During The Property Transfer Law

Section 54 of the Act talks about the responsibilities of the seller of a property:

1. Any serious flaw in the property must be disclosed to the buyer.
2. To deliver all title documents pertaining to the property to the buyer upon his request for perusal.
3. To respond to all relevant inquiries posed by the buyer about the property or title to the best of his knowledge.
4. When the buyer tenders the property to him for execution at a proper time and place, on payment or tender of the amount payable in respect of the price, he must execute a proper conveyance of the property.
5. Between the date of the contract of sale and the delivery of the property, he must take as much care of the property and any documentation in his possession as an owner of ordinary prudence would.
6. To transfer ownership of the property to the buyer.
7. To pay all public charges and rent owed on the property up to and including the date of the sale.
8. To clear all encumbrances on the property that existed at the time.

Buyer’s Responsibilities During The Property Transfer

1. To reveal to the seller any fact about the property that the buyer is aware of but has reason to believe the seller is unaware of, and that materially raises the value of the investment.
2. To pay the purchase money to the seller when and when the sale is completed.
3. Where the property owner has moved to the buyer, to suffer any loss resulting from the destruction, harm, or fall in the value of the property that was not caused by the seller.
4. Where the property’s title has passed to the buyer, to pay all public charges and rent that may become due on the property, as well as the principal payments due on any encumbrances subject to which the property is sold and any interest that may accrue thereon.