Vande Matram! Welcome to the series of Transfer of Property Law. Since the civilisation of humans, the concept of property is present and the laws related to it are evolving day by day. Let’s discuss the mode and the test regarding transfer of property.
In the previous blog, we discussed about the definition of transfer of property.
What are the mode and the test regarding transfer of property?
According to section 8 of the Transfer of Property Act 1882 (The Act), by transferring property, transferor transfers all rights in a property. There are various modes of transferring ownership of property: permanently by 1) relinquishment 2) sale 3) gift; and temporarily by way of 4) mortgage 5) lease and.
Sale:
Sale is mode of transfer of property permanently. Under Sec 54, the sale is a transfer of ownership by a deed (sale deed/transfer deed) for a price, paid or promised or part paid and part promised. The sale deed is compulsorily required to be stamped by paying stamp duty and registered before a Sub-Registrar and is for consideration.
When the value of such tangible immovable property is not more than a hundred rupees transfer may be done either by a registered instrument or by delivery of property. On the other hand when the value of such immovable property is more than a hundred rupees then transfer has to be made only by a registered instrument.
Lease:
Lease is mode of transfer of property temporarily. Sec 105 of the Act defines lease as a transfer of the right to enjoy a property, for a certain period, express or implied, in consideration of a price paid or promised, money or any other thing of value, to be rendered periodically or on such occasions.
Duration of a lease for which no period is specified in the contract is for agriculture & manufacturing purpose, is deemed to be a lease for the year to year which can be terminated by either of the parties on giving a six-month notice. For any other purpose, such period is month to month which can also be terminated by either of the parties on fifteen days notice. The contract of lease for a period of the year to year or exceeding one year is to be effected only by a registered instrument.
Main terms related to lease are as follows:
1) Lessor – Lessor means the transferor. (of right to enjoy
property to lessee)
2) Lessee – Lessee means the tranferee.
3) Price – The price in case of lease, means the premium.
4) Rent – Rent in context of lease means money, share,
service or any other thing to be so rendered.
Mortgage:
Mortgage is mode of transfer of property temporarily. Sec 58 of the Act defines Mortgage as the transfer of interest in the specific immovable property by way of a mortgage deed or deposition of title deeds for securing payment of a loan.
Except for the mortgage by deposit of title deeds, all other forms of mortgage must be made through a registered instrument if the sum assured is 100 or more. A simple mortgage is effected only by registered documents even if the sum is less than 100. When registration is necessary it must be in writing, attested by at least two competent persons, signed by mortgagor & registered according to provisions of Registration Act.
Main terms related to mortgage are as follows:
1) Mortgagor – Transferor is called mortgagor in this
transaction.
2) Mortgagee – Transferee is called as Mortgagee.
3) Mortgage Money – Principal money & interest of which
is payment is secured in such transaction.
4) Mortgage Deed – is the instrument by which transaction is effected.
Gift Deed:
Gift deed is mode of transfer of property permanently. Under section 122 of the Act, one can transfer immovable property through registered gift deed. The immoveable property is transferred voluntarily without any consideration.
It is essential that such acceptance by donee must be made during the lifetime of the donor. The gift is void, if the donee dies before acceptance of such gift.
Main terms related to gift deed are:
Donor- (transferor) who transfers such property in gift.
Donee – who accepts or on his behalf accepts such property in gift from donor(transferor).
Relinquishment:
Relinquishment is surrendering inherited or parental rights for another “legal heir”/ “another collateral” in the same property. In simple terms, relinquishment is a family arrangement where one legal heir surrenders his share in the property with or without monetary consideration for another legal heir. It also transfers property permanently.
Thus, sale, gift deed, relinquishment, lease, mortgage are the main modes of transfer of property. If the property involved in such transactions is immovable and having valuation of Rs. 100 or more then such transfer must be effected by registered instrument as provided by the laws.
Thanks for reading till the end. Note down all the important points for your preparation and Best of Luck for your exams! Please share this blog.
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List of references:
Procedure of Transfer of Immovable Property
Modes of transfer of property under Transfer of Property Act, 1882
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