The
Initial steps towards property purchase are the scrutiny of title deeds of the
property, and this is the first and foremost exercise the purchaser’s advocate
has to undertake before entering into an agreement with the seller.
A
clean and marketable title, free from all doubts and encumbrances vested with
physical possession, is very important. The ownership of the titleholder can be
traced from the title deeds and revenue records.
It
is the duty and responsibility of the purchaser’s advocate to safeguard the
interest of his client.The advocate shall thoroughly scrutinize the marketable
title of the property and genuineness of the documents. The advocate should
also amount of risk involved in the transaction and guide them on the mode of
payment to be adopted.
Origin
of the Property:
The
origin of the property is very important to trace the title of the property. It
is otherwise called “Root of Title”. It is the safest way to determine the
origin of the property and trace its marketable title. Documents covering a
minimum period of 43 years of Adverse Possession against individuals or
Conflicting Claims against individuals, documents
covering a minimum period of 30 years must be checked. If a person is enjoying the property for more than 30 years, he will get title by adverse interest
against the government as per the Limitation Act. Also as per Section 90 of the
Indian Evidence Act 1872, a document executed 30 years fore is presumed to be
valid.
Subsequent
Transferors:
After
ascertaining the origin of the property, it should be followed up by methodical
examination of events and further transaction, if any, in an uninterrupted and
sequential manner, involving the previous owners and the present owner of the
property.Here, the purchaser’s advocate has to very carefully look into all
aspects from various legal angles as to how the property was transferred from
the previous owners to the present owner.
Such a transfer may be by possession,
inheritance, settlement, will, sale, mortgage, release, gift etc.,involving
such intermediate parties. For supporting such a transaction, the advocate has
to carefully examine the title deeds and other supporting documents like revenue
documents and other records. Also verification of identities of the names of parties and their family connection, wherever they are relevant, and proceeding
if any, involving the parties before any Court of Law,other legal forums and
authorities including revenue authorities, must be done.
Statutory
Clearance:
The
nature of various statutory clearances obtained from the relevant authorities
like revenue, land reforms, income tax, etc., equipped for completing the
transaction must be informed to the parties. In case of purchase of
agricultural land, various clearances must be obtained before executing the
Deed of Conveyance.
Present
Status:
The
“Present status” of the property is the most important point to be examined.The advocate has to fined out who is the present owner, origin of the property,
what title deeds and supporting documents he is holding, is it his ancestral
property or self acquired property and who are his legal heirs, if the legal
heirs are majors in age, the vendor must ensure their presence while executing
the Deed of Conveyance.If they are minors in age, the vendor has to get the
permission from the court before executing the Deed of Conveyance. In somecases the vendor may conceal the fact of legal heirs. To find out the truth,
the advocate must ask the vendor to produce either the succession certificate
or the family genealogical tree issued by the revenue authority. If necessary
he must see the family ration card for further clarification.
The
advocate must find out in whose name the Khata stands, whether the khathedar
possesses up-to-date tax paid receipt in his name and up-to-date Encumbrance
Certificate to establish his right, title and interest in the property. The
advocate has to check the Encumbrance Certificate covering a relevant period,
generally above 12 years upto 43 years from which it would be known what kind
of charge has been created on the property and whether such an encumbrance is
subsisting or not. Municipal and other revenue authorities too maintain records
as to who is in possession of the property, what is the amount of tax payable
on the property and upto what period tax has been paid. All this can be learnt
from these records.“Present Status” is an important factor to establish
property’s present ownership.
Genuineness
of documents:
After
thoroughly scrutinizing the documents, the purchaser or his advocate has to
check up all documents for legality with the concerned departments just to
ensure that the documents are genuine; that they originated from the departments
and that they are not fake ones. In addition the advocate has to find out from
the department whether there is any attestation, notification or proceedings
against the present owner. In case of buildings it must be ensured that it has
not been served with a demolition notice.
Identity
of the property:
The
identity of the property must be checked on the spot. Measurements mentioned in
the documents must tally with actual physical measurement of the land available
on the property.It must also be ensured that there is no encroachment on the
property. In case of encroachment, the measurement of the available land must
be recorded and this must be mentioned in the Deed of Conveyance. The boundaries in the schedule surrounding the property must be checked physically.
Also, the purchaser may make enquiries tactfully with the adjacent property
owners about the ownership of the property he is proposing to buy.
Paper
Notification:
Though
paper notification is optional, it is always advisable to notify in a leading
local newspaper about the buyer’s intention to purchase the property. This is
done to safeguard the interest of the purchaser. Even after examining the
various documents, the Advocate may not be able to find out whether the
property is truly free from any claim or not. A paper notification will beget
response from a genuine claimant. Therefore, paper notification is the best way
to avoid legal problems for the purchaser at a later date.
Physical
Possession:
In case of a vacant site, the purchaser may, with the permission
of the vendor fence the property with barbed wire or he may construct a
compound wall and put a signboard, if necessary, to intimate the ownership of
the property.Verification of title is very important. It is not merely tracing the title on the record
but also examination of the genuineness of the records, identification of the
property, notification in a newspaper and physical possession of the title of
the property.
Even
after entering into an “Agreement to Sell”, the purchaser continues to make
enquiries about the title. A doubtful title cannot be forced upon the
purchaser. Purchaser is not bound to complete the sale if there are defects in
the property, material or latent, which are not discernible in ordinary course.
A mere suspicion of fraud that cannot be made out will not make the title
doubtful and the purchaser cannot reject the title.
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