DEED OF COVENANT FOR SHOWING THE DEEDS

Advocate Selvakumar | property advocates in Bangalore | advocates in Bangalore

                                                                        

The transfer of immovable property by way of sales, gift, will, releases etc., presupposes that documents to the title of transferred immovable property are delivered to the transferee on completion of process. This is statutory obligation. Section No. 55(3) of Transfer of Property Act, puts this responsibility on the seller. But the section has a provision, that in case where only a part of the property is sold and the seller retains a part of the property the seller is entitled to retain the original documents, and copies of such documents are delivered to the purchaser.

In case, where the property is transferred to different persons, in different lots, the transferee of greatest portion is entitled to hold the original documents of title and others are provided with copies of such documents.

In the circumstances dealt above, the persons holding the documents, either the seller or one who holds the greatest portion has some responsibilities. He has to keep the documents in safe custody and in good condition. He has to make available the documents for inspection to other buyers, and also furnish the true copies of such documents; extract from such documents, whenever required.

But the cost has to be met by the buyer who needs such inspection or copies, extracts. These responsibilities of person who holds the original property are required to be recorded properly.

The document, which records such obligations of safe keeping the documents; producing them for inspection, providing copies, extracts is called   “Deed of

Covenant for Production of Documents”.

The deed of transfers like sale, gift, will and release may contain such a covenant by the vendor in favour of purchaser or a separate deed may also be executed by the vendor in favour of purchaser (or) after making the same covenants can be incorporated in the sale deed.

In case of the person holding greatest portion, a separate covenant deed about his obligations becomes necessary. A separate deed in favour of each transferee of other portions or a common deed in favour of all other transferees jointly may be executed.

In the deed of transfer of the greatest portion or of higher value an explicit covenant, that, the transferee shall safe keep the documents in good condition, produce for inspection of other transferee and furnish true copies or extract should be included. Similar relevant covenant should also be incorporated in deed of transfer of other transferees.

Generally all the portions of the property are not transferred at the same time, and the above suggested procedure may not be possible. In such cases, the transferor should give a covenant of production of documents in each of the deeds of transfer and it should further provide that if and when the transferor hands over the documents to any other transferee at a later date he would procure a similar condition from the  such transferee. Under a covenant of production of document, the original owner liable indefinitely unless a condition provides that he is no more responsible after he parts with the remaining portion of the property.

Flats are constructed on land and are sold to different purchasers. But the original title deeds for the entire land will be only one and cannot be given to each and every purchaser. Each purchaser will get original sale deed, which is executed in his name and registered. He will get copies of other original documents and not originals. The original title deeds of the land will be in the custody of the Flat Owners Association. The association has the responsibility of maintaining them safely and make available the documents for inspection by the owners and to provide copies, extracts the promoters or builder shall incorporate such clause in individual sale deeds. The articles of the flat owners association shall contain the clauses relating to safe custody, inspection and making available the copies, extracts of the original documents.

Stamp Duty: in case the conditions is including in the transfer deeds itself, no separate stamp duty is payable. If a separate deed is executed, it attracts the stamp duty as that of an agreement depending upon the stamp duty prescribed by the state.

Registration: this deed of covenant does not require the registration, but it is advisable to get it registered.