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 (other than
mortgage) 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 some cases 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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