RESTRICTIONS ON TRANSFER OF PROPERTY

Advocate S Selvakumar|Property advocates in Bangalore|Property lawyers in Bangalore

The ownership of immovable property is classified into freehold and leasehold. Freehold rights would provide the owner an absolute ownership of such property. This means that the owner has full freedom to deal with the property as he likes without any restrictions. Under leasehold right, the lessee does not get any right of ownership, but only a right of possession and enjoyment subject to the restrictions imposed by the lessor.The three important rights enjoyed by the owner of property are:

1) Right to use

2) Right to destroy and

3) Right to transfer

No Fundamental Right:

The important right is the right to transfer. It may be noted that this right to transfer is not an absolute right, but it is subject to the restrictions imposed by the law. In this regard the first and foremost important restriction flows from the Constitution of India.Before the 44th amendment to the Indian Constitution, Right to property was  a fundamental right u/a 31 dealing with Right to own property and u/a 19(1)(f) dealing with Right to dispose and enjoy property.These two rights were protected by Art 13 (1) (2) in the Indian Constitution,whichprovided that any law including rules,regulations, notifications, ordinance etc. to the extent they violate fundamental rights are void.

This protection has come to an end by the 44th Amendment,deleting Right to property in the chapter of Fundamental rights and placing it in the ordinary rights chapter i.e. Art 300 A.Thus, the right to property, more so of immovable property, is no more a fundamental right. 

Various States have enacted laws, imposing restrictions on the rights of the owner of the property.The Government of Karnataka has prescribed certain ceiling on holding of the agricultural property by persons, companies, societies etc. under the Karnataka Land Reforms Act, 1961.The limit prescribed depends upon the type of land. If the holdings are in excess of prescribed limits, the excess of the holdings will vest with the Government of Karnataka.The Karnataka Land Reforms Act generally prohibits transfer of agricultural property to non-agriculturists and persons having source of income more than Rs.2lakhs(average for last 5 year income) from non-agricultural sources. agricultural property cannot be transferred to non-agriculturists, Karnataka Land Revenue Act provides for conversion of agricultural land to non agricultural land and such converted land can be transferred to non-agriculturists. 

Land Acquisition:

There is another important legislation i.e., Land Acquisition Act, 1898, which provides for acquisition of property for public purpose. Once the Government issues preliminary notification for the acquisition of such land,whether agricultural or non-agricultural,such property cannot be transferred to any other person.Here again,authorities competent to acquire property are the Central or State Government and other Government agencies like BDA, KIADB, KHB etc.

Zonal Regulation:

The Comprehensive Development Plan has categorized the areas into various zones like residential, commercial,industrial, green belt area etc., and has also prescribed the various activities which can be carried on in such zones. Permission from planning authorities is required for any change in the land use. In green belt area, only agricultural and allied activities are permitted.

Property law

PTCL Act:

The important social welfare Act with regard to Transfer of property is “The Karnataka SC & ST (PTCL) Act, 1978. The preamble of the Act provides that “An Act to provide for the prohibition of transfer of certain lands granted by the government to persons belonging to the scheduled castes and scheduled tribes in the state, which means any land granted to the landless agricultural laborers belonging to scheduled castes and scheduled tribes cannot be purchased without the permission of the Government. Anyone who purchases such a property will not get clear and marketable title; such property will be eventually acquired by Government and returned to the original owner without any compensation to the purchaser.”

These restrictions on the transfer of property are social in nature i.e., to give effect to the importance of Directive Principles of State policy provided u/a 39(b) & 48A of the Indian Constitution Art 39(b) of the Indian Constitution provides that:

1)The ownership and control of the material resources of the community are so distributed as best to sub-serve the common good.  

2)Article 48 A in the Indian Constitution provides that the state shall endeavor to protect and improve the environment and to safeguard the forests and wildlife of the country. 

Transfer of Property Act :

In the Transfer of Property Act, there are certain restrictions on the transfer of property. The purpose of imposing restrictions on transfer of property in the Transfer of Property Act, 1882 is to protect the interests of creditors and persons having better title to the property and to prevent property being removed from trade and commerce.

There are two kinds of restrictions on the transfer of property.They are:

(1) Restrictions to protect the society as a whole,

(2) Restrictions to protect the interest of transferor creditors and people having better title. 

According to sec.5, transfer of property could be affected only between living persons and hence no property can be transferred to an unborn person. However, Sec 13 provides for transfer of property to any living person to be held for the benefit of such unborn person.

Sec. 10 in the T.P. Act provides that any condition imposed by the Transferor to the Transferee absolutely from parting with or disposing of his interest in the property is void.This provision facilitates transfer of property by transfer without any restrictions.However, the Act allows temporary restrictions. Various development authorities and societies restrict alienation for some period. This freedom of transferee can be curtailed in case of lease for the benefit of lessor, property transferred to woman, for the benefit of woman not being a Hindu, Mohammedan or Buddhist, so that she shall not have power during her marriage to transfer or charge the same or her beneficial interest thereon.

Sec. 52 – Doctrine of Lispendens, which provides that if any suit relating to immovable property is pending in a competent court of law and during such pendency, if property is transferred, such transfer is subject to decision given by the court.

Sec. 53 deals with fraudulent transfer. It prohibits transfer of property if the purpose and intention behind such transfer is to defraud or delay payment to the creditors of the transferor.

The other restrictions are:Occupant of land under Karnataka Land Reforms Act, 1961 [Sec. 48], Grantee of land under Karnataka Land Reforms Act, 1961 [Sec. 77], Occupancy not transferable without sanction of prescribed authority, Karnataka Land Revenue Act 1964 [Sec. 100].

Purchase of property NRI / POI:

Foreign nationals of non-Indian origin residing outside India cannot purchase any immovable property in India. Persons of Indian origin means persons who held an Indian Passport any time earlier or whose father or grandfather was a citizen of India.

Non-resident Indians can purchase residential and commercial properties without any restriction on ceiling on the number of properties.The only restriction on the non-resident Indians is that they cannot purchase agricultural,farm/plantation property. In this regard non-resident Indians need not have to send any document or statement to Reserve Bank of India, Government of India or to any bank—before, during or after such purchase. This freedom is available to all non-residents who are either citizens of India (i.e., holding Indian Passport) or who are persons of Indian origin.This freedom is available for buying residential or commercial property.

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PUBLIC NOTICE BEFORE PURCHASE OF PROPERTY

Advocate S Selvakumar|Property advocates in Bangalore|Property lawyers in Bangalore

It is not uncommon that we have a tendency to do stumble upon publication of notices in news papers regarding the property transactions. The explanation for such publication is to form proverbial to all or any involved that a specific property is beneath method of purchase by the publicist and to provide a chance to the affected party to lift objections, if any, against such purchase.

For peaceful possession and delight of the correctly the customer needs to excise proper care and diligence to make sure that property purchased by him is free from encumbrances, charge and legal proceeding. Any laxness on the part of customer to once and for all establish on whether or not the seller has sensible and marketable title and also theproperty is free from encumbrance would land the customer in uncalled for litigations however also monetary strain.

Public Notice

At the starting time, it should declare that supply of Public Notice in respect of purchase of an immovable property isn't a statutory demand.There’s no exhausting associated quick rule on the procedure an intending customer needs to adopt to search out whether or not the vender includes a valid and marketable title and therefore the property is free from encumbrance. The charge or encumbrance created beneath an unregistered document on the property can't be discovered from the documents getable from the registering or municipal authorities. Charge created by deposit of title deeds, unfinished charge or transfer of property beneath a can would represent this class. to shield the interests of the customer upon purchase of the property and to avoid litigations, commonly public notices are  taken enter leading and wide circulated news papers notifying the  intention of the customer to get the property in question so the persons who have a unconditional interest within the property may place forth their objections for such  sale supported by  documentary proof. Such  notices are usually revealed forthwith when going in an acquisition agreement with the seller in 2 dailies, one in English language  daily and different in an exceedingly vernacular language daily that have wide circulation within the space wherever property is settled. The notice acts as associate data or data or a caution to all or any the involved to facilitate them to require such steps as are necessary to shield their interest.

A notice shall contain the intention of the purchase, description of the property with boundaries and therefore the reality of execution of the sale agreement, if any. The notice invites the general public having interest within the property to  file objections are received among the stipulated time, the sale method can the proceed with treating the property as unencumbered with a transparent rider clause that objections received when the stipulated time won't be acted upon. The notice should spell enter clear terms the intention of the party with no ambiguity some. 

It is to be notice that supply of Public Notice will at the best be termed as a preventative step since it as no binding force on anyone having  interest within the property to act in an exceedingly explicit manner. The interest party might not act fleetly in terms of the notice associated enforce his right over the property at an opportune time. Further, there is each like hood that the general public Notice could go disregarded by the affected party but, the general public notice would function an intimation to the general public that the customer includes a bon fide interest in  the property and therefore the interest parties,if any,for the aforesaid sale dealings.The customer in his own interest needs to get the objections scrutinized by associate old advocate  having information in property matters so he will avoid the probably litigations and embarrassment at a later when the acquisition.

Section 55(1) of the Transfer of property Act. 1882 makes it necessary that the vendor is guaranteed to divulge heart's contents to the client any material defect within the property or within the seller’s title there to, that the vendor is and therefore the purchase isn't aware and therefore the customer couldn't with care discover such defect, however the vendor for obvious reasons might not really disclose all the defects within the property or within the title. Thus it's advisable that the customer of the property ought to verify and create of all the avenues obtainable to him to search out that the property into consideration is free from  encumbrance and therefore the vender includes a sensible and marketable title.

Deemed Notice

The Transfer of property Act 1882 puts some ones on the acquisition and insure cases the customer its deemed to possess notice of encumbrance, Section three of Transfer of property Act defines Notice? Someone is alleged to possess notice of a reality, once he really is aware of the very fact, or once except for willful self-discipline from a pursuit or search that he need to have created. Or gross negligence, he would have proverbial it. Per clarification I to sec..3 wherever any dealings  relating thus unmovable property is needed by law to be registered and consequently registered, somebody getting such property or any a part of or share or interest within the property shall be deemed to possess notice of such instrument from  the date of registration. The reason. If to sec.3 declared that somebody getting any unmovable property or any share or interest in any such property shall be deemed to possess notice of the title. If any of somebody WHO is for the nonce in possession there from. Further, clarification III to sec.3 states that person shall be deemed to possess had notice of any reality if his agent acquires notice there from while performing on his  behalf within the course of business to that that reality is material so notice can be classified into (1) Actual notice once someone has the information of actual reality, (2) data is obtainable on correct enquiry and search, and (3) Notice to the agent of the customer, wherever the data is given to or received by the agent within the course of his standard duties, whether or not  be communicates it to active  partner of a firm  has impact of notice of the firm.

Purchaser’s Obligation

It is obligatory on the part of the customer to form certain that this vender includes a clear marketable title of the property is free from encumbrance. Most of the encumbrances could also be discovered by verification of records at territorial sub - registrar’s workplace and on verification of the customer to recorded registers of territorial sub-registrar’s workplace. Registration of a document operates as notice as notice and also the possession of the property by someone apart from the vendor also operates as notices. Therefore, it'd be safer that the customer shall visit the property to determine whether or not the property is in possession of the vendor. just in case the property is in possession of someone apart from the seller, It ought to be confirmed whether or not the occupier can vacate the property before registration and therefore the vender has each right to urge the property vacated from its occupants since the particular Relief Act 1963 acknowledges the possession as a notice and there are instances wherever properties are chartered, however lease deeds aren't registered.

Though not a legal demand, Public notice concerning purchase of immovable property would vastly profit the customer since the customer shall come back to applicant over the property into consideration and if any objections to the dealings are received, the customer could request the seller to delineated the problem before finishing the sale dealings or within the different he could cancel the deal.

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RENTAL AGREEMENTS

Advocate S Selvakumar|Property advocates in Bangalore|Property lawyers in Bangalore

It would not be straightforward to unleash the property and be happy from legal proceeding unless there exists a properly written rental agreement. Therefore, it's higher to understand the salient options of the rental agreements before any property is unleash.

Rental agreements within the legal word are referred to as Lease Agreements. The one who transfers the property is named the 'Lessor', and also the one who accepts the transfer of property is named the 'Lessee'.

According to section one hundred and five of the Transfer of Property Act, 1882, a lease of immovable property may be a transfer of the correct to relish such property, created for an exact time, specific or silent, or in sempiternity, in thought of the value paid or secure, or of cash, a share of crops, service or the other factor valuable, to be rendered sporadically or on specific occasions to the transferrer by the transferee, who accepts the transfer on such terms. In short, a lease may be a transfer of a right to relish the property of the lesssor by the tenant for sure time, throughout that amount the tenant is place in possession of the property upon payment of lease cash or rent.

Elements of an honest lease

The essential components of a lease are (1) parties, (2) material, (3) terms of lease (4) thought or rent and (5) length of lease. A lease dealing involves commitment by each property owner and also the tenant that are complimentary to every different - the owner agreeing to unleash hisproperty to the tenant in thought of the latter paying him the rent and also the tenant agreeing to pay to landlord the rent in thought of the owner permitting him to use the chartered premises.A lease is that sort of encumbrance that consists of a right to possession and use of property in hand by another person.It’s the result of separation of possession and possession.

A occupancy is made not solely by an specific contract however conjointly by implication by the conduct of parties. Acceptance of rent by the owner clearly establishes existence of occupancy.A lease of unmovable property could also be established either beneath a registered instrument or beneath an unregistered instrument. However, in cases wherever the lease is from year to year or for any term extraordinary one year or reserving a yearly rent the lease is to be created solely beneath a registered instrument of lease [Sec.107 of T.P.Act] and also the lease agreements for a amount but one year don't need registration.

One Year period

It is a typical apply to terminate the lease agreement at the top of each eleventh month and enter into a recent Lease Agreement since if the rent is paid on yearly basis or if the amount of lease exceeds one year, then it's necessary to register the lease agreement beneath sec.17(d) of the Indian Registration Act, 1908.

Contents

An agreement of lease ought to be written rigorously and properly to guard the rights of each the parties and to avoid any misunderstanding at a later date. It ought to be honest to each the proprietor (landlord) and also the tenant (tenant). It ought to invariably mention the parties name and address, description of the property, length of lease, monthly rent collectible, date of payment of monthly rent; clause for sweetening of rent on renewal of lease, quantity of interest-free refundable deposit, penalty clause just in case of default in payment of rent, liability of the tenant for damages to the property and also the fixtures and fittings, notice amount just in case of premature termination of lease; date of commencement of lease and also the date of expiration of lease; notice amount and manner during which the notice can got to be served etc.

Obligations of the proprietor

The first and foremost duty of the proprietor is to abide by the terms of the lease agreement in letter and spirit and to make sure that the tenant is allowed to relish the chartered  premises while not interference. He shall got to make sure that all the essential and civic amenities square measure provided to the chartered premises. It’s the responsibility of the proprietor to hold out major repairs to the chartered  property to form it livable  and pay municipal and different taxes due on the property. The proprietor ought to make sure that the chartered  premises isn't used for any immoral or unlawful functions nor permit storing of any venturesome and ignitable materials like explosives, etc. proprietor shall issue receipts for the earnest deposit and for the rents received by him in respect of the chartered  property. The proprietor shall refund the protection deposit received from the tenant once the lease has come back to an finish. He shall not below the belt create deductions whereas refunding the protection deposit on grounds of repair to the chartered property. The proprietor is certain to divulge heart's contents to the tenant any material defect in property with respect to its supposed use of that the previous is and latter isn't aware and that the latter couldn't with care discover. The proprietor is additionally certain on the lessee's request to place him in possession of the property.

Obligations of the tenant

During subsistence of the lease, the tenant features a right to relish the chartered premises while not interference from the proprietor or by someone on his behalf. The tenant shall payrto the proprietor the monthly rent for the chartered premises on the in agreement date. He shall conjointly pay the electricity and water bills on or before due dates to the Legal involved authorities and furnish a duplicate of the receipt received by him from such authorities to the proprietor for his records. The tenant shall perpetually keep proprietor educated concerning the additions or alterations that the chartered  premises could need to alter the proprietor to attend to such work. The tenant shall not create any structural alterations to the premises or cause damages to fixtures and fittings throughout the subsistence of the lease. The tenant is beneath a legal obligation to not use the chartered  premises for immoral or criminal functions nor for storing the venturesome and ignitible materials like explosives, etc. The tenant is beneath obligation to use the chartered  premises for self use and to not sub-let a similar unless the lease agreement features a provision for sub-letting. He shall not cause any nuisance to the co-tenants, maintain the premises in a very livable condition, and on completion of the lease amount, get in the chartered  premises to the proprietor while not making any nuisance upon receipt of the earnest deposit. If the proprietor fails to form any repairs, at intervals cheap time when notice, the tenant could create a similar himself and deduct the expense of such repairs with interest from the rent, or otherwise recover it from the proprietor. If the tenant involves apprehend of any recovery proceedings in respect of the chartered property, or of any encroachment, or interference with the lessor's right in respect of the chartered  premises, he's certain to offer notice thence to the proprietor.

General Grievance

The following grievances are usually encountered by the tenant and also the lessor:

Non-refund of deposit

Some lessors (landlords), for obvious reasons, fail to pay back the protection deposit to the lessees (tenants) upon termination of the lease agreement or create unreasonable deductions from the protection deposit. Generally, the landlords who in the main rely on the income and who would have used the protection deposit for his or her personal wants fail to refund the protection deposit as per agreement. Thus, once the tenant problems notice indicating his intention of vacating the chartered  premises or once the lease amount expires, some landlords would begin dodging until they get the protection deposit from another new tenant. it's the common apply that tenants opt to still occupy the chartered  premises until they come back to the protection deposit since they feel that to induce back their deposit from the owner upon vacating the chartered  premises can be a tough task.

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