Verification of
title of the property is very important before entering into an agreement for
purchase of any property. 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 which involves scrutiny of title deeds. Clear and marketable title
free from doubts and encumbrances with a right of physical possession of the
vendor is a necessary ingredient for peaceful possession and enjoyment of the
property by the purchaser.
Every purchaser
having paid considerable amount for purchase of immovable property expects a
perfect unencumbered marketable title of the property purchased. But the
seller cannot pass on a better title than what he has and all the defects in
his title will also pass on to the purchaser. Many purchasers do not get the
title of the seller verified by advocates who is having specialised knowledge
and experience on property matters, often rely on real estate agents, middlemen
and assurance of seller and seller's advocates legal opinion. Though they spend
lakhs of rupees on purchase of property, they hesitate to spend a few thousand
rupees on verification of title and later on land in trouble. Some of the
reputed builders refuse to give title papers to the purchaser, dictate the
terms and insist that property be purchased on their own. Advocates certify the
title in just four lines without referring to the devolution of the property.
The vendors / builders also force the purchaser to avail the loan from a
particular new generation bank. Most of the times power of attorney is the only
document which is handed over to the purchaser.
The title
may be freehold
or leasehold. In case of freehold title, the owner has absolute title
without any encumbrance with power to
alienate the property. But in case of leasehold the owner will be different who
had leased the property to the Lessee for certain period and the rights are not
absolute and the lessee will be only in possession of the property for agreed
period. After the lapse of the agreed period, the lessee has to hand over the
vacant possession to the owner. Such person may transfer only leasehold rights
to the purchaser, if the lease document provides for alienation and the
purchaser is bound by terms of lease deed. There are different forms of legal
ownership of the property. Most common mode of ownership is individual
ownership where a single individual owns the property. The following are different types of
ownership:
1. Government lands either Central or State.
2.
Individual ownership.
3.
Hindu undivided or joint family ownership
of property.
4. Property owned by a Private Company or Public Company duly constituted
under Indian Companies Act.
5. Property ownership of a Government Company.
6. Property ownership of a Cooperative society
registered under Co-operative
Societies Act of respective stores.
7. Property
ownership of partner ship firms formed and registered under Indian Partnership
Act.
8. Wakf properties
9. Trust properties including properties of temples
and religious endowments.
10. Property ownership of public societies and
clubs registered under societies Act.
11. Property ownership of Autonomous
Institutions (Statutory Bodies) like universities, electricity boards etc.
12.
Property ownership of Nationalised
undertakings etc.
The first and
foremost step in purchase of property is the scrutiny of title deeds before
entering into an agreement with the seller / vendor. The ownership can be
traced from the title deeds and the revenue records. Verification of title is
very important.
Ascertainment of
origin of the property, subsequent transfers, present status of the property
are the three most important steps to be followed to trace the title of a
property. For peaceful enjoyment of a property, apart from having possession,
whether physical or constructive, clean and marketable title, free from all
kinds of encumbrances is very important. There is no set yardstick to trace the
title and it depends upon the diligence and application of mind of the
advocate. As it is the duty and responsibility of the purchaser's advocate to
safeguard the interest of his client, he shall have to thoroughly scrutinize
the marketable title of the property and genuineness of the documents and
advise his client about the risk, if any, involved in the transaction after
such examination.
Ascertainment of
the origin of the property is very important to trace the title of the
property. It is otherwise called "Root of Title". The Vendor may have
acquired the property by various modes such as Government Grant land, allotment
made by the Government/Autonomous bodies/Housing Societies, by virtue of Will,
sale, inheritance, etc. If the property is a Grant land or allotted by any
authority, then the Grant Certificate or Allotment letter issued by the
Competent Authority is necessary, apart from the other connected
documents, which is considered as the origin of the property.
In case of succession or transfer by way of Will, Sale, Gift, Exchange,
Partition, Release, Settlement Deed or inheritance, we require documents of at
least 42 years to be scrutinized and verified in a sequential order requiring
methodical examination of all the events or transfers concerning the property.
Documents covering a minimum period of 43 years of Adverse Possession against
individuals or Conflicting Claims (other than mortgage) against individuals
and 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 before
is presumed to be valid.
Tracing
of the title has to start by verification of the earliest document available,
which is called parent deed or mother deed. If the earliest document is not
available, the certified copy must be obtained at the Jurisdictional
sub-registrar office. This earliest document details as to how the first owner
got the property. Generally in earlier times, all the landed property was owned
by Kings, Jodidars, Inamdars and they gifted or granted the land to the people.
Such acquisition document generally will be by an Order of the Court,
Government, Statutory Authority, ruler. Thereafter, the property might have
passed through different hands who are referred to as intermediary parties.
Such documents have to be examined in chronological order tracing the devolution
of property to each of the intermediary parties. The sequence should be
continuous without any break till the immediate transferor. In case of any
missing link, the records at the sub registrar's office revenue department have
to be verified to the satisfaction, but should not be ignored.
But documents like
gift deed, partition deed, release deed, settlement deed are not mother
documents and the title of the executants of such deeds has to be examined.
After tracing the title of the property from the first owner to the immediate
transferor, the latest document which describes how the present owner got the
property has to be verified. Apart from legal documents like transfer deeds,
the revenue records like tax paid receipts, Khatha, approved plans, encumbrance
certificates, mutations, family tree and other records extracts have to be
verified. The most important function of tracing the title is investigation,
where it is ascertained that records, documents produced actually exist are
recorded in books, records of respective departments. But advocates certify the
title with a narration "based on documents produced" which does not
refer to the investigation or genuineness of the documents. Often the advocates
accept the latest documents without supporting documents and certify the title
which is a dangerous practice.
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