Safeguards for Property Buyers
Everyone
dreams to own some shelter of his/her own during his/her life time. But, unless the property purchaser adopts
safeguards while finalizing the deal with the vendor, he/she is most likely to
land in uncalled for litigation, loss of time and money. For peaceful
possession and enjoyment of the property by the purchaser, the property should have clear marketable title free from
encumbrances preferably with vacant possession.
To
know whether the property is free from litigation and the vendor has a clear
and marketable title of the property, it is necessary to examine the title deeds of the property very
scrupulously. Ownership of the vendor can be traced from the title deeds and
revenue records. Mere tracing of the title on the basis of the records
available would not suffice. Examination
of the genuineness of the records, identification of the property, verifying of
all the original documents with the records of the concerned Governmental authorities, issuing
notification in newspaper and physical possession of the title of the property
are some of the important functions required to be performed while scrutinizing the property documents.
The
first and foremost exercise the purchaser or his advocate has to undertake
before entering into any agreement with the vendor is to scrutinize the title
deeds of the property under consideration. Since it is the duty and responsibility of the
purchaser's advocate to safeguard the interest of his client, he shall have to
minutely scrutinize the title deeds of the property to ascertain the marketable
title and genuineness of the documents. While so doing, the advocate shall
examine the risk involved in the transaction and guide his client suitably.
Tracing
of the origin of the property is a very
important step in the scrutiny of property documents. Origin of the property is
also called “Root of Title”. It is the
safest way to determine the origin of the property and trace its marketable
title. It is necessary to examine the title of the property for a minimum
period of 42 years. In cases of adverse
possession against individuals or conflicting claims, other than mortgage,
documents covering a minimum period of more than 12 years is necessarily to be
checked. As regards the period of
limitation against the Government, 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
possession against the Government under the Limitation Act, 1963. As per
Section 90 of the Indian Evidence Act 1872, the document executed 30 years
before is presumed to be valid. These
are all the general principles. However, the number years referred to
above would vary depending upon the documents made available
for scrutiny.
After
ascertaining the origin of the property, there should be a methodical
examination of subsequent events of transfer and other transactions relating to the property in a
sequential order. Here, the purchaser's advocate has to very carefully look
into all aspects from legal angle as to
how the property was transferred from the previous owners till it reached the
hands of the present owner. The transfer
may be by possession, inheritance, settlement, will, sale, mortgage, release,
gift etc. The advocate has to carefully examine these deeds and other
supporting documents like revenue and
other property records to get a clear picture as to the valid marketable title of the vendor.
Verification of identity of the parties and their family connections,
ascertainment of existence of any court litigations / proceedings pending
before any court of law or other legal
forums or authorities including revenue authorities in respect of the property
under consideration is also necessary.
All
the statutory clearance required for an effective transfer of the property in
favour of the purchaser must be obtained before executing the Deed of
Conveyance. The purchaser must be apprised of
the need of obtaining statutory clearances from various authorities like
revenue, land reforms, income tax, etc.,
for an effective transfer of the property in his favour.
Present
status of the property is the most important aspect to be looked into before
purchasing the property. The advocate who has experience in property
documentation can easily find out as to whether the present owner has valid and
marketable title over the property or not. For this purpose he shall examine
the title deeds and other supporting
documents available with the vendor. At the same time, the advocate shall also
find out as to the existence of the
legal heirs of the vendor. If there
exists legal heirs and if they are major
in age, the advocate shall ensure the legal heirs presence while executing the Deed of Conve-
yance. If they are minors, 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 existence of legal heirs. In such
cases, 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 practical clarification.
The
advocate must find out in whose name the Khatha 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 from 12 years upto 43 years to
ascertain whether any charge is created on the property and the type of charge,
and whether such an encumbrance is presently subsisting or not. Municipal and
other revenue authorities too maintain records from which it could be
ascertained as to who is presently in
possession of the property according to their records, what is the amount of
tax payable on the property and upto what period tax has been paid.
After
thoroughly scrutinizing the property documents, the purchaser or his advocate
has to cross check all documents furnished by the vendor with
the records of the concerned departments
to ensure that the documents produced by the vendor are genuine; that they are originated from the
concerned departments and that they are not fake. In addition, the advocate has
to find out from the department whether there is any notification or
proceedings against the property or the present owner. In the case of
buildings, it must be ensured that demolition notice has not been served on the vendor.
The
identity of the property is to be carried out by visiting the spot. The
measurement of land mentioned in the documents must tally with actual physical
measurement. It must also be ensured that there exists no encroachment of the
property. In case there exists encroachment, the measurement of the available
land must be recorded and this must be mentioned in the Deed of Conveyance. The
boundaries as shown in the schedule of the property must be physically verified
on the spot. Also, the purchaser may make enquiries tactfully with the adjacent
property owners about the ownership of the property he is proposing to buy.
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