Transfer of Property Act 1882

Governs the transfer of property between individuals.
Standing timber(Standing Trees for building,burning purpose) is not immovable property
Examples:
  Immovable Property: Land, building, mines, Trees and plants, Infrastructure projects(Bridges, tunnels)
  Movable Property: Personal belongings(Clothes, jewelry, furniture), Cars, livestock, Art, Machinery

Scope:
1. Property types: Applies to both movable and immovable property, such as land and buildings.
2. Transfer methods: Covers various methods of property transfer, including sale, gift, mortgage, lease, and exchange.
3. Legal requirements: Legal requirements for property transfers, including conditions for valid transfers.
4. Principles of justice: principles of justice, equity, and good conscience
5. Muslim Law: act donot affect any inconsistencies of Muslim personal law.
6. Not applicable to these states: Punjab.

Transfer of Property

When a living person gives property to one or more living people.

Essentials of a valid transfer:
1. Person competent to transfer: persons who may be allowed to transfer property.
2. Consideration: price or money consideration is an important element of the sale. It includes any form of money
3. Competency to contract: competency to enter into a contract
4. Consent: of both parties involved should be genuine and free from any vitiating factors
5. Formalities
6. Intension to transfer: should be absolute and unconditional, with the clear intention to convey the entire interest in the property to the buyer
7. Possession
8. Section 5: restrictions on transfer: restrictions on property transfers
9. Transfer by Act of parties: voluntary actions of the transferor and transferee, such as sale, gift, exchange, lease, or mortgage.

State the exception to the general rule that property of any kind may be transferred
No transfer can be made if properties dedicated to public or religious uses

Can Property be transfered on name of unborn person
Yes, property can be transferred to an unborn child(Sec-13,14 Transfer of Property Act(TPA), 1882), but only under certain conditions
a. No direct transfer: direct transfer is void since transferee is non existent
b. Prior Interest: Property must be transfered to a living person prior, then transfered to new born
c. Unborn must be born before termination of prior interest
d. Entire remainder must be given to unborn: all amount should to given to new voen.

Actionable Claim

Legal right to demand something from another party, often monetary compensation. Examples:
Claim for rent that is due in the future, claim for possession of a motorbike that was sold but not transferred

Types of actionable claims
Debt(means a sum of money that is owed or due), Collateral(something pledged as security for repayment of a loan)
1. Unsecured money debt: A debt that is not secured by collateral and is based on the debtor's promise to repay the creditor eg: credit card debt, personal loans
2. Accruing debt: debt that is present but payable in the future. eg: employee's salary
3. Existent debt: Debt that is already due and payable. Eg: claim for arrears of maintenance allowance or salary
4. Conditional debt: A conditional debt is a claim for a sum of money that is subject to a condition

Notice

Formal communication that informs or instructs a specific audience about important matters, events, or changes

Types of Notice
1. Public notice: announcement to the general public, such as a government announcement
2. Notice of meeting: Informs members of an organization about an upcoming meeting
3. Notice of termination:
4. Notice of rent increase:
5. Legal notice: A formal notice filed with a court or officer to suspend a proceeding until the filer is given a hearing
6. Eviction notice:
7. Actual notice: means a person was directly informed of something, like receiving a document personally
8. Constructive Notice: Law presumes someone is aware of something because it was made publicly available

Property Types

1. Movable property: Can be moved without changing its size or shape, such as jewellery, money, watches, vehicles, books, and utensils.
2. Immovable property: Cannot be moved from one place to another, such as land, buildings, houses, offices, and plants or trees attached to the land.

Terms

1. Profit a prendre: Legal right to take something from another person's land, such as soil, minerals, timber, or wildlife
2. Royalty: payment made to the owner of intellectual property
3. Copyright: is the legal protection granted to original works of authorship, giving the creator exclusive rights to reproduce, distribute, and control their creation
4. Patent immovable property: A patent is a right granted by a country's government to an inventor for their invention. It gives the inventor the exclusive right to prevent others from making, using, or selling the invention without their consent. A patent is an intellectual property right that is granted to an inventor

Rules

Rule against Perpetuity(a bond or other security with no fixed maturity date)

Rule which prevents property owners from creating long-lasting restrictions on property transfer beyond a specific time limit after their death. Time limit is 21 years after death of person. Limits the length of time that a person can control the ownership of a property. Applies to wills, trusts, and other instruments

Exceptions to this Rule
Transfers for charitable purposes Transfers for the benefit of unborn persons
Transfers made in exercise of a power of appointment
Transfers for benefit of public

Doctrines

Doctrines of Election(Sec 35)

Person has to choose(elect) either of 2 things.
If A is selling his house then he can take money and vacate, or elect not to take money. He cannot keep money and also house

Essentials of Doctrine of Election
Transfer must provide certain benefit to owner of property
Owner's duty to elect
Election: Must be expressed or implied
Suspension of election: if owner is disabled at time of election, this can be suspended

Doctrine of part performance(Sec-53A of Transfer of Property Act, 1882)

a contract to be enforceable even if it wasn't in writing, as long as one party has taken steps to partially perform the contract
Purpose: The doctrine protects the interests of transferees(Owner) who have taken possession of property but can't get the title. Also prevents the transferor(builder) from enforcing their rights against the transferee

When it applies
There's a valid agreement between the parties, even if it's not in writing or registered
Transferee has taken possession of the property or made improvements based on the agreement
Transferee has paid or agreed to pay the consideration, either fully or in part
Transferee has performed or is willing to perform their part of the contract

Limitations
Not for oral agreements
Awareness of the contract:

Doctrine of Lis Pendens(latin meaning pending litigation(process of taking legal action))

Gives a court control over property during a lawsuit. protects the rights of parties involved in a lawsuit.
During pending litigation nothing new should be introduced(eg: transfer of property)
A notice of lis pendens is usually recorded in the chain of title for real property. This notice warns people about property

Essentials
A suit is pending:
property is involved in the suit:
Property must not be collusive(involving secret or unlawful cooperation)
The property is transferred

Exceptions to lis pendens
a. Unidentifiable: If the property is not described correctly in the plaint, the doctrine does not apply
b. Collusive suits: Doctrine does not apply to suits that are collusive or friendly in nature
c. Suits involving pending transfers by a non-party: doctrine does not apply to suits involving pending transfers by a person who is not a party to the suit.
d. Suits for debt or damages: doctrine does not apply to suits for debt or damages where the claim is limited to money

doctrine of fradulent transfer

As per sec 53 of Transfer of property act 1882
This doctrine helps creditors(Bank) from getting fraud. person taking loan is debitor.
Example: A transfers his property to B without giving actual ownership, intending to keep the assets out of his creditor C's reach. This would be considered a fraudulent transfer

Exceptions to Doctrine of fradulent Transfer
a. Good faith: If the transferee(person who receives title or custody of something) acted in good faith and had no knowledge of the transferor's(one who does transfer) fraudulent intent, the transfer is not voidable.
b. Insolvency of the creditor: If the transferor was not rendered insolven(unable to pay debt) by the transfer, and the transfer was made for adequate consideration, it may not be considered fraudulent

Essentials of Fradulent Transfer
a. Transfer of immovable property
b. Transfer is fradulent.
c. A transfer is voidable by a creditor(person who pays credit to buy something) if the transfer was made with the intent to delay or defeat the creditor.
d. Gratuitous transfer to defraud a further transferee: someone transfers property without receiving any consideration (meaning for free)

Cases
1989 Saroj Ammal vs Sri Venkatesh Finance Corp. There was debt on person. To false purchaser he sold all his properties and purchaser has not sent any money to him, Now debitor said I don't have properties/money, How to pay your debt?

Doctrine of Holding out

Ostensible(Imaginary not real) Owner

A person who appears to own a property but is not the actual owner.
Transfer of Property Act, 1882, Section 41 governs the concept of an ostensible owner. This section protects innocent buyers or parties who interact with the ostensible owner in good faith

When Transfer by Ostensible Owner is valid?
- Ostensible owner must have the consent of the actual owner, either expressed or implied
- ostensible owner must receive some form of compensation in exchange for the property
- transferee(who recieves property) must exercise reasonable caution regarding the transferor's authority

Effect of transfer made by ostensible owner
Transfer made by ostensible owner is valid when its done in good faith and transferee is aware about it. ostensible owner has consent of Real owner.

Cases
1813 Lunhman vs Kalicharan:
A bona fide purchaser (BFP): someone who buys property in good faith, without notice of any defects in the title, and for a valuable consideration
Kalicharan has purchased the property from stridhan of his wife. After death of Kalicharan property was sold to defendant (who acted as bonafide owner) and purchaser in good faith purchased from wife. Son of kalicharan sued the purchaser to recover property but he could not recover it.

Mortgage

Mortgage is a loan aggrement, when someone takes loan from bank to buy a property.
Borrower/Mortgagor/debtor: Someone who takes the loan
Lender/Bank/Mortgagee/creditor: Someone giving the loan
If the borrower doesn't repay the loan plus interest, the lender has the right to take the property

Tacking:
Concept that allows a mortgagee (lender) to combine multiple mortgages on the same property into a single security interest.
Example: A has taken loan from Bank-A(10 lakhs). Later A takes loan from Bank-B(15 lakhs), but Bank-B comes to know about the prior mortgage from Bank-A, and mortgage document mention max limit=12 lakhs. Bank-B will limit loan to 12 lakhs

Rights of Mortgagor

1. Redemption: See Below
2. Receive benefits: benefits from the property, such as rental income, as long as it doesn't violate the mortgage agreement.
3. Compensation: entitled to compensation if the mortgagee damages the property
4. Inspect and produce documents: mortgagor can inspect and copy any documents related to the mortgage
5. Transfer to a third party: mortgagor can request the mortgagee to transfer the property to a third party
6. additions to property

Mortgagor Right of Redemption

Means Redeem the property by paying off the mortgage debt in full

Mortgagor's equity of redemption:
Legal right of mortgagor where he can reclaim the ownership of mortgaged property by paying off the outstanding mortgage debt.

Mortgagor clog(restrictive clause) on redemption
Refers to any clause or term within a mortgage agreement that unfairly restricts the borrower (mortgagor) from exercising their right to redeem their property by paying off the mortgage debt
Some Examples of Clog
- Mortgagor to sell the property only to the mortgagee at a predetermined price
- Mortgagee kept an option to purchase the property at a significantly lower price than market value after the mortgage period
- Imposing excessive penalties or huge interest rates on late payments.
- Postponement of redemption for long term.
- Restrictions on alienation(ie transfer of property).

Liabilities of Mortgagor

1. Repaying the loan
2. Maintaining the property: mortgagor is responsible for maintaining the property and ensuring it doesn't depreciate in value
3. Paying taxes and dues: paying property taxes
4. Avoiding waste: mortgagor is liable if they act in a way that destroys, injures, or reduces the value of the property
5. Covering improvement expenses

Mortgagee respect of mortgage property / mortgagee Rights & Responsibilities

1. Lien on Property: Lender/Mortgagee has a legal claim to the property until the loan is repaid
2. Right to foreclose: If the mortgagor defaults on the loan, the mortgagee can foreclose on the property and sell it to recover the remaining balance
3. Right to sell without court intervention: Under certain conditions, the mortgagee can sell the property without informing the courts
4. Right to impose terms: mortgagee can set terms to protect their investment, such as insurance requirements and restrictions on how the property can be used
5. Can appoint Manager: person would, collecting rents and profits, and making necessary repairs
6. Pay government revenue: mortgagee is responsible for paying government revenue and other public charges
7. Juvinate the property: mortgagee must use any insurance money to reinstate the property

Essentials of a mortgage Deed

1. Registered Mortgage deed: Must be stamped and valid. should include following detials: Parties(lender, borrower, gurrantors), Property details, repayment terms(interest, payment schedule)
2. Transfer of interest of immovable property: There must be some interest in property
3. Property should be mentioned in deed
4.

Types of mortgages

Differences

Mortgage vs Charge

Mortgage vs Sale

Sale

Sale is the transfer of ownership of a property in exchange for a price.

Essentials of valid sale

1. Parties: must be two parties: the seller (transferor) and the buyer (transferee)
2. Competency: Both parties must be competent to contract, meaning they must: Be of sound mind, Be over 18 years old, Not be disqualified by law
3. Transfer of ownership: seller must transfer ownership of the property to the buyer.
4. Property must be immovable
5. Written agreement(Sale Deed): Must be created. Must be signed. must be registered with the Sub-Registrar's office
6. Legal Formalities: Must comply with legal formalities: Paying stamp duty, Ensuring the sale complies with other relevant laws

Hire Purchase aggrement

Buyer buys are item on installement. Buyer makes an initial payment, then pays off the remaining balance in installments plus interest. Buyer becomes the owner of the item once the total purchase price is paid off. Buyer has the option to return the item during the hire period, and can terminate the agreement at any time

Usage
1. To purchase expensive item for which buyer does not have money as of now
2. Beneficial for businesses that are short on working capital

Is hire purchase agreement considered Sale? No
Because ownership of goods does not transfer to the buyer until all installments are paid means buyer is essentially "renting" the item until they fully own it

Sale Vs Gift

Sale vs Exchange

Marshalling

Marshalling is a legal principle that helps organize debt(sum of money that is owed or due) recovery when multiple properties are involved.
Applies when a property owner has multiple properties mortgaged to different creditors
Example:
Rahul owns 2 houses: House A and House B.
These are loans Rahul taken for houses. HouseA(HDFC, ICICI), HouseB(HDFC)
If Rahul is not able to repay the loan(or sells the property), Law says 1st HDFC will recover loan by selling House-B, then ICICI will recover his loan from House-A.

When Marshalling applies

1. Two or more properties are owned by the same person and are subject to a mortgage
2. One or more of the properties are sold to another person

Contribution

Ensures fair sharing of common debt. It's like splitting a restaurant bill among friends who shared a meal.
Example:
3 sisters inherit a house with an outstanding loan
The eldest sister pays off the entire loan, She can ask her sisters to contribute equally, Each sister should pay 1/3 of the loan amount

Doctrines

Lessor, Lessee

Lessor: Owner of the property
Lessee: Tenant who pays to use it

Rights & Liabilities of Lessor

Rights
1. Collect Rent
2. Additions or improvements made to the property during the tenancy
3. Right to Inspect
4. Right to Terminate the Lease: Can terminate with due intimation on certain conditions
5. Receive Security Deposit

Liabilities
1. Duty of Disclosure: Lessor must disclose any material defects in the property
2. Ensure Peaceful Possession: Allow use the property without interruption during the lease term
3. Provide Property Possession: Once deed is executed.

Rights & Liabilities of Lessee

Rights
1. Right to Use the Property
2. Right to Remove Fixtures: lessee can detach items they have attached to the property
3. Right to Crop Profits: if they have sown crops, lessee can collect profits
4. Right to Transfer Interest: lessee can sub-lease or mortgage(if aggreed in aggrement).

Liabilities
1. Pay Rent
2. Maintain Property
3. Disclose Material Facts: Damages etc
4. Give Notice of Interference: Notify lessor about any proceedings or encroachments affecting the property
5. Restrictions on Modifications
6. Return Possession: After term end

Exchange (Swap)

Mutual transfer of ownership between two parties where they swap properties with each other.
Parititon is not exchange. 1909 Satya Kumar vs Satya Kirpal case, Since partition does not involve ownership transfer

Essential Elements of Exchange

1. Transfer of ownership: Two parties must voluntarily transfer ownership of their respective properties
2. Can involve immovable or movable properties
3. Properties can be of different types(Eg: land can be exchanged for a vehicle)
4. exchanged properties must have monetary value. Additional cash payment is permissible if properties have different values

Gift

Transfer of Property Act, 1882. Gift is voluntary transfer of property from one person to another without any consideration

Onerous gift
Gift that places more obligations on the recipient than it provides benefits, recipient can't accept the gift unless they accept it in full
Example: Shares in multiple companies: If someone gifts shares in two companies to a recipient in a single transaction, the recipient must accept both sets of shares or reject them entirely. For example, if someone owns shares in a profitable company and a struggling company, and gifts both sets of shares to another person, the recipient cannot accept the shares of the profitable company and refuse the shares of the struggling company.

Universal donee
Recipient of a gift that includes the donor's entire property, including both movable and immovable items. He would be responsible for donor's liabilities and debts at the time of the gift
Case: Bapu Rao v Bulakidas: universal donee is responsible for liabilities also.

Essentials of Gift

1. Transfer of ownership: The donor transfers the entire interest in the property to the donee.
2. Property in existence: The property must be in existence at the time of the transfer
3. No consideration: The transfer must be without any monetary compensation or expectation of payment or service in return.
4. Acceptance: The donee must accept the gift during the donor's lifetime
5. Donor must be sound mind
6. Donee competence: The donee does not need to be competent(sound mind) to contract

When gift can be revoked?

1. Mutual agreement: The donor and donee can agree to revoke or suspend the gift on specific event occurance
2. Recission(canceling a contrac): A gift can be revoked if it was not made with the donor's free consent.
3. Incomplete gift: An incomplete gift can be revoked at any time.

Terms

Actionable Claim
Legal right to demand something from another party, often involving monetary compensation. Examples of actionable claims: Outstanding payments of business, Bank providing loan would demand EMIs, Promissory notes Feeding the grant by estoppel
if a person transfers property that he don't own, but later acquire the property, the transferee is entitled to the benefit of the property

Attestation
Attestation is the act of witnessing and signing a document to confirm that it was properly signed. It's a legal way to verify the authenticity of a document
English Law: Require Direct Witnessing. Attester needs to physically see the document being signed by the executant
Indian Law: Direct Witnessing is not required.

Spes successionis
Expectation of an heir to inherit a deceased person's property. It's a contingent right.

Notice to quit lease
Legal document that a landlord sends to a tenant, informing them that they must vacate the rented property by a specific date, essentially terminating their lease agreement.
Case: 1992. Kulkarni Patterns Pvt Ltd vs Vasant Baburao: Notice can be sent by registered post.

Right of foreclosure
Bank/Lender's legal right to take possession of a property when a homeowner defaults on their mortgage payments. Lender can exercise this right through a legal process called foreclosure.

Right of accumulation (ROA)
This is shareholder's right to receive a lower sales commission on new purchases when the total amount of funds they own reaches a certain breakpoint

Vested Interest
Created in favor of a person for a specified certain event, Creates an immediate legal right, even if possession is postponed. Ex: A promises to transfer property to B when B turns 22. B has a vested interest from the moment of promise, and if B dies before 22, the interest passes to B's legal heirs

Contingent Interest
Created based on an uncertain future event, Depends on the happening of an unspecified or uncertain condition. Can be defeated if the condition is not fulfilled

Defective Title
Situation where the legal ownership of a property cannot be fully transferred due to a flaw in the chain of title
To claim compensation for improvements made to a property under a defective title:
The transferee(who has title of property) must have made improvements to the property.
Transferee must be improving the property in good faith.

Condition precedent and condition subsequent

Condition precedent

A condition that must be met before a transfer can take place. For example, a buyer may need to obtain loan from a bank before house purchase is finalized. If the condition precedent is not met, the transfer is considered void.

Condition Subsequent

A condition that must be met after a transfer has taken place. If the condition subsequent is met, the transfer can be terminated or modified. For example, a condition subsequent could allow a party to escape their contractual duties if the terms become economically disadvantageous

Easement

Legal right to use another person's land for a specific purpose. Owner of land holds legal title of land.
Easement can be acquired: through a grant (express agreement), prescription, necessity
Easement can be extinguished: abandonment, destruction or expiration of a limited term
Easement can be suspended: when the dominant owner temporarily loses the right to use it
Easement can be revived: when the cause of suspension is removed, such as the lease ending

Dominant heritage
land that benefits from the easement. owner of the dominant heritage is called the dominant owner

Servient heritage
land that is subject to the easement. owner of the servient heritage is called the servient owner

License vs easement
License is permission to use something, while an easement is a property right that allows someone to use another person's land.

Disturbance to Easement
Dominant owner should enjoy easement without Disturbance. He can claim:
- Compensation: If an easement is disturbed and causes substantial damage
- Injunction(court order that requires a party to either do or refrain from doing something)
- File Suit for disturbance: suit for disturbance of an easement can be filed under Section 33 of the Easements Act

Essential elements of an easement

1. Purpose: easement must be for a specific purpose, such as accessing a road, laying utility lines, or ensuring natural light and air
2. Written agreement: exact location must be stipulated in the property's deed
3. Effect on subsequent owners: subsequent owners must allow the easement owner to continue using the land

Kinds of Easement

1. Continuous vs. discontinuous: continuous easement can be enjoyed without human intervention, while a discontinuous easement requires human intervention.
2. Apparent vs. non-apparent: apparent easement is marked by a permanent sign, while a non-apparent easement is not
3. Affirmative vs. negative: affirmative easement gives the holder the right to perform an action
4. Express vs. implied: express easement is created through a written agreement or deed, while an implied easement arises from the circumstances of the property's use
5. Utility easement: Allows a utility company to run power lines, water piping, or other types of utilities through a property
6. Floating easement: Exists when there is no fixed location, route, method, or limit to the right of way