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 title holder can be traced from the title deeds and revenue
records. It is the duty and responsibility ofthe purchaser’s advocate to safe guard 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.
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.
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.
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.
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.
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.
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.
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.
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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