Introduction:
Being a property owner gives you the power to create types of charges on property that act as security interests, safeguarding your assets and guaranteeing that your debts are paid. These fees apply to both moveable and immovable property and are regulated by the Transfer of Property Act of 1882. In this post, we will discuss the many charges that can be made against your property, the contrasts between moveable and immovable property, and the importance of the Transfer of Property Act of 1882.
What does charge mean?
A charge is a legal security interest placed on real estate to ensure that a debt or obligation is paid. When someone uses their immovable property as security for paying back money to someone else, a charge is created, according to Section 100 of the Transfer of Property Act of 1882.
What are the types of charges on the property?
The various types of charges on property are as follows:
Equitable Charge: Parties can create an equitable charge by mutual agreement; registration with the Registrar of Assurances is not required. The charge holder is not authorized to sell the property to recoup the debt, even though it may be enforced in court.
Legal Charge: In contrast, registering with the Registrar of Assurances is necessary for a legal charge. This kind of legal charge on property is enforceable in court and grants the charge holder the authority to sell the property to recoup the debt.
Fixed Charge: A fixed charge is established when the charge holder has a particular interest in the property. When a property is presented as loan collateral, it is frequently used. The charge holder may sell the property to recoup the outstanding amount in the case of a fixed charge.
Floating Charge: A floating charge is established when the person holding the charge has a broad interest in the asset. With this charge, the debtor can only recoup the amount owed by selling the property when the bill is past due. The charge holder does not have direct authority to sell the property until that time.
An Overview of Property Types: Movable and Immovable
Moveable and immovable property are the two types into which property is divided in India. Any portable property, including jewels, cars, and furniture, is termed a movable property. Property that cannot be moved, for instance, land, buildings, and fixtures, is treated as immovable property.
Only immovable property is covered by the Transfer of Property Act of 1882. But the Act also permits charges to be established over mobile property. These fees were established by the Indian Contract Act of 1872, and they are controlled by its rules.
Conclusion:
To sum up, charges act as security interests that ensure that debts and obligations are paid. It is significant for property owners to become acquainted with the types of charges on property, such as equitable charges, legal charges, fixed charges, and floating charges. The establishment and transfer of property interests, primarily immovable property, are governed by the Transfer of Property Act of 1882. Nevertheless, the terms of the Indian Contract Act of 1872 apply to charges over movable property. It’s essential to be familiar with the information regarding these various fees and the related legal frameworks to protect property rights and make wise judgments.
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