The word ‘property’ has been derived from a Latin word ‘properietate‘ which means a thing that is owned. The term property has been defined in numerous legislative acts according to their uses and requirements, and thus there is no uniform definition of property. In a general sense, property means any tangible or intangible thing of which one has ownership rights. Thus, a property includes money, land, virtual entity, profits arising from a land, etc. The basic idea behind the concept of property is to show some control of an individual (can also be a company) over a particular thing.
The term Property has been defined in various acts such as-
Section 2(c) of the Benami Transactions (Prohibition) Act, 1988 defines Property as “property of any kind, whether movable or immovable, tangible or intangible, and includes any right or interest in such property”
Section 2(11) of the Sale of Good Act, 1930 defines property as “general property in goods, and not merely a special property”
1. Transfer of Property Act, 1882: this is a central act which provides for general principles of immovable property such as their sale, exchange, gift, lease, mortgage etc. This act also lists who can transfer and what is transferable under the scope of this act.
2. The Indian Easements Act, 1882: this is a central act which provides for general principles of easementary rights of immovable property.
3. Registration Act, 1908: the act regulates the procedure and lists the documents required for registration of the movable and immovable property.
4. Indian Stamp Act 1889: This Act imposes obligation to pay stamp duty on certain and precise documents. Indian Stamp Act acts as fiscal legislation.
5. The Real Estate (Regulation and Development) Act, 2016 (RERA): this is a central act which list out various regulations for the real estate sector for its development and promotion.
6. Specific Relief Act, 1963: this act provides methods of recovery of possession of movable and immovable property.
In simple words, movable property means a property which can be moved from one place to another. Just like property, movable property has not been defined clearly in any act.
The term “immovable property” has been defined in various central acts, but none of those acts categorically define the term. The most important act which deals with immovable property is Transfer of Property Act, 1882. Under Transfer of Property Act, 1882 the term Immovable property is defined as “immoveable property does not include standing timber, growing crops or grass; “instrument”, means a non-testamentary instrument”
On combining the various acts and supreme court judgements, immovable property also includes “Land as well as benefits arising out of the land and things that are attached/rooted in the earth. Things which can be extracted from the earth or can be detached from the earth are considered as movable property and not immovable property. Thus, wild crops, plants, trees, grass etc are considered as immovable till they are attached to the ground. Once they are removed, they become movable property.
To sum up, it would be safe to say that a property which cannot be moved from one place to another is immovable property.
Registration is a term used in legal and official language and Registration is taking care by Section 17 of the Registration Act, 1908 and with Registration the condition precedent is payment of Stamp Duty. Registration of any documents shall be done within 4 months from the date of execution of the agreements. Registration of the documents of sale and purchase of immovable property is mandatory and ensures conservation of evidence, prevention of fraud and assurance of title. The provision of the Registration Act, 1908 provides for the registration of various documents, to ensure conservation of evidence, prevention of fraud and assurance of title.
As per Section 17 of the Registration Act, 1908, all transactions that involve the sale of an immovable property for a value exceeding Rs 100, should be registered. This effectively means that all the transactions of sale of immovable property have to be registered, as no immovable property can be purchased for merely Rs 100.
Section 17 of the Indian Registration Act,1908 provides for mandatory registration of certain documents. They are:
1. Instruments of gift of immovable property;
2. Non-testamentary instruments which purport or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immovable property. This means thatall transactions that involve the sale of an immovable property for a value exceeding Rs 100, must be registered;
3. Leases of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent;
4. The documents containing contracts to transfer for consideration, any immovable property for the purpose of section 53A of the Transfer of Property Act, 1882.
The Act also provides for documents of which registration is optional (Section 18). They are:
Section 23 of The Registration Act, 1908 states that all documents except a ‘Will’ have to be presented for registration within 4 months from the date of execution. If a document is executed by several persons at different times then that document has to be presented for registration and re-registration within 4 months from the date of each execution.
The documents that are accepted for this purpose, include Aadhaar Card, PAN Card, or any other proof of identity issued by a government authority. The signatories also have to furnish the power of authority, if they are representing someone else.
Registration Fee for Property is 1% of the value of the property and subject to a maximum of Rs 30,000/- (refer Bombay Stamp Act). However, for other states local laws will prevail.
Any document that is mandatorily required to be registered but is not registered, cannot be admitted as evidence in any court of law (please refer local laws for other states)
The property documents that need to be registered should be submitted to the office of the Sub-Registrar of Assurances within whose jurisdiction the property, which is the subject matter of transfer, is situated. The authorised signatories for the seller and the purchaser have to be present along with two witnesses, for registration of the documents.
Transfer of property means an act by which a living person conveys property, in present or in future, to one or more than one living persons, or to himself. The phrase “to transfer property” means to perform such act. According to the Transfer of Property Act, 1882, there are mainly six types of transfers. They are:
Registration of sale deed- Section 17 of the Indian Registration Act, 1908 has made it mandatory to get the registration done for the documents related to sale, purchase, transfer or ease of property. Law doesn’t recognize the unregistered properties and no legal remedies are available for unregistered properties in case of any default.
a) Simple Mortgage: Where, without delivering possession of the mortgaged property, the mortgagor binds himself personally to pay the mortgage-money, and agrees, expressly or impliedly, that, in the event of his failing to pay according to his contract, the mortgagee shall have a right to cause the mortgaged property to be sold and the proceeds of sale to be applied, so far as may be necessary, in payment of the mortgage-money, the transaction is called a simple mortgage. This type of mortgage can be seen when people apply for loans in a bank against some mortgage.
b) Mortgage by Conditional Sale: In a mortgage by conditional sale the mortgagor sells the mortgaged property to the mortgagee on a condition that if the mortgagor fails to pay the mortgage money on a certain date then the sale shall become absolute. But, if the payment is made by the terms agreed, then the sale shall become void. This is a type of mortgage where there is an ostensible sale which gets converted into an absolute sale if the ostensible seller is unable to repay the loan.
c) Usufructuary mortgage: the mortgagor delivers possession of the mortgaged property whether expressly or impliedly to the mortgagee, and authorises him to retain such possession until payment of the mortgage-money, and also authorizes him to receive the rents and profits accruing from the property in lieu of interest, or in payment of the mortgage-money, or partly in lieu of interest or partly on the payment of the mortgage-money, the transaction is called an usufructuary mortgage.
d) English mortgage: Where the mortgagor binds himself to repay the mortgage-money on a certain date, and transfers the mortgaged property absolutely to the mortgagee, but subject to a proviso that he will re-transfer it to the mortgagor upon payment of the mortgage-money as agreed, the transaction is called an English mortgage.
e) Mortgage by deposit of title-deeds: where a person who live in Calcutta, Madras, Bombay or in any other town as specified by the government, delivers to a creditor or his agent documents of title to immoveable property, with intent to create a security thereon, the transaction is called a mortgage by deposit of title-deeds.
f) Anomalous mortgage: A mortgage which is not a simple mortgage, a mortgage by conditional sale, an usufructuary mortgage, an English mortgage or a mortgage by deposit of title-deeds within the meaning of section 54 of the act is called an anomalous mortgage.
Registration of mortgage- registration of agreement of mortgage is optional. It is not mandatory to register the agreement of mortgage.
How is a lease made- A lease of immoveable property from year to year, or for any term exceeding one year, or reserving a yearly rent, can be made only by a registered instrument.
Registration of a lease- it is mandatory to register leases of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent. It is not mandatory to register a lease deed which is less than one year.
When two persons mutually transfer the ownership of one thing for the ownership of another neither thing or both things being money only, the transaction is called an “exchange”. A transfer of property in completion of an exchange can be made only in manner provided for the transfer of such property by sale. Thus, an exchange is the same as sale but it differs in consideration. It is to note that exchange is not limited just to immovable property. This is a classic example of barter system. For example- X transfers his apartment worth Rs. 1,00,000 to Z. Z in exchange of that property, transfers his land worth Rs. 95,000 plus 5,000 cash, this mutual exchange of ownership is called exchange.
Registration of deed of exchange: according to section 23 of The Registration Act, 1908, all documents except a ‘Will’ have to be presented for registration within 4 months from the date of execution. Hence, it is mandatory to register a deed of exchange if the value of the immovable property exceeds the value of Rs. 100. For movable property, the registration is optional.
“Gift” is the transfer of certain existing moveable or immoveable property made voluntarily and without consideration, by one person, called the donor, to another, called the donee, and accepted by or on behalf of the done.
Registration of gift of immovable property- As mentioned above, gift can be of immovable as well as movable property. However, in the case of immovable property it is mandatory to register the instrument of the gift deed. Two witnesses have to be present during registration at the sub-registrar’s office to attest the deed. Once the registration process is complete, transfer of title can be made. Stamp duty of recommended value has to be paid for registration of Gift Deed. The Stamp duty charges differ from state to state and is also based on gender. Few states offer a concession in stamp duty if the property is gifted to family member.
Registration of gift of movable property- Registration of gift deed for movable property is optional. Thus, a simple letter drafted by the donor describing the gift deed and an acceptance letter by the done would be sufficient to make the transfer of movable property valid. The Gift of movable property can be made by a registered deed or by mere delivery of the property.
Time limit for registration of a gift deed- a gift deed has to be presented for registration within 4 months from the date of execution. If a gift deed is executed by several persons at different times then that document has to be presented for registration and re-registration within 4 months from the date of each execution.
Gift to minors- a minor can accept a gift; however, the legal guardian would be in control of the gift until the minor attains the age of 18. It is to note that a minor cannot be a donor i.e a minor cannot gift a property to anyone.
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