Ownership rights are a prerequisite for any individual, or body of individuals, desirous of engaging in the managing or enterprising of immovable real estate assets, be they commercial, residential, or agricultural. The claim to ownership of a property, or transfer of the same, is regulated and conditioned through a legal framework constituted of specific provisions pertaining to the act of transfer of property, and the associated intricacies. In India, the majority of the cases pertaining to property management fall under the purview of the Transfer of Property Act, 1882.
The Transfer Of Property Act – An Overview
What is the Transfer of Property Act?
The Transfer of Property Act was conceptualized on February 17th, 1882. It assumed legal validity on 1st July, 1882. The act regulates the transfer of property, by an individual or a company, within the Indian subcontinent, on the basis of provisions (pertaining to possible scenarios) that are outlined in the 137 sections constituting the Act.
The transfer of ownership of an immovable real estate asset can be effectuated, in the present or a specified point in the future, through different legal modes such as the sale of the property, the partition of the same, a gift deed, through a will, through a lease, and certain other legal procedures.
It is to be noted, however, that the Transfer of Property Act regulates the transfer of property through such legal modes as sale, lease, mortgage, gift, or litigable claims. The purview of the act does not cover the transfer of property pertaining to inheritance, wills, forfeiture, insolvency, or sale necessitated by a legal decree. The Transfer of Property Act is co-extensive with the laws governing intestate and testamentary succession to property.
Transfer Of Property – The Intricacies
Following the provisions set forth in the Indian Constitution, the transfer of real estate assets falls under the purview of the constituent states. Each state has its own set of specified provisions pertaining to the transfer of property. Such a scenario, especially in the case of Non-resident Indians, inevitably results in the procedure for property transfer assuming complex dimensions. Such complications are all the more accentuated in the event where the country of residence, for the NRI, is markedly distant from their country of origin. Even if one were to overlook the arduous nature of the task, it still can result in the generation of exorbitant travel and legal expenses for the concerned individual. Such a situation necessitates the employment of expert, and empathetic, NRI Legal Services to cater to their predicament.
In India, the transfer of real estate assets compulsorily presupposes an extensive legal procedure marked by verification checks, subsequent documentation, and finally registration. The process, unlike in the West, is not as seamless as it could be. Furthermore, given the state, in the Indian subcontinent, in which the concerned property is located, the modalities pertaining to the transfer of property often vary. Also, depending on the precedent facts to such a transfer, the modalities to be catered to are different.
If the owner of a property wishes to transfer their claim prior to their death, they can effectuate such a transfer through a mode such as a gift deed, a transfer deed, a sale deed, or even a relinquishment deed. The Indian legal framework dictates that for a person to undertake such an act, they must be at least 18 years old, and mentally sound. Such an act, however, must necessarily be registered with the concerned government authority for it to assume legal validity. Failing in this, the deed stands invalidated. The procedure for registration of a transfer of property in India involves certain monetary considerations, such as those pertaining to the payment of stamp duty on the registered immovable asset. The evaluation of the necessary expenditure is dependent on a specified percentage of the commercial valuation of such an asset. The percentage is taken into consideration, as well as the rate of taxation is different for the different states of the Indian union.
Furthermore, in cases pertaining to intestate or testamentary succession to property, the formalities are slightly different in certain aspects of their execution. All acts pertaining to the transfer of property, as mentioned earlier, have to be compulsorily registered at the relevant government bureau. In the case of the demise of the owner of an immovable asset, the specifics pertaining to property transfer are dependent on the presence, or absence, of a relevant will of inheritance. An individual, through a legally validated will, can outline specifics pertaining to how their ownership rights to an immovable asset are to be divided within a specified group of persons, post their expiration. In the absence of such a will, the Indian legal system offers the provision for the devolution of ownership of the property amongst all credible Class 1 legal heirs. Post transfer of ownership, the relevant records in the government department are updated after completion of the registration process.
The Transfer of Property in India is a complex legal procedure that demands strict adherence to prescribed protocols. This in turn necessitates familiarity with the legal framework that is usually absent in the masses. It is advisable to avail of the services of competent NRI property lawyers in Chandigarh to avoid complications, pertaining to property management, in the future.