Everyone dreams to own some shelter of his/her own during his/her
life time. But, unless the property purchaser adopts safeguards while finalizing the deal with the vendor, he/she
is most likely to land in uncalled for litigation, loss of time and money. For
peaceful possession and enjoyment of the property by the purchaser, the property
should have clear marketable title free from encumbrances preferably with
vacant possession.
To know whether the property is free from litigation and the
vendor has a clear and marketable title of the property, it is necessary to examine
the title deeds of the property very scrupulously. Ownership of the vendor can
be traced from the title deeds and revenue records. Mere tracing of the title
on the basis of the records available would not suffice. Examination of the
genuineness of the records, identification of the property, verifying of all
the original documents with the records of the
concerned Governmental authorities, issuing notification in newspaper
and physical possession of the title of the property are some of the important
functions required to be performed while
scrutinizing the property documents.
The below mentioned safeguards may to a certain extent protect the
interest of the purchasers:
The first and foremost exercise the purchaser or his advocate has
to undertake before entering into any agreement with the vendor is to
scrutinize the title deeds of the property under consideration. Since it is the
duty and responsibility of the purchaser's advocate to safeguard the interest
of his client, he shall have to minutely scrutinize the title deeds of the
property to ascertain the marketable title and genuineness of the documents.
While so doing, the advocate shall examine the risk involved in the transaction
and guide his client suitably.
Origin of the Property
Tracing of the origin of
the property is a very important step in the scrutiny of property documents.
Origin of the property is also called “Root of Title”. It is the safest way to determine the origin of
the property and trace its marketable title. It is necessary to examine the
title of the property for a minimum period of 42 years. In cases of adverse
possession against individuals or conflicting claims, other than mortgage, documents
covering a minimum period of more than 12 years are necessarily to be
checked. As regards the period of
limitation against the Government, 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
possession against the Government under the Limitation Act, 1963. As per
Section 90 of the Indian Evidence Act 1872, the document executed 30 years
before is presumed to be valid. These
are all the general principles. However, the number years referred to above
would vary depending upon the documents
made available for scrutiny.
Subsequent Transfers
After ascertaining the origin of the property, there should be a
methodical examination of subsequent events of transfer and other transactions
relating to the property in a sequential order. Here, the purchaser's advocate
has to very carefully look into all aspects from legal angle as to how the
property was transferred from the previous owners till it reached the hands of
the present owner. The transfer may be
by possession, inheritance, settlement, will, sale, mortgage, release, gift
etc. The advocate has to carefully examine these deeds and other supporting
documents like revenue and other property records to get a clear picture as to the
valid marketable title of the vendor. Verification of identity of the parties
and their family connections, ascertainment of existence of any court
litigations/proceedings pending before any court of law or other legal forums
or authorities including revenue authorities in respect of the property under
consideration is also necessary.
Statutory Clearance
All the statutory clearance required for an effective transfer of
the property in favour of the purchaser must be obtained before executing the Deed of Conveyance. The purchaser must be apprised of the need of obtaining statutory clearances
from various authorities like revenue, land reforms, income tax, etc., for an effective transfer of the property in
his favour.
Present Status
Present status of the property is the most important aspect to be
looked into before purchasing the property.
The advocate who has experience in property documentation can easily
find out as to whether the present owner has valid and marketable title over
the property or not. For this purpose he shall examine the title deeds and
other supporting documents available with the vendor. At the same time, the
advocate shall also find out as to the existence of the legal heirs of the vendor. If there exists legal heirs and if they are
major in age, the advocate shall ensure
the legal heirs presence while executing
the Deed of Conveyance. If they are minors, 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 existence of
legal heirs. In such cases, 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 practical
clarification.
The advocate must find out in whose name the Khatha 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 from 12
years upto 43 years to ascertain whether any charge is created on the property
and the type of charge, and whether such an encumbrance is presently subsisting
or not. Municipal and other revenue authorities to maintain records from which
it could be ascertained as to who is presently
in possession of the property according to their records, what is the amount
of tax payable on the property and upto what period tax has been paid.
Genuineness of documents
After thoroughly scrutinizing the property documents, the
purchaser or his advocate has to cross check
all documents furnished by the vendor with the records of the concerned
departments to ensure that the documents
produced by the vendor are genuine; that
they are originated from the concerned departments and that they are not fake.
In addition, the advocate has to find out from the department whether there is
any notification or proceedings against the property or the present owner. In
the case of buildings, it must be ensured that demolition notice has not been
served on the vendor.
Identity of the property
The identity of the property is to be carried out by visiting the
spot. The measurement of land mentioned in the documents must tally with actual
physical measurement. It must also be ensured that there exists no encroachment
of the property. In case there exists encroachment, the measurement of the
available land must be recorded and this must be mentioned in the Deed of
Conveyance. The boundaries as shown in the schedule of the property must be
physically verified on the spot. Also, the purchaser may make enquiries
tactfully with the adjacent property owners about the ownership of the property
he is proposing to buy.
Paper Notification
There may be some grey areas in the property title of the vendor,
such as pending litigations, agreements entered
into by the vendor with others, claims of legal heirs, etc., on account of which even after
examining the various documents, the Advocate may not be able to find out
whether the property is truly and completely
free from any claim. Therefore, the paper notification could help the
purchaser to get response from the
genuinely affected party which in turn would help the purchaser to know
the clear and marketable title of the vendor.
Though paper notification is optional, it is always advisable to
notify in a leading local newspaper about the buyer's intention to purchase a
particular property to safeguard the interest of the purchaser.
Physical Possession
In the 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 before purchase of the property
to indicate ownership of the property.
After entering into an agreement to sell, the purchaser need not
close his eyes shut and proceed to finalize the deal. Therefore, even after
entering into an “Agreement to sell”, the purchaser must continue to make
enquiries to make doubly sure of the valid and marketable title of the vendor.
Upon such enquiries if it is found that there are defects in the title of the
property, which are not discernible in the ordinary course examination of
documents, the purchaser could withdraw from the transaction even when there
exists an agreement to sell. However, a mere suspicion of fraud that cannot be
proved will not make the title doubtful and the purchaser cannot disapprove the
title on that ground.
A reading of the above would go to show that tracing of title of
property is a specialized job. Services of well experienced advocates in property documentation would immensely help the purchaser in his peaceful possession
and enjoyment of property free from
litigation.
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