Essential terms of purchase and sale contracts for immovable property-Part 1
The transactions involving sale or purchase of immovable properties need to be handled with utmost care, transparency, honesty and dignity. If these are followed, a lot of heartache and drainage of investment can be avoided.
However a common citizen may not be aware of the legal stipulations or obligations while transacting in immovable property.
Section 55 and sub-sections of the “Transfer of Property Act, 1882” confer certain Duties, Rights and Liabilities on the Seller and the Buyer. They’ve been listed below and they should be taken in to account while entering into any deal of immovable property.
Responsibilities and Liabilities of the Seller
The seller has to disclose to the buyer any material defect in the property or in the seller’s title.
The seller is deemed to contract with the buyer that he / she enjoys full rights over the property which he / she intends to transfer to the buyer, and that he / she has authority to transfer the same to the buyer.
To produce to the buyer all documents of title relating to the property and to answer relevant questions of the buyer in respect of property and the title.
To execute a proper conveyance of the property, on payment of the due amount, at a proper time and place. Generally, it is the sub-registrar’s office.
To pay all public charges, rents, taxes, in respect of the property up to the date of sale.
To deliver, after receipt of the price or as agreed, to the buyer all documents of title relating to the property which are in the sellers’ possession and power.
Rights and Liabilities of the buyer
Section 55 (5) (a) to (d) of “Transfer of Property Act, 1882”, imposes upon the buyer certain duties, while Section 55 (6) (a) and (b) of the “Transfer of Property Act, 1882”, entitles the buyer to certain rights, as detailed below:
Duties of the buyer
Where the buyer is aware of the seller’s interest in the property of which the seller himself is not aware, then the buyer must disclose it to the seller.
To pay or tender the purchase price, to the seller or his authorized agent, at the time and place of completing the sale.
To bear any loss arising from the destruction, injury or decrease in value of the property after ownership of the property has passed to the buyer and such destruction / injury is not caused by the seller.
Rights of buyer
To the benefit of improvement or increase in value of the property where the ownership of the property has passed to him.
Where two properties are subject to a common charge and one of the properties is sold, the buyer is entitled to get the charge satisfied out of the other property without affecting the property purchased by him.
To compel the seller for specific performance of the contract to the extent of the seller’s interest in the property, where he has paid the purchase price
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This article is contributed by -IndianPropertyLawyers, simplifying property
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