An article about " RIGHTS AND OBLIGATIONS IN PROPERTY DEALINGS "

RIGHTS AND OBLIGATIONS IN PROPERTY DEALINGS

The Transfer of Property Act 1882 deals with various kinds of transfer of immovable property, which interalia  includes sale, mortgage, lease, exchange. In sale of an immovable property there are generally two parties to the transaction i.e. the Seller/Vendor and the Buyer/Purchaser. Section 55 of the Act refers to the rights and obligations of the seller and purchaser of an immovable property.

The obligations of the seller are

1.       To disclose all material defects in the property and the title to the buyer.

2.       To produce the documents of title for the verifications of the buyer on his request.

3.       To answer all relevant questions of the buyer.

4.       To execute proper conveyance deed on full payment of consideration.

5.       To take care of the property and the documents during the period between the agreement to sell and handing over possession of the property after execution and registration of Deed of Sale.

6.       To give possession of the property.

7.     To pay all taxes, charges, rents upto date and discharge any encumbrance on property prior to the conveyance of the property.

Rights of the seller

1.       To receive rents and profits of the property till its ownership absolutely passes on to the purchaser.

2.    Where the ownership has passed on to the purchaser before payment of full sale consideration, the seller will have a charge on the property for the amount of purchase money and interest on such amounts.

The obligations of the buyer are:

1.       To inform the seller any fact which may increase the value.

2.       To pay consideration amount to the seller as agreed to.

3.    Where the ownership is passed on to the purchaser, to bear the loss on account of destruction, or decrease in the value of the property not caused by the seller.

4.      To pay all taxes, charges, rents etc. where the ownership is passed on to him.

5.      The purchaser may retain the amount of any un-cleared encumbrance, out of consideration amount payable.

The purchaser is entitled to the following rights:

1.     Where the ownership is passed on to the purchaser the benefit of any improvement, increase in the value of the property, rents, profits.

2.       A charge on the property as against seller and all other persons claiming under him for the amounts paid by the purchaser along with interest.

The above referred rights and obligations of both the seller and purchaser are binding on both. But, section 55 of Transfer of Property Act provides an exception. If the parties to the deal have any contract contrary to the rights and obligations as envisaged in the Act, the contracted obligations and rights prevail to that extent.

The obligations and rights have relevance only where there is a valid binding contract of sale between the parties. In case the purchaser of property declines to accept possession of the property, he has charge on the property with regard to earnest money paid and any costs awarded to him in a suit.

The rights of the purchaser are subject to certain limitations. These rights are applicable as long as the matter is in the stage of agreement and when the deal is finalized, conveyance deed is executed; the deal will come to an end.

But the case is different where the conveyance is brought on account of fraud practiced by the vendor.It is also necessary that the purchaser shall avail himself of knowledge or means of knowledge open to him or his agents to verify the credentials of the vendor, his interest, title to the property. He has to exercise due care and diligence by exercising reasonable care and then only the purchaser can claim the protection of law for any mischief played on him.