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SALE OF PROPERTY

SEC 54 and 55 Transfer Property Act, 1882

Definition of sale- a complete transfer of ownership in the property for a

consideration paid or to be paid or partly paid or partly to be paid.

Consideration may be cash, kind or partly cash and partly kind.

Essential of valid sale

Competency of the parties

Subject matter existence

Consideration price

Mode of transfer- conveyance

When the ownership is deemed to be transferred?

The time of execution or registration

CONTRACTS OF SALE

Right of the prospective purchaser

Specific performance

Right to recover price paid.

Duties of the seller

To disclose material defect in the property

Non-disclosure of the defect in the title amounts to fraud.

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To produce documents to the title to the propertyTo answer question relevant to the property

On payment execute conveyance

To take care of the property till the final conveyance.

To pay all the taxes and duties till the handover of the

possession to the purchaser.

After sale

* To deliver the property without any encumbrance.

* To get sale permission wherever necessary

After sale To deliver possession of the property

Covenant to title

To deliver title documents to the property

Right of the seller

To receive rents and profits before final conveyance

Right to charge over the property for the unpaid

consideration.

Rights of the purchaser

Any increase in the value of the property

Right to retain purchase price for the encumbrance in the

property.

Charge for the prepaid purchase money.

Claim for compensation when the seller refuses to honour

his performance.

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Duties of the purchaser

* Duty to enquire and satisfy about the title to the property.

* To bear the loss after the final conveyance

* To pay all taxes and duties after final conveyance.

In REALESTATE TRANSACTIONS TIME IS NOT THE ESSENCE

OF THE CONTRACT UNLESS OTHERWISE PROVIDED IN THE

CONTRACT.

A contract of sale of immovable property does not confer

any right, title and interest in the property to the

prospective purchaser but it is subject to the terms and

conditions agreed by and between the parties.

Basic rights over the property

Right to title

Right to posses and enjoy

Right to alienate

Sale of minors property

Sale of minors property is subject to the permission from

the court of competent jurisdiction.

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consideration

Consideration may be paid or promised to be paid on the

sale and execution and registration of a sale deed.

Insufficiency of consideration and/or non-payment of

consideration does not vitiate the sale unless otherwise

contract to the contrary.

Case law: Vidhyadhar Vs Mankikrao and another AIR 1999

SC 1441

Writing, attestation and registration are mandatory

requirements for the completion of a valid sale of property.

Once sale deed is registered the ownership pass with effect

from the date of execution of the sale deed.

In India there is not statutory period for which title to the

land should be made out. Normally in India 30 years period

for a title is considered as a reasonable one for claiming a

clear, valid and marketable title to the property.

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REMEDIES OF PARTIES TO A SALE

Rescission of contract

a. Defect in titleb. In capacity of the partiesc. Inability or delay in getting required permissiond. In ability to perform reasons beyond the control/frustration.e. Mis-representation by the opposite party

Specific performance

When the other party refuses or partly performed the aggrieved party can file suit for specific

performance of the contract.

Can claim for damages

Forfeiture and recovery of deposit

Vendor can forfeit the earnest money or deposit he has received from the prospective purchaser.

Suit for the damages

For the breach of contract or any loss the aggrieved party can file a suit for damages as mentioned in the

section 73 of the Indian Contract Act 1872.

Setting aside the sale

If the sale is vitiated by fraud, coercion, mis-representation and/or mutual mistake, the sale is liable to

be set aside.

Unpaid purchase money

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If the Vendor has not received full purchase money, he can file suit for the recovery of the balance

purchase money/consideration. Vendor has a statutory charge over the property for the unpaid

purchase money.

Rectification

When by mutual mistake or on account of fraud, the sale deed does not correctly express the intention

of the parties, it may be rectified so as to bring it into conformity with the contract.