In
recent times, dealings in real estate in Bangalore have been at the peak.
Predominant reason for this is the growth of IT sector and the eagerness of the
people to invest their money in real estates in and around Bangalore. As the
real estates require huge investments, the purchaser has to take necessary
precautions before investing his money to save himself from future
complications. If the property transferred suffers from any defect in
the title of the vendor, the purchaser does not get good and marketable title. Therefore, the purchaser has to make doubly sure before finalizing the deal, that the vendor has got a valid and marketable
title.
The
term “Marketable title” means a title which is clear and free from reasonable
doubts and is a title good against everybody.
Thus, it is the title which establishes full ownership of the vendor to
the property intended to be conveyed, without reasonable doubt. A buyer is not
bound to complete the sale if there are defects in the title to the property
which are material and latent. The defect to be material, it is to be of
such a nature that if the purchaser were aware of it he would not have entered
into the contract of sale at all.
Doubtful
or defective title:
A
title is said to be doubtful when the vendor does not have any conclusive
evidence to prove the ownership. The defects in title are generally latent
defects which can be found only on investigation of title by perusal of
documents, by an eminent advocate, carrying out
searches of Government Departments
and Municipal records and by making reasonable enquiries. The vendor is
bound to disclose such latent defects known to him.
A
title becomes doubtful:
1.Where
the doubt arises by reason of some uncertainty in law itself;
2.Where
the doubt pertains to the application of some settled principle or rule of law.
3.Where
a matter of fact upon which a title depends is either not in its nature capable
of satisfactory proof or is capable of
such proof but yet not satisfactorily
proved.
The
ownership of the vendor to the property intended to be sold, must be the property traceable from the previous title
deeds commencing from the Deed which can be considered as a good root of title
and for this purpose at least 30 years
previous title would need to be verified. The property should have already been
properly transferred from all
predecessors-in-title and no third person other than the Vendor should have any
right or claim thereto.
Thus,
for example, if ‘A’ has sold the property to B and if it is found that the
property under sale belonged to a Hindu Joint Family property and ‘A’ has sold
it neither for legal necessity nor after
obtaining the consent from Co-Parceners, then the property sold to ‘B’ is said
to be defective.
The
following are a few instances where the title cannot be termed as defective:
-An
omission to disclose a prior agreement for sale by the Vendor is not a defect
in title.
-Title
by adverse possession is marketable and not a defective title, if proper title
by such possession can be successfully made out. A title may be good although there are no Deeds but there must
have been such a long uninterrupted possession, enjoyment and dealing with the
property as to form a reasonable presumption that the title is absolute .
-Loss
of title deed is not a defect, if the loss can be explained satisfactorily.
Defect
in property:
Defect
in property is different from the defect in title. A defect in the property
only prejudices the purchaser in the physical enjoyment of the property but the
defect in title exposes the purchaser to
adverse claims. This difference has been enunciated in Section 55 (1) (a) of
the Transfer of Property Act, which provides that the vendor is bound to
disclose to the purchaser any material defect in the property or in the
vendor’s title. The defects in property are generally patent defects which can
be seen on an inspection of the property
and the Vendor need not disclose the same so long as the same does not lead to
defect in title.
Root
of title:
In
investigating title and in considering whether the title is marketable and free
from reasonable doubts, it is necessary to find out the root of the title.
Documents are considered as root of the title. A good root of title is a
document purporting to deal with the entire property conveyed, which does not
depend upon the validity of any previous instrument and without inviting any
suspicion on the title of the Vendor. It
may also be described as a document of transfer of property showing nothing to
cast any doubt on the title. An instrument, the effect of which depends on some
earlier document is considered as an instrument with insufficient root of
title. In India, there is no law which stipulates statutory period for
examination of root or commencement of title. However, it is advisable to
investigate the title for a minimum period of 30 years unless the circumstanceswarrant production of documents beyond 30 years.
Though
our law makes it obligatory on the part of the vendors to disclose the defects
in title before the sale of a property, purchasers have also to exercise due diligence and investigate the
title of the property before purchasing the same, to avoid future complications.
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