SAFEGUARDING YOUR PROPERTY RIGHTS

Advocate Selvakumar|Property Advocates in Bangalore|Senior Lawyer

Before going in an agreement for purchase, verification of title is extremely necessary. It’s not just tracing the title however conjointly examination of the genuineness of the records, identification of the property, in newspapers and physical possession of the title of the property. Clear and marketable title free from doubts and encumbrances with a right of physical possession of the seller are necessary ingredients for peaceful possession and delight of the property by the vendee.

The first and foremost step in purchase of property is that the scrutiny of title deeds before going in an agreement with the seller/vendor.The possession is derived from the title deeds and also the revenue records. The subsequent are the strategies of scrutiny:

Origin of the Property:

The origin of the property is extremely necessary to trace the title of the property. It’s otherwise known as “Root of Title”. To trace the title of the property, examination of the origin of the property up to a most amount of forty three years could also be needed in most of the cases. If someone is enjoying the property for quite thirty years, he can get title by adverse possession against the govt. as per the Limitation Act.  As per Section ninety of the Indian proof Act 1872 any document executed 30 years before is plausible to be valid.  Will, Partition, Family Settlement don't seem to be thought of as concrete origin. A number of the recent revenue records like Index of Land, Record of Rights, Phani, Survey documents are thought of as higher origin.

Subsequent Transfers:

After ascertaining the origin of the property, it ought to be followed by organized examination of later events and additional transactions in an uninterrupted and sequent manner, involving the previous homeowners and also the gift owner of the property. Here, the purchaser's advocate has got to terribly fastidiously check up on all aspects from varied legal angles on however the property was transferred from the previous homeowners to the current owner. Such a transfer could also be by possession, inheritance, settlement, will, sale, mortgage, release, gift etc., involving such intermediate parties. To induce a transparent image of rightful possession, title and interest, the advocate has got to fastidiously examine the title deeds and different supporting documents like revenue and different records. It’s conjointly necessary to verify the identity of the names of parties and their family connections and examination of the continuing involving the parties before any Court of Law and different legal forums and authorities as well as revenue authorities, if any. Whereas scrutinizing the documents, Advocates got to apply their mind and logically link the relevance of 1 document with the opposite. 

Present Status:

“Present Status” is a crucial issue to ascertain possession over a property. The advocate has got to ascertain who the current owner is and what are the title deeds and supporting documents the seller has in his possession, whether or not it's an ancestral property or self non-heritable property, United Nations agency are his legal heirs etc. If the legal heirs of the seller are major, the seller should guarantee their presence whereas death penalty the Deed of Conveyance. If they're minors, the seller has got to get the permission from the court before death penalty the Deed of Conveyance. In some cases the seller could conceal the actual fact of existence of legal heirs. Therefore, the advocate should insist upon the seller to provide either the succession certificate or the family kin tree issued by the revenue authority. Similarly, it's necessary to verify and make sure that no acquisition or requisition or the other court proceedings are unfinished before any authority. It’s conjointly necessary to seek out whether or not there exists any loan, charges, and encumbrances over the property.  

Statutory Clearance:

For finishing the sale dealing, varied statutory clearances are to be obtained from the involved authorities like Income-tax, RBI, revenue authorities, etc. just in case of purchase of agricultural land, there are varied different clearances to be obtained before death penalty the Deed of Conveyance.

The advocate should ascertain in whose name the Khatha stands, whether or not the Khathedar possesses up-to-date tax paid receipt in his name and up-to-date Encumbrance Certificate to ascertain his right, title and interest over the property. The advocate has got to check the Encumbrance Certificate covering the relevant amount, typically for a minimum amount of thirteen years to forty three years on case to case basis. an examination of Encumbrance Certificate would head to show on whether or not any quite charge has been created on the property and whether or not such an encumbrance remains subsisting or not. Municipal and different revenue authorities conjointly maintain records on in whose possession the property exists, what's the quantity of tax collectable on the property and up to what amount tax has been paid. All this could be observed from these records.

Genuineness of documents:

After completely scrutinizing the documents, the vendee or his advocate has got to crosscheck all documents with the involved revenue or different departments to confirm that the documents are real and are originated from the involved departments which they're not pretend. Within the case of buildings, it should be ensured that the seller has made the building as per sanction arrange and in step with the statutory pointers.

Identity of the property:

The identity of the property should be checked on the spot. Measurements mentioned within the documents should tally with actual physical activity of the land accessible on the property. It should even be ensured that there's no encroachment on the property. Just in case of encroachment, the activity of the accessible land should be recorded and this should be mentioned within the Deed of Conveyance. The boundaries within the schedule encompassing the property should be checked physically. Also, the vendee could build enquiries tactfully with the adjacent property homeowners concerning the possession of the property he's proposing to shop for.

Paper Notification:

Though paper notification is optional, it's perpetually better to apprise in an exceedingly leading native newspaper concerning the buyer's intention to get the property. This can be done to safeguard the interest of the vendee. Even once examining the assorted documents, the Advocate might not be ready to ascertain whether or not the property is actually free from any claim or not. A paper notification can sire response from real claimants, if any. Therefore, paper notification are of some facilitate to the vendee to form certain on the genuineness of the possession of the seller.

Physical Possession :

In the case of a vacant site, the vendee could, with the permission of the seller fence the property with wire or he could construct a compound wall and place up a sign, if necessary, to show his possession over  the property.

Even once going in an “Agreement to Sell”, the vendee will still build enquiries concerning the title. An uncertain title cannot be forced upon the vendee. Vendee isn't certain to complete the sale dealing, if there are defects within the property, material or latent, that doesn’t seem to be discernible within the normal course. A mere suspicion of fraud won't build the title uncertain and also the vendee cannot reject the title. it'd be of nice facilitate if a prospective vendee utilizes the services of an experienced advocate for a radical scrutiny of the documents on the vesting of the marketable title with the seller and genuineness of the documents who on examination of documents are in an exceedingly position to clarify to his consumer about the chance concerned within the dealing and guide him fitly therefore on save the vendee from litigations.

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PROPERTY SETTLEMENT AMONG FAMILY MEMBERS

Advocate Selvakumar|Property Advocates in Bangalore|Senior Lawyer

Settlement of property among family members and others is a mode of distributing both movable and immovable properties and has been defined under Section 2 (24) of the Indian Stamp Act and Karnataka Stamp Act. A settlement deed is a non-testamentary disposition, in writing, of movable or immovable property made

1.In consideration of marriage,

2.For the purpose of distributing properties of a Settler among his family or those for whom he desires to provide for or for the purpose of providing for some person dependent on him, or

3.For any religious or charitable purposes. 

Settlement also includes an agreement in writing to make such a disposition or where a disposition is not made in writing, any instrument recording, whether by way of a declaration of a trust or otherwise, the terms of any such disposition. The Karnataka Stamp Act has similarly defined settlement.

The essential ingredients are:

1.It is a non-testamentary disposition that is it is not a Will. As such it operates immediately on execution, whereas a Will comes into operation only after the death of its author. However, a settlement may also contain a clause for reservation of life estate. 

2.The Act specifies it must be in writing; So an oral disposition is not a settlement. 

3.There may be an agreement to make such a disposition. 

4.If it is not in writing, any record evidencing such disposition is also a settlement. 

5.There must be a settler i.e. the owner of a movable or an immovable property. 

6.There must be people that are family members or other persons who are dependent on the settler in whose favor the property is to be settled. It may be for religious or charitable purposes.

Trust Vs Settlement:

A settlement deed should not be mistaken for a trust deed. In the case of trust, the author vests the property in favor of its trustees, who manage and administer the property /properties as per the direction of the author for the benefit of third person/s called beneficiaries. The trustees will act only as per the directions of the author of a trust deed and the beneficiaries do not have any say in the management of the said properties.

However, in settlement, there is no intermediate person, like a trustee and the beneficiaries have complete control over the administration, management of the property settled in their favor and enjoy the property as absolute owners subject to the conditions of the settlement deed.

Will Vs Settlement:

Settlement deed is different from Will, since a Will is a testamentary document, which becomes operative after the death of its author, whereas a settlement becomes operative immediately. 

Another distinguishable feature is that a Will is revocable and that any number of Wills may be executed by its author in respect of a single property during his life time, though only the last Will executed becomes operative. Whereas, settlement is not revocable and after proper execution of a settlement deed, the Settler relinquishes all his rights, title and interest over the said property, subject to the terms and conditions contained in the settlement deed.

Partition Vs Settlement:

Usually partition of joint properties is mistaken for settlement. However, partition constitutes division of properties between thejoint owners as well as the division of joint interest ownership in the property. Thus, the division amounts to severance of the joint interest in the ownership of the common properties and the common property is thus divided among them. Each partner becomes the absolute owner of his share and each partner's share is subject to a pre-determined percentage, governed by either the inheritance laws or by the partnership deed as the case may be. In settlement, however, the property is owned by a third person and is settled in favor of persons who do not have any previous interest in the said property and the share of the beneficiary is as per the wishes of the settler.

Gift Vs Settlement Stamp duty-Registration:

There are marked differences between gift and settlement. Gift is not made for any consideration, whereas settlement may be for consideration. Like-wise gift may be made to any person, whereas a settlement is mostly made in favor of dependents. Also gift requires acceptance, whereas settlement does not. The gift is revocable or may be suspended as per section 126 of the Transfer of Property Act on happening of any specified event, which does not depend on the will of the donor unlike that of settlement, which is final & binding once it is executed by the settler.

Property legal opinion

Advantages:

Settlement has a very simple procedure where the properties are distributed to the dependents or for religions charitable purposes during the lifetime of the settler.This avoids future misunderstanding amongst the beneficiaries/recipients. Settlement can be made only in respect of self-acquired properties.

The deed of settlement attracts stamp duty as registration of the settlement deed is compulsory. Article 58 of the IndianStamp Act and Article 48 of Karnataka Stamp Act refers to stamp duty payable on execution and registration of settlement deeds. Since, settlement amounts to conveyance of property, the stamp duty payable is similar to that payable on a sale deed, i.e. based on the market value of the property. However, concessions are available in case of settlement made in favor of family members, i.e. Rupees One thousand as stamp duty and access of Rupees Fifty. Family members include the spouse, son, daughter-in-law and grand children of the Settler.

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TRUST PROPERTY AND LEGAL IMPLICATIONS

Advocate Selvakumar|Property Advocates in Bangalore|Senior Lawyer

Holding of property by a trustee involves varied obligations and duties on the parties to a legal instrument and these are enumerated within the Indian Trust Act 1882 that regulates the formation, and performance of the trusts, powers and duties of trusties in managing trust properties. 

Parties to a Trust

Trust is an obligation hooked up to the property thereby indicating however the property is to be used and who the beneficiaries of the trust Property are. It’s an agreement between the author of the trust and therefore the trustee i.e. the manager of the trust property and therefore the owner of the trust property. A trust could also be fashioned by someone Competent to contract, or with the permission of the court by a minor or on behalf of minor. A trust consists of over one person. The person who is that the owner of the property, who reposes confidence in another to manage the property is termed author of the trust or the settler. 

The one who manages the property as per the directions of the author of the trust could be a trustee. Each the author of the trust and therefore the trustee are parties to the document known as legal instrument that defines the objectives and functions of the trust. The establishment is termed the trust. Aside from the author of the trust and therefore the trustee/s, the party who is entitled to the advantages of the trust is termed the beneficiary, who isn't a celebration to the legal instrument. The beneficiary has the correct to insist that the trust property is to be used for his or her advantages though they're not a celebration to the legal instrument. Someone capable of holding the property may be trustee however not the govt of India. Likewise a government servant cannot be a trustee of masjid, temple, church or different non secular establishments. 

Ingredients of a Trust:

The vital ingredients of a trust are:

 (1) The objectives should make certain,

 (2) The beneficiaries should make certain and clear and

 (3) Definition of the trust property should be clear and recognizable. The trust cannot be created orally and it should be in writing punctually signed by the author of the trust. Trusts are of the many sorts. A personal trust could be a trust wherever the beneficiaries are the legal heirs of the author, or a gaggle of individual. A charitable trust is one wherever the beneficiaries area unit tidy sum of public. The trust could also be part public and part non-public. A public trust is made for relief, advancement of education, faith and different functions useful to the community at massive. 

A trust cannot be created for the subsequent functions

1.Any purpose that is verboten by law.

2.Any purpose if permissible would defeat the provisions of law.

3. Dishonorable purpose.

4.The trust that involves or implies any injury to the person, property of another.

5.The court regards the aim as immoral or opposition the general public policy. 

Creation of Trust

A trust could also be created by approach of a document known as the legal instrument. The legal instrument is mandatorily registerable beneath section l7 (b) of Indian Registration Act 1908. The taxation owed on the legal instrument is ruled by the Indian Stamp Act 1899, and falls among the powers of the State Governments. Therefore the taxation varies from State to State. The Indian Trust Act, 1882, doesn't apply to public or non-public religions endowments. Section18 of Transfer of Property Act 1882 relaxes all restrictions, just in case of properties transferred for advantage of public like advancement of data, religion, commerce, health and different allied objectives. A trustee cannot delegate his duties to a different, except clerical duties and should have the ultimate management over such delegation. 

Bailment and Trust

Often delivery and trust are confused. In delivery, there's delivery of products from one person to a different person for a few purpose and on completion of such purpose; the products got to be came back. Just in case of trust, the property is transferred in favor of trustee for the advantage of another person. In delivery, the one who received the products isn't the legal owner; however the trustee could be a legal owner of the property. 

Rights and obligations of Trustee

The duties of the Trustee shall get to be clearly defined; he ought to adjust to the terms of the legal instrument, as per the directions of the author of the trust. He must get aware of the property of the trust and take needed care regarding the genuineness and recoverability of the investments of the trust cash. The trustee ought to, shield the title of the trust property, if necessary, by instituting legal proceedings. He mustn't originate any title adverse to the beneficiary. He must exercise correct care and be impartial and will forestall wastage and convert any putrescible property to permanent or profitable in nature. He must maintain correct accounts and adopt correct investment methods. The trustees cannot commit any breach of trust, cannot go off the loss occurred due to breach of trust in one portion of the trust property against profit of another portion of trust property. Once a breach of trust is committed by one in every of the trustees, all the opposite trustees are at risk of the beneficiary for the overall loss sustained. The trustees have bound rights, like possession of the legal instrument, title deeds of the trust property, compensation of expenses, right to settlement of accounts, right to hunt the opinion of the court. 

Maintenance of Trust Properties

The trustee could lease the trust property for a amount not prodigious twenty one years while not the permission of the court, could sell the property in tons, by public auction, or by a personal contract. He may additionally sell beneath special conditions and get and sell. He has powers to create the investment of the trust property that should be in securities listed in Trust Act. Any investment aside from within the listed securities should be with the written consent of the beneficiary. He could apply the correctly of the minor for maintenance of minor with proper care and discretion. When someone accepts to manage a trust he cannot renounce it except with the permission of the court, or with the consent of all the beneficiaries.

Property Registration

Trust property cannot be employed by the trustee for his own profit, and any profit derived from out of the trust property should be transferred to the trust. It’s to be noted that the trustee cannot purchase the trust property of that he's trustee. Even his agents cannot get a similar. Further, trustee or his agent cannot get the beneficiaries interest and can't be a creditor, renter of the trust property while not the permission of the court. Equally co- trustees cannot lend among themselves. 

If a trustee legally sells the trust property, the beneficiaries have a right to follow the trust property goodbye it's derived all the same the intermediate possession except just in case of bonfide sale for worthwhile not the notice of the trust.

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