The
sale of immovable property throughout India is controlled by the Transfer of
Property Act, 1882. It is commonly referred to as TOPA.
“Sale”
is generally understood as a change of ownership, in return for consideration.
The law
also explains “Immovable Property” to include land, any benefits that arise out
of the land, things that are permanently affixed to either the Earth or
anything that is attached to it. Additionally, TOPA effectively states that
Immovable Property excludes grass, growing crops and standing timber.
Essentials
of a Valid Sale –
To
understand the necessities of constituting a valid sale, a simple illustration
is shown: Ms. Pooja Kumar wants to sell her residential apartment flat in Uttar Pradesh and advertises in
newspapers for the same, inviting interested parties to approach her and
finalise the sale.
For the
sale to be effective, it is necessary to follow the below mentioned conditions
laid down in TOPA:
1. The
seller must be competent to transfer – This literally
indicated that the seller should be:
(i) Competent
to contract under S 11 of the Indian Contract Act,
(ii) Entitled
to transferable property, OR
(iii) Have
the authority to sell off the transferable property which is not hers.
In
this case, Ms. Kumar being the owner is allowed to transfer it if she is
capable to contract.
2. The
buyer must be a person competent to be a transferee – The
buyer may be any living person who is not disqualified to be a transferee under
S 6 of the Act.
3. The
subject matter must be transferable immovable property –
For a property to be considered for sale, it should comply with the provisions
of S 6 of TOPA. In this case, the residential apartment flat in Uttar Pradesh that Pooja wants to sell is free of any
constraints and can be sold.
4. There
must be transfer of ownership – The
sale is affected only when the ownership is transferred to the buyer. In our
illustration, after Ms. Kumar finalises a buyer, she has to transfer the legal
title of the immovable apartment.
5. The
transfer must be in exchange for a price – While
selling immovable property, the transaction can only be completed if a price is
decided for it.
6. The
price must be paid or promised or partly paid and partly promised – When
the sale is executed, either the agreed price should be paid, or promised to be
paid or be halfway between both, to consider it as a valid sale. If the
property is transferred without a price, it is called a gift. Thus Pooja should
have either received the price or agreed to receive it at a later date.
7. There
must be a registered conveyance deed in case of –
(i) Tangible
Immovable Property costing Rs. 100 or more, OR
(ii) A
reversion of an intangible thing of any value
In
this case, the sale of the flat should be registered by a conveyance deed.
8. In
the case of tangible immovable property of a value less than Rs. 100, there
must either be –
(i) A
registered conveyance, OR
(ii) Delivery
of Property
This
point does not apply to our current example, as the value of the property in
consideration is more than the minimal limit.
