This article is written by Ankita Negi & this article discusses the concepts of property, and the introduction of the Transfer of Property Act.

Introduction

Everything around us, whether it is tangible or intangible, which gives some value to human beings and becomes a source of income, is termed as property. For example, land, shares, and buildings. However, this is the basic meaning of property, and in legal terms, it means something different.

There are laws in every known legal system that address how people relate to one another regarding material possessions. However, the remarkably diverse array of property systems observed in non-Western countries implies that any notion of property other than the descriptive one is culturally specific. Property law must take into account the politics, family structure, and economics of the society it is applied to because it deals with the distribution, utilization, and transfer of wealth and wealth-related objects.

The word property in legal terms refers to a person who has legal rights. They have the right to possess, the right of exclusion, the right to dispose of the property, the right to evaluate, and, moreover, the right of an owner. It includes both proprietary and personal rights of a person in their property.

Types of Properties

• Corporeal and Incorporeal Property:
  • Corporeal property includes materialistic things such as buildings, lands, and jewelries.
  • Incorporeal property includes non-materialistic things such as rights of easement and copyrights.
• Movable and Immovable Property:
  • Movable property includes any corporeal property which is movable.
  • Immovable property includes anything that is attached to the land or is fixed to it.
• Private and Public Property:
  • Private property includes those properties that are owned by an individual with legal rights.
  • Public property includes those properties that are run by the government and are beneficial to the public.
• Real and Personal Property:
  • Real property includes property that is recognized by law.
  • Personal property includes properties that have all other proprietary rights, whether it is a right in rem or in personam.

What is Property Tax?

Each person who owns a property is entitled to pay property tax. It is liable on tangible assets only. It is charged annually, imposed on the property, and collected by the local government or municipal corporation. Property tax can be paid either online or manually.

The Property Tax Department is one of the NDMC departments responsible for collecting taxes. Revenue is generated through property taxes from about 13,500 private and public assets built before January 26, 1950, and service fees from government properties built after that date.

Introduction to the Transfer of Property Act, 1882

Property is very valuable in human lives, not just in terms of money and possessions but also in terms of emotional value. It instills a sense of monetary worth and provides a sense of stability and security. However, for various reasons such as a gift deed, people occasionally need to transfer these properties to another person. It is usually recommended to handle property-related matters under the guidance of legal counsel.

According to Section 5 of the Transfer of Property Act, 1882, when a person transfers the property to one or more persons, it is considered a transfer of property. For example, if the owner of a car desires to sell it to another person, the action of the owner will be considered as the transferring of property. Property can be transferred by individuals as well as by companies. In this act, the lessor is the one who transfers the property to another individual known as the lessee.

Types of Property Transfer under the Transfer of Property Act, 1882

• Sale:
  The sale deed is executed and filed with the district sub-registrar in accordance with the Transfer of Property Act. The purchaser has certain privileges, as the buyer now has ownership rights. This transfer is "absolute" and cannot be reclaimed.
• Lease:
  Section 105 of the Transfer of Property Act defines a lease as the temporary transfer of real property for a predetermined sum of money, with the recipient agreeing to the conditions of the agreement.
• Mortgage:
  As per Section 58(a) of the Act, a mortgage is defined as the transfer of an interest in particular immovable property to secure the repayment of money advanced, a loan, or an outstanding debt.
• Exchange:
  When two people decide to swap ownership of one item for another without using money, this is called an exchange. Exchange is defined under Section 118 of the Transfer of Property Act, 1882. Only the exchange of immovable property is covered under this act.
• Gift:
  Section 122 of the Act defines a gift as the voluntary and unrequired transfer of certain existing moveable or immovable property from one person (referred to as the donor) to another (referred to as the donee), which is accepted by or on behalf of the donee.
• Actionable Claim:
  Section 3 of the Transfer of Property Act states that any obligation that isn't backed by a mortgage, pledge, or hypothecation is considered an actionable claim.

Key Elements of the Transfer of Property Act, 1882

• Delivery of Possession:
  It is important that the transferor must extend the property to the transferee. This is essential for the validity of the transfer and to be legally recognized.
• Capacity of Transfer:
  The Transfer of Property Act designates that the transferor must have mental stability, have attained the age of majority, and should not be legally prohibited from transferring the property.
• Mode of Transfer:
  The Act specifies that the mode of transfer should be through sale, gift, mortgage, or lease. Any other modes will not be considered as valid transfers.
• Registration of Documents:
  The Act requires that the transfer of property should be documented and registered with the significant authorities.
• Performance of Contract:
  Legally speaking, the transferor must abide by all conditions of the agreement, including giving up custody of the goods, making any necessary payments, and supplying any required documentation.

Section 58 of the Transfer of Property Act, 1882

Section 58 of the Transfer of Property Act, 1882 talks about the indubitable rights of the lessee. The lessee's claim to the leased property is unaffected if the lessor transfers the property in the exercise of his legal right. If the lessor transfers the leased property without the lessee's permission, the lessee can pursue reimbursement from the lessor.

A mortgage on immovable property is a complex process used to obtain a loan secured by property. To release the property from the mortgage, the mortgagor must pay the principal plus interest. This process involves significant legal documentation and is considered a major financial decision.

Case Law: Cooper v. Cooper

• Vera and Harold Cooper got married in 1993 and had two children. After their legal separation, a settlement was reached where Harold removed tools and shop equipment, and Vera took the family’s car and house. Harold had four policies, and Vera was the beneficiary. The court granted their divorce.
• Vera remarried, and Harold married Ira. After their marriage, Harold gave three policies to Ira as the beneficiary. The fourth policy was left unsigned by Vera before her death.
• The question arose: Does Vera’s family have any claim to the property?

Court’s Judgment:
At the time of Harold's death, Vera had no interest in the policies because, according to the terms of the divorce decree, Harold’s obligation to provide for her ended upon her remarriage, and the children's interest in their father's estate was limited to what was necessary for their support before they became adults. This case highlighted Section 35 of the Transfer of Property Act, 1882.

Conclusion

Property has existed since the dawn of human society and has undergone significant changes over time. The concept of property law is dynamic and continues to evolve due to ongoing studies in this area. The Transfer of Property Act, 1882, plays a vital role in defining and regulating the transfer of property, ensuring legal clarity in various types of transfers, and protecting the rights of both transferors and transferees.

References

• Shodhganga - Chapter 5
• FK Link Notes on Transfer of Property Act
• Saxena, P.P. (2017) Property Law. Gurgaon, Haryana, India: LexisNexis.