Real Estate

Every document of transfer of an immovable property by way of sale, mortgage, or lease would be preceded generally by an agreement for sale, mortgage or lease. In fact, every deed is based necessarily upon a contract.

The main steps preceding the completion of a transaction of sale (and even of mortgage or lease) are – (i) settlement of the terms of the deal between the parties particularly relating to the consideration and the property to be transferred, (ii) preparation and execution of the agreement, and (iii) investigation of title of the transferor to the property. After the title is investigated and it is accepted by the transferee as marketable, the document of transfer is prepared, approved and signed.

Types of Sale Deed

• Agreement for sale of freehold property
• Another form of Agreement for Sale of free hold property
• Agreement for sale of leasehold property
• Agreement for sale of plot in a development layout
• Agreement of Sub Sale
• Assignment of an Agreement for Sale
• Lockout Agreement
• Agreement for right of Pre-emption
• Particulars and Conditions of Sale by auction of Immoveable Property
• Deed of Conveyance of Freehold Property
• Deed of Conveyance (Where consideration is payable by installments)
• Deed of Conveyance Subject to mortgage
• Deed of Conveyance of the Reversion
• Deed of Conveyance Subject to Right of Way
• Deed of Conveyance by a Mortgagee
• Deed of Conveyance in favour of a Mortgagee
• Deed of Conveyance of an interest in property
• Deed of Conveyance of a part of the building
• Deed of Conveyance of a property exclusive of a flat or floor in the building
• Deed of Sale of a Plot of Land in a layout
• Deed of Conveyance of a building with four flats to four purchasers as tenants in common
• Deed of Conveyance of a flat in a building on a apartment ownership but without a condominium
• Deed of Conveyance by a legal guardian of a minor
• Deed of Conveyance by a lunatic through his Legal Guardian or Manager
• Deed of Conveyance by the Official Liquidator of a Limited Company (in liquidation)
• Deed of Conveyance by an Administrator of the estate of a deceased person
• Deed of Conveyance (a sample of English Practice)

Agreement to sell

The Maharashtra Ownership Flat Act 1963, under section 4, such an Agreement is now required to be in the prescribed form and must be registered under the Indian Registration Act, 1908. The provisions of this section are mandatory. Therefore, unlike an agreement for sale of immoveable property under section 54 of the Transfer of Property Act. An Agreement of sale of a flat between a promoter (which includes a developer or builder or even the owner of the land) and the flat purchaser (i) must be in writing (ii) must be in the prescribed form as far as possible and (iii) must be registered.

Section 4A of the Act of 1963 which provides, that even if it is not registered it may be received as evidence of a contract in a suit for specific performance, or as evidence of part performance or as evidence in any collateral transaction. This form of the agreement is also supposed to be the form of agreement for sale of flat on apartment basis under Maharashtra Apartments Ownership Act, 1971 with necessary modifications consistent with that Act. The agreement as well as section 4(1A)(a)(iv) of the Act require the price of the flat and the proportionate price of the common areas and facilities separately mentioned. Similarly, section 4(1A)(a) (vi)(vii)(viii) and (x) require that the Agreement should provide as to the nature, extent and description common areas and facilities and percentage of undistributed interests in common areas and facilities to be stated.

A Transfer of Property Act 1970, section 5(2) provides that each apartment owner also shall execute the Deed of Apartment in relation to his apartment.

A deed of apartment is actually a deed of conveyance or lease or sub lease by the owner or owners in favour of the Apartment owner in respect of his apartment together with his proportionate share in the common areas and facilities. However, This only means that the Deed of Apartment will be executed both by the owner or owners of the land on the one hand as transferor or vendor and the apartment owner on the other hand as transferee or purchaser. If the building is constructed through a developer he may also be joined as confirming party though it is not so required by the Act. This is clarified by rule 5 of the rules under this Act. The definition of ‘Apartment Owner’ in section 3(b) shows that the apartment can be taken by one or more person jointly. The form of the Deed of Apartment is not prescribed but the main contents thereof are prescribed by section 12 of the Act and rule 6 under the Act. They are (a) description of the land (b) description of the apartment (c) user of the apartment (d) the percentage in common areas and facilities (e) any other details which the parties may deem desirable. Rule 6 also prescribes that the annexure will be the floor plan and the architect’s certificate regarding areas of the apartment etc. It is submitted that as a Deed of Apartment is actually a transfer of the apartment by way of sale or lease, the deed should contain all usual provisions of a deed of conveyance or a deed of lease which are not inconsistent with any of the provisions of the Act and the rules.  The common areas and facilities are given in section 3(f) of the Act.

A gift is defined in section 122 of the Transfer of Property Act as a transfer of certain existing moveable or immoveable property. The essentials of a gift therefore are (a) transfer of an existing property by the owner to the donee (b) it must be made voluntarily and without consideration (c) it must be accepted by or on behalf of the transferee (d) acceptance must be during the life of the donor and while he is still capable of giving and before the death of the done.

Where in a case a deed of gift of immovable property was executed by the donor in favour of the done without any condition but by a simultaneous agreement executed. A gift is being voluntary and without consideration the question of an agreement being entered into between the donor and the donee.

Types of Gift Deed

• A permanent Gift
• A conditional or revocable Gift
• Mortis Causa.

Release is also a specie of transfer of property. A release in fact may amount to a conveyance or a gift or an exchange. If a person releases his vested right or interest in a property for a consideration, it is nothing but a conveyance or sale. If he releases his vested interest without consideration but only for natural love and affection it will amount to a gift. If he releases his interest in one property in favour of another in consideration of that other person releasing his interest in another property in favour of the former, the transaction is nothing but an exchange or partition. The description ‘release’ is applied when the transfer is not of the whole property but only of an interest in it and that also in favour of another who is also interested in the property and is not a stranger. The expression ‘release’ is also used in case of a document by which one person gives up his right of action against the other or gives up an intangible right like a right of easement and not a right in property.

Types of Release Deed

• Mutual Releases (General Clause)
• Release of an interest in Immoveable Property
• Release of a share for Consideration
• Release of a claim for maintenance
• Release of a life estate
• Release of a legacy
• Release of Executors by residuary legatee
• Release of an easement
• Release of a restrictive covenant in a lease
• Release of trustees on distribution of trust property
• Release of a guardian by his Ward
• Release of contractor from his contract
• Release of a debtor by creditor

This deed is usually executed when there is some mistake in the main deed executed by the parties thereto. Sometimes the area, survey numbers are not properly mentioned. There may be also mistakes in the names of the parties, the figures of the price paid, or omission of some essential words or sentences and so on. Sometimes the main document does not reflect the intention of the parties correctly. In such a case the parties to the main deed can execute a deed of rectification rectifying the mistakes committed in the main document.

Transfer of Property Act Section 105 defines a lease as a transfer of a right to enjoy such property made for a certain time, express or implied, or in perpetuity in consideration of a price paid or promised or of money, a share of crop, service or any other thing of value to be rendered periodically or on specified occasions to the transferor by the transferee who accepts the transfer on such terms and refers to transfer of a right to enjoy i.e. right to the usufruct  and not possession.

Lease is also a specie of transfer of immovable property, while a sale is an absolute transfer of property, a lease is a partial or limited transfer of property. A lease therefore, is a transfer of property with a right to the transferee that is the lessee, to enjoy the same that is to make use of the same, for a fixed period or even in perpetuity in consideration of some price or premium and or in consideration of the payment of rent in the different forms mentioned in the section.

It may be stated that in the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, the word tenant is defined to mean any person by whom or on whose account rent is payable for any premises.

Therefore as a Lease is a transferable and heritable interest in property and as section 15 of that Act (now 26 of the Maharashtra Act of 1999) puts a prohibition on transfer of tenancies, it appears the transfer of leases for long periods has been excluded from the mischief of that section by Government Notifications issued under that section.

Types of Lease Agreement

• Agreement for letting furnished dwelling house or flat on short period tenancy
• Agreement to lease for a long period
• Agreement for Building Lease
• Deed of Lease for a term of years
• Deed of Lease for a term in Perpetuity
• Deed of Lease for Life time of the Lessee
• Deed of Building Lease
• Deed of Lease by Tenant Ownership Co-operative Housing Society to its members
• Lease of a floor members
• Deed of Lease of space for advertisement
• Mining Lease for quarrying stones
• Deed of Lease for Plantation
• Agreement of Lease of an Orchard
• Deed of Sub-Lease or under Lease
• Agreement to Modify Lease
• Deed of Assignment of Lease
• Deed of surrender of Lease of the whole property
• Deed of surrender of Lease of a part of property
• Deed of surrender of a part of the Premises in consideration of grant of Lease of some other Premises
• Agreement for splitting up of lease

Section 52 of Indian Easements Act, 1882 ( No. V of 1882) defines a license as follows – “Where one person grants to another or to a definite number of other persons, a right to do, or continue to do in or upon the immovable property of the grantor. Something which would, in the absence of such right, be unlawful and such right does not amount to an easement or an interest in the property, the right is called a license.

Licensee Agreement is a document which is also related to immovable property and is one of the documents that can be a subject matter of conveyance. In fact, an agreement of leave and license is very much a common document in practice. A license which is the subject matter of this chapter should be distinguished from a license which is issued either by the Government or any local or other authority to conduct a business, to produce an article, to sell any article etc., such licenses are permission to do a particular thing. Such license cannot be the subject matter of conveyance. The license referred to here is the permission to use any premises either for residence, business or storage. It is essential related to immovable property.

Types of Leave and License Agreement

• Leave and License Agreement
• Leave and License Agreement to a Company for residence of its officers
• Leave and License Agreement in respect of a part of the premises
• Agreement of License of Godown for storage
• License of Premises for holding a trade exhibition
• License to Occupy Premises
• Agreement for Leave and License (for commercial use)

The Law of Property Act, 1925 of Section 126 provides that if a Power of Attorney given for valuable consideration is expressed to be irrevocable. A Power of Attorney is one of the documents which play an important role in conveyancing. Power of attorney is a document of agency. It is a document whereby the principal appoints an agent to do and execute several acts and deeds for and on behalf of the principal. As stated by Butterworth, a Power of Attorney is a formal arrangement by which one person (Donor) gives another person (the Attorney) authority to act on his behalf and in his name.

And the same shall not be revoked at any time either by anything done by the donor of the power without the concurrence of the donee or by the death, disability or bankruptcy of the donor of the power. Section 127 of the Act provides that if a power of Attorney whether given for valuable consideration or not, is for a fixed period, not exceeding one year, it cannot be revoked during the period without the concurrence of the donee or by the death, disability or bankruptcy of the donor.

Power of Attorney Act, 1971, Sub-section (2), section 4(1) of the English Power of Attorney Act, 1971 provides that where a power of Attorney is expressed to be irrevocable and is given to secure a proprietary interest of the done of the power or the performance or an obligation remains undischarged.

Revocation

A Power of Attorney can be revoked or would stand revoked if (i) it is revoked by the principal, unless it is irrevocable, (ii) if the principal dies or becomes of unsound mind (iii) if the business of the agency comes to an end or (iv) if the principal is adjudged insolvent.

Types of Power of Attorney

• General Power of Attorney
• Special Power of Attorney for admitting execution
• Power of Attorney to collect debts
• Power of Attorney to sell shares
• Power of Attorney to execute a deed of sale
• Power of Attorney to prepare a layout and sell plots
• Power of Attorney to raise moneys and mortgage property
• Power of Attorney to recover rents
• Power of Attorney to obtain letters of administration
• Power of Attorney by a Company to its Branch Manager
• Power of Attorney by the Partners of a firm to one of them
• Substituted Power of Attorney
• Power of Attorney to execute a document
• Power of Attorney for Doing Ministerial Acts Relating to Development of Property in favour of Developers
• Power of Attorney for development of Property by the owner

Section 58(a) of the Transfer of Property Act defines “Mortgage” as follows : “A mortgage is a transfer of an interest in specific immoveable property for the purpose of securing payment of money advanced or to be advanced by way of loan, an existing or future debt or the performance of an engagement which may give rise to pecuniary liability.

Like a deed of conveyance or sale, a mortgage is also a transfer of an immoveable property or an interest in such property, but the difference between the two is that the former is an absolute transfer of the property or any interest therein while the latter is a limited transfer, limited to or for a particular purpose.

The object or purpose of a mortgage is to secure a debt in the present or to be incurred in future.

A mortgage must be distinguish from a pledge or pawn or hypothecation.

Mortgage by Deposit of Title Deeds

The definition of a mortgage by deposit of title deeds contained in section 58 (f) of the Transfer of Property Act.

Re – Conveyance and release

The other two documents relating to mortgage are deed of re-conveyance and deed of release. In effect and substance both the documents are the same. They have the purpose and effect of extinguishing the mortgage or charge and reverting the property to the mortgagor, free from the mortgage or charge.

A deed of re-conveyance or release is a simple document. The parties are the mortgagee and the mortgagor. The recital refers to the deed of mortgage and the repayment made.

Registration – All the above documents, except an agreement to mortgage, require compulsory registration under the Registration Act 1908.

Types of Mortgages under the Indian law

• simple mortgage,
• English mortgage,
• Mortgage by deposit of title deeds or equitable mortgage,
• Usufructuary mortgage
• Mortgage by conditional sale, and
• Anomalous mortgage (see section 58(b) to (g) of the Transfer Property Act.