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Everything About Property Law in India

Property law in India has been a source of concern for every government as it affects everyone in society—wealthy or poor. It oversees the connections between members of society about tangible and immaterial objects.

Property law in India refers to the ideas, norms, and procedures that govern the resolution of property disputes and the structuring of property transactions. It differs from other laws as it deals with the connections between and among members of a society about items like a factory or diamond ring and intangible things like stocks and bonds or a bank account.

In India, property law has undergone several modifications since its formation. Property law is related to the distribution, use, and transfer of property. This property can be in any form, tangible or intangible, movable or immovable, etc.

Background of Property Law in India

As the government attempted to implement its land reform ideology to abolish the zamindari system—the Property Law in India and Property Rights always provided a barrier. A feudal-style agricultural framework resulted in vast patches of land invested in a few hands.

The concepts of English Law, Equity, and Property Law ruled the laws concerning the property—the Acts and Regulations that the Governor-General-in-Council passed. The Indians had to rely on the Anglo-Indian courts because there was no clear statutory provision. The courts made their decision based on their interpretation of justice.

As a result, it turned out to be a confusing and contradictory situation. A law commission was established to draft a statutory law to address property-related issues in India.

What is Property Law?

The term “property” refers to everything lawfully owned, and all properties can be divided into two categories—Real and Personal.

  • Real property refers to land, including properties like houses, garages, commercial buildings, sometimes even trees or forests, and land laws.
  • Personal property refers to items that one owns and that are transportable, such as an automobile, household items, etc.

Property law in India is the legislation that governs many aspects of property ownership in the country. Property law governs the forms of ownership with the terms and conditions of that ownership, and it applies to tangible and intangible assets.

The law applies to everyone in a community and is a crucial component of land, family, and municipal law.

Types of Property law in India

Some of the property law in India includes the Transfer of Property Act of 1882, the Partition Act of 1893 and the Indian Succession Act of 1925.

Transfer of Property Act, 1882

The English law and equity principles controlled the rules before the enactment of the Transfer of Property Act.

The Transfer of Property Act, 1882 governs the property transfer in India, and it went into effect on July 1, 1882. It includes legislation and guidelines for property transfer.

The Transfer of Property Act defines “transfer of property” as an act whereby a person transfers property to another person, where the person can be an individual, an association, a business, or a group of people, and the property passed can be both movable or immovable.

Features of Transfer of Property Act,1882

  • The Act introduced a uniform and clear legal framework for transferring movable property from one person to another person.
  • The Transfer of Property Act was enacted as an expansion to the Indian Contract Act of 1872 concerning matters related to the transfer of properties.
  • It is not the same as the English transfer of property laws.
  • The act does not cover all aspects of the transfer of immovable property; it does cover the transfer of immovable property as an activity of the parties.
  • The concurrent list governs property transfer, giving both the state legislature and the parliament the authority to create legislation.
  • The act regulates the following five categories of immovable property transfers:
    1. Mortgage
    2. Gift
    3. Sale
    4. Actionable Claims
    5. Lease
  • Unlike personal laws, which vary from person to person, the Transfer of Property Act is a statute that imposes lex-loci on all people who live in that jurisdiction.
  • Justice, equity, and conscience are among the principles underlying the Transfer of Property Act.
  • The states of Bombay, Punjab, and Delhi had their property laws at the time of adoption, the act didn’t apply to them at first.

Types of Transfers in the Transfer of Property Act of 1882

  1. Sale: Ownership of immovable property is transferred from the buyer to the seller. The buyer receives tangible property from the seller.
  2. Mortgage: The property is mortgaged to finance a loan and is transferred from the buyer to the seller in the form of a mortgage. To free the immovable property from the mortgage, the mortgagor must pay the interest.
  3. Lease: There is no transfer of ownership; instead, possession of the property is transferred from one person to another for a fixed fee.
  4. Exchange: An exchange of property occurs when two people agree to transfer immovable property.
  5. Gift: According to property law in India (Transfer of Property Act) gift is a transfer of moveable or immovable property from one person to another.

Partition Act,1893

The Partition Act was enacted in 1893 to authorise the court to order property sale and distribution of proceeds if property partition cannot be done for a reason.

The Act specifies that in the event of a disagreement between two shareholders. The terms of the Act also address a family member’s right to purchase the portion of a stranger who is suing for partition.

Indian Succession Act,1925

The Indian Succession Act covers two types of succession: testamentary and intestate succession.

Testamentary succession occurs when a person creates a written document called a “Will” that specifies who will inherit his/her property after his/her death.

If no written instrument exists, the deceased’s assets will get dispersed according to his/her religion, which is known as Intestate Succession.

Ownership

The term “ownership” refers to a person’s right and ownership of a piece of property. An owner will have the possession right, use, access, and transfer of the property and the right to earn rent from it. A property owner can gift or sell his or her property.

A sale deed, or any document in which ownership rights are transferred, is a document that establishes a person’s ownership of a property.

Property rights can get transferred by executing or registering a sale deed in the buyer’s favour.

If the sale deed is not registered, the transfer of title of the property is void. The transfer of title in favour of the new owner requires registration in the seller’s name by the person transferring property. Registration is completed after paying the requisite stamp duty, which varies by state.

Types of Property Ownership

  • Sole Ownership: When a property is purchased and registered in a single person’s name, that person is the only property owner. The term “sole ownership” or “individual ownership” are used interchangeably for this type of property ownership.

    Even though other parties helped the owner secure cash for the property purchase, they do not have any rights to the property when the sale deed is solely registered in the name of the major buyer.

  • Co-ownership: The immovable asset is joint ownership when it is registered in the names of many people.

    Joint owners or co-owners of immovable property possess the title to the property in such ownership.

  • Ownership by Nomination: Nomination is a method through which a property owner can appoint someone to inherit his property and other assets if he dies.

    Property nomination has also been prevalent among property owners, as it permits the landlord to ensure that the property is not left unclaimed or exposed to dispute after his death.

Conclusion

From an economic perspective, property law in India is the essential common law since well-defined property rights are necessary for market trade and investment. Property law assigns and safeguards property rights to provide a stable backdrop for economic activity.

One of the property law in India—the Transfer of Property Act, was introduced to create a comprehensive Act that provides information about the transfer in a very simple language; however, at the beginning of the procedure, it was not complete and contained numerous uncertainties. It has gone through various amendment processes, and the act has proven its effectiveness from time to time. Hence, the Transfer of Property Act is one of India’s major pillars established for enacting property laws.

FAQs on Property Law in India

In the Transfer of Property Act, how many different forms of transfers are there?

There are five types of Transfers under the Transfer of Property Act - Sale, Mortgage, Lease, Exchange and Gift.

Which type of property can be transferred under the Transfer of Property Act?

The Transfer of Property Act allows for the transfer of any movable property.

What forms of property ownership are there?

Sole Ownership, Co-Ownership and Ownership by nomination

What are Real Property and Personal Property?

Real property refers to land, which includes things like houses, garages, commercial buildings, and sometimes even trees or forests, as well as land laws. On the other hand, personal property refers to items that one owns and that are transportable, such as an automobile.

What are the benefits of conducting a property search?

A property search must be conducted to determine whether the property to be purchased has a clean title and is free of any charges.

About Author

I am a law final year student and an aspirant for Company Secretary (CS) who is keenly interested in Company law and other commercial laws.

I have cracked the first level of the CSEET exam & also I have written a couple of research papers, articles, and blogs few of them got published.

I have worked under a few law firms and gained practical experience in the field of company law, civil law, and criminal law. In my previous internship, I assisted different company & consumer disputes and helped the counsel in researching and drafting.

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Real Estate Law