Conditions for Valid Transfer of Property

Transfer of property in day-today life is very common. Transferor (owner of the property) and transferee (in whose name property is being transferred) more often perform such transactions for personal or business purpose. However, to make such transfer valid, there are certain criteria (defined under the Transfer of Property Act, 1882) that must of be fulfilled.

Section 7: Persons Competent to Transfer

Section 7 of the Transfer of Property Act sets the eligibility criteria for transferring one's property. According to the transfer of property rule, only an individual who is competent to enter into a contract with others is eligible to undertake a property transfer. Additionally, regardless of whether he or she is the real owner of the property, an individual willing to transfer it should have the authority to do so.

In addition to the above, any property transfer must be carried out by a competent person over the age of 18. The person transferring property must be of sound mind, not be disqualified by law, and not be intoxicated. Besides that, property transfer must occur between living beings (it can be an association, a company, or a group of individuals).

Section 7 of the Transfer of Property Act of 1882 states that any person competent to contract, i.e. a major and of sound mind, or who is not disqualified from contracting by law, may do so. As a result, even a co-owner's stake can be sold, mortgaged, or leased to another co-sharer or a stranger. The fact that the partition did not take place by metes and bounds does not exclude a co-owner.

A member of a Hindu joint family can alienate his part of the joint family property for consideration, according to the law, in certain areas. A concubine of this type is legally competent.

Section 8: Operation of Transfer

Section 8 of the Act states that the transfer of property passes on all interests as well as legal incidents to the transferee, as seen in the case of Biswanath Prasad Singh v. Rajendra Singh.

Land

If the property transferred is land, the following legal incidents will occur −

• All things attached to the earth

• Rent and profit arising after the transfer

• Easement attached to it

The court rejected the argument that the partnership deed was a license to operate the land in the case of Jai Narayan Mishra v. Hashmath Unnisa Begum.

In another case, Ram Chandra v. Kalyan Singh, the court rejected the seller's position that the standing trees on the land could not be transferred.

Machinery

All moveable and immovable parts of machinery must be transferred.

House or home

legal incidents related to a house include the following −

• Locks, keys, windows, and so on, all of which provide permanent use.

• Rent and profits resulting from the transfer

• An easement annexed to it.

Debt

If the property transferred is a debt, any securities associated with that debt must be transferred to the transferee.

Money

If the transferred property is money or yields money, its legal incidents must include any income and interest occurring after the transfer.

In the case of Nathoo Lal v. Durga Prasad,vthe Supreme Court reversed the Rajasthan High Court’s verdict and stated clearly that there was no difference between a male and a female when it came to inheriting the absolute estate.

Section 9: Oral Transfer

According to Section 9 of the Transfer of Property Act, property transfers can be done with an oral agreement unless the law explicitly states that a written agreement is required to complete the transaction.

In the case of immovable property valued at less than Rs 100, such transfers may be done by a registered instrument or by delivery of possession. The Karnataka High Court has stated that the first provision of property transfer overlaps the second—this means that property transfer can be made in all cases through a registered instrument. The high court has also declared that possession is enough to prove ownership of a property that does not require registration under the Transfer of Property Act's rules.

This means that practically no immovable property may be transferred into the name of another person without the performance of a written document.

Oral arrangements, however, typically work, with the exception of property partition among family members, when the family members can agree verbally to divide the property for practical purposes. For a property exchange to be legally valid, written agreements are frequently needed. This is true for sales, gifts, and leases, among other things.

Mode of Transfer

There are two modes of transferring property −

• Delivery of possession

• Registration

Delivery of Possession

Where writing is not necessary under the act, the property may be transferred orally, i.e., just by delivery of possession. Normally, movable property can be transferred by delivery of possession.

Registration

When registration is necessary, the transfer must be in writing. According to the Transfer of Property Act, the following transfers must be made only through a written deed that is officially registered −

• A gift of movable property (S. 123)

• The sale of an immovable property worth more than Rs. 100 (S.54)

• Sale of reversion or other intangible property, irrespective of its monetary value (S. 54)

• Leases from year to year, for a term extended beyond one year, or with a yearly rent reserve (S. 107).

• Simple mortgage, irrespective of the amount secured (S. 59)

• Other kinds of mortgage (except mortgage by deposit of title-deeds) if the amount secured exceeds Rs. 100 (S.59)

• Exchange of immovable property worth more than one hundred rupees (S.118)

• Transfer of actionable claims (no registration necessary; writing is sufficient) (S.130). The transfer cannot be done orally under the above conditions. Except for the transfer of actionable claims (where writing is required but registration is not required), the transfers required to be made by instruments or written deeds must also be registered.

Conclusion

For a valid transfer of property (whether it is movable or immovable), certain conditions must be fulfilled. These are the essential and necessary points for a person who is competent to transfer property under Section 7 of the Transfer of Property Act of 1882. If these conditions are not met, the transfer will not be considered valid and may be ruled void. This condition is very similar to the one mentioned in the Indian Contract Act of 1872 in terms of contract validity.

If the parties demonstrate a different purpose, whether expressly stated or inferred, an immovable transfer of property is transferred in the transferee's favor immediately on the execution of the transaction. Property is transferred on a particular date with defined conditions in this case.

Frequently Asked Questions (FAQ)

Q1. What are the two methods of transferring property?

Ans. Property can be transferred in two ways: first, by agreement between the parties, and second, through legal action. Typically, the sale deed is the only method of property transfer that the general public is aware of.

Q2. Can immovable property be gifted orally?

Ans. "The transfer of immovable property must be completed by a registered instrument signed by or on behalf of the donor and attested by at least two witnesses."

Q3. What are the operations and methods of transferring property?

Ans. There are several ways to transfer property ownership: permanently by 1) relinquishment 2) sale 3) a gift; and 4) a temporary mortgage. 5) Lease; and 6) leave and license agreement.

Q4. Who is the competent person for the transfer of property?

Ans. Every property transfer must be carried out by a competent adult over the age of 18. The individual transferring property must be of sound mind, must not be disqualified by law, and must not be intoxicated.

Q5. Who can transfer ownership?

Ans. The acquirer has the right and may transfer ownership of the property to a third party by sale, exchange, or donation, as well as mortgage the property and perform other actions without the consent of the transferor.