The Indian legal system divides property into two distinct categories: moveable and immovable. The Transfer of Property Act Bare Act came into effect on July 1, 1882, and governs property transfers between living persons.
The Transfer of Property Act Bare Act, one of the oldest statutes in the Indian legal system, is an extension of the law of contracts and runs parallel to the succession laws. For people who want to transfer their immovable property, familiarity with the Transfer of Property Act Bare Act is crucial.
What is the definition of “transfer” under the Transfer of Property Act Bare Act?
- The transfer includes transfer by way of sale, mortgage, lease, actionable claim, gift, or exchange.
- The Transfer of Property Act Bare Act does not apply to transfers by operation of law, such as inheritance, forfeiture, bankruptcy, or sale by decree execution.
- The Transfer of Property Act Bare Act is also inapplicable to the transfer of property via a will and does not address issues of property succession.
Transfer types covered under the Transfer of Property Act Bare Act
The Transfer of Property Act Bare Act describes six different forms of property transfers:
- Actionable claim
Under the Transfer of Property Act Bare Act, who may transfer property?
- Section 7 of the Transfer of Property Act Bare Act establishes the eligibility requirements for the transfer of real property.
- The section states, “Every person competent to contract and entitled to transferable property, or authorised to dispose of transferable property not his own, is competent to transfer such property, either wholly or in part and either absolutely or conditionally, in the circumstances, to the extent, and in the manner, permitted and prescribed by any law in force at the time”.
- To be qualified to engage into a contract, a person must be at least 18 years old and of sound mind, according to the Indian Contract Act of 1872.
Non-transferable properties under the Transfer of Property Act Bare Act
- According to the Transfer of Property Act Bare Act, one cannot transfer an immovable property that he or she expects to inherit in the future.
- Ram anticipates that his maternal uncle, who had no children of his own, would leave him his property. If Ram transfers his title to the property to his son, the transaction would be unlawful.
- The Transfer of Property Act Bare Act also prohibits a lessor from transferring his right to re-enter a leased property.
- Ram rents his plot to Mohan and includes a condition in the lease agreement that gives him the right to re-enter the property if the rent is not paid for three months. He cannot transfer his right to re-enter to, say, his colleague Ganesh. Ram has the right of passage over Mohan’s property. Ram makes the decision to convey this right-of-way to Ganesh. This transfer of easement rights is invalid.
- Additionally, one cannot transfer an interest in a property whose enjoyment is limited.
- If Ram is loaned a home for his own use, he cannot transfer his enjoyment right to Mohan.
- A right to future maintenance is awarded only for the recipient’s own benefit. This privilege cannot thus be transferred.
- A tenant with a nontransferable occupancy right cannot transfer or assign his rights in the tenancy.
- Similarly, a farmer whose estate has not paid its taxes cannot transfer his part in the property. The same applies to a lessee of an estate administered by a court of wards.
Transfer of property by oral agreement in accordance with the Transfer of Property Act Bare Act
- Section 9 of the Transfer of Property Act Bare Act indicates that a verbal agreement may be used to transfer property unless the law specifies that a written agreement is required.
- For transfers of immovable property valued at less than Rs 100, either a registered document or delivery of the item may be used.
- This implies that almost no immovable property may be transferred to another person without the execution of a written deed.
- With the exception of the division of property among family members, when family members may engage into a verbal agreement and divide property for practical reasons, oral agreements are often ineffective.
- Exchanges of property sometimes need written agreements for legal validity. This applies to purchases, gifts, leases, etc.
- Legal consultation must be taken to get the gift deed registered.
The Transfer of Property Act Bare Act permits the transfer of property to an unborn child
- The rules of the Transfer of Property Act Bare Act must be considered by an individual who intends to leave his property to more than one generation. This becomes necessary in order to prevent future legal issues and therefore it is suggested to get the gift deed registered by taking a legal consultation.
- The provisions of Section 13 and Section 14 of the Transfer of Property Act Bare Act prohibit the direct transfer of property in favour of an unborn child.
- For this to occur, the person wishing to make the transfer must first make the transfer in favour of a living person on the date of the transfer.
- Until the birth of the unborn child, the property must vest in this person’s name.
- Essentially, the unborn child’s interest in a property must be preceded by a previous interest.
- Consider the scenario in which Ram distributes his possessions to his son Mohan and then to his unborn grandson. If he was not born prior to Ram’s death, the transfer would be invalid. The transfer would be legitimate if the kid is born before Ram dies and the property interest vests in Mohan until the birth of the child.
The Act was enacted to develop a comprehensive Act that provides information on the transfer in a straightforward manner. At the time of its release, it was incomplete and had various unanswered questions.
The law has undergone several revision processes and has shown its effectiveness. In India, further laws, such as the Transfer of Property Act Bare Act must be adopted.