transfer property act 1882

Transfer of Property Act, 1882 – Information You Need to Know

The transfer of property in Pakistan is regulated under the Transfer of Property Act 1882. The transfer of property to anyone can be conditional or unconditional.

Modes of Transfer of Property

Property is transferable by the act of parties and by the operation of law. However, only the property transfer by the act of parties comes under the Transfer of Property Act 1882. The transfer can be conditional or unconditional.

The transfer of property by act of parties can happen through sales, leases, mortgages, exchanges, transfer of actionable claims, and gifts.

Transfer of Property Rights

A person can transfer the rights of a property when he is the complete owner of the property or has the legal authorization of transfer. Also, the person must be competent to make a contract. The one who transfers the rights to a property is the Transferor, and the one to whom the rights are transferred is the Transferee.

Any transfer made by the transferor to the transferee is the absolute transfer with all the rights to the property unless there are some other intentions. Besides, if the law does not require any documentation, the oral transfer of the property is enough.

Following are the transferable property rights:

  • When there is a chance of spec succession.
  • Property with mere right to take back the property given on lease in case of breach of conditions.
  • Right to use someone else’s property.
  • Personal rights to enjoy the interest on the property.
  • Right to maintain the property in the future.
  • Right to sue for damages for breach of contract.
  • Public office.
  • Right to get pensions and stipends.
  • Right to transfer property for unlawful objects.
  • Occupancy rights.

Conditions of Transfer of Property

  • Any condition that restrains a transferee from disposing of his interest after the property is transferred is void. However, the lease has an exception to this rule.
  • The transferor when creates an absolute interest for him after the transfer is void unless the benefit is to his adjoining land.
  • Condition determined for any upcoming insolvency or separation is void.

The following are the optional conditions.

  • Any condition that is not forbidden by the law to be done before the transfer.
  • Transfer of interest under the condition of happening of an uncertain event.
  • A condition after divesting an estate is subject to the rule of strict construction; the condition must be strictly fulfilled.
  • A conditional interest will cease in case of happening or non-happening of an uncertain event.
  • The transfer of property can also be done in favor of an unborn child.

Transfer of Property by Way of Sale

The Transfer of Property Act 1882 states Sale as the transfer of ownership of a property in exchange for a price paid or promised to be paid. If the tangible immovable property has a value less than Rs. 100, the transfer is done by delivering the possession of the property. In case the property has a higher value, registration of the property is necessary.

At the time of sale of property, the seller must declare:

  • material defects of the property
  • produce title deeds
  • answer any questions related to the title of the property
  • transport the property
  • do maintenance of the property after the contract is made till he delivers the property
  • pay outgoing expenses until the sale completes

After the sale completes, the seller must

  • transfer property title
  • deliver the documents of the title
  • give possession

At the time of sale, the buyer must

  • disclose that the value of the property is increasing
  • he must pay for the property

After the sale completes, the buyer

  • is responsible for any risk of loss after he receives the property
  • pays the principal and future interest on the property after he gets it

Transfer of Property by Means of Mortgages and Charges

The Transfer of Property Act 1882 states a mortgage is the transfer of an interest of the immovable property to secure the payment of money advanced or to be advanced as a loan. In contrast, there is no property transfer in case of a charge. However, it creates a right of payment out of a specified property.

The types of mortgages include

  • Simple mortgage
  • Usufructuary mortgage
  • Mortgage by conditional sale
  • English mortgage
  • Anomalous mortgage
  • Mortgage by deposit of title deeds

The Doctrine of Foreclosure or Sale

In the case of a mortgage with a conditional sale, the court directs the mortgagor to pay the mortgage money within a specific time. If the mortgagor fails to pay, the mortgagee gets the property’s right to ownership under the court’s decree. In such cases, the mortgagor cannot claim back the property from the mortgagee as he is now the property owner.

Transfer of Property by Way of Leases

The Transfer of Property Act 1882 defines a lease as a transfer of the right to enjoy the property for a specified time in return for a promised or paid price, the share of crops, or any other valuable item. Periodic, perpetual, and Bemiadi leases are important forms of lease.

There is a minor difference between lease and tenancy. In the lease, the time to rent out the property is specified. In contrast, the tenancy lasts until the tenancy is terminated.

Rights and Liabilities of Lease

In the case of a lease, the lessor is liable to

  • disclose any material defects in the property
  • put the lessee in possession
  • do no interruption to the lessee and allow full enjoyment

In the case of a lease, the lessee has the right to

  • terminate the lease if there is some destruction to the property
  • do essential repairs and deduct those expenses from the rental payment
  • make the required payments and deduct the amount from the rental payment
  • remove his fixtures
  • take benefit from the crops that he has grown on the land
  • assign his interest in the leasehold

In the case of a lease, the lessee is liable to

  • disclose the facts that increase the value of the property
  • maintain property
  • pay rent
  • notify any encroachment or interference by others
  • do not waste or injure property
  • do not build the property except for agricultural purposes
  • restore the possession of the lease when the lease terminates

Transfer of Property by Means of Exchanges

When two people transfer the ownership of one thing in exchange for the ownership of another thing when both items are not the money, it is called Exchange.

Transfer of Property by Gifts

The Transfer of Property Act 1882 defines gifts as a voluntary transfer of movable or immovable property without consideration by a person ‘Doner’ to another person ‘Donee’ that the Donee accepts. Acceptance is a must in the donor’s life when the donor is capable of giving it. In case the donee expires before acceptance, it makes the gift void.

In the case of the gift of immovable property, the transfer is effectively a registered instrument signed by the donor and attested by a minimum of two witnesses. For a gift of the movable property, the transfer becomes effective by delivery or by a registered instrument.

If the gift is for two or more donees, and the one does not accept, the gift is void to the extent of the donee’s share who refused to get it. The percentage of the gift or refusing donee reverts to the donor.

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