TRANSFER OF PROPERTY ACT IN INDIA
The Transfer of Property Act governs the transfer of property by any means in India. Property can be transferred by sale, mortgage, exchange, lease or gift. All such property transactions are governed by the Transfer of Property Act.
As per the Act, a sale is transfer of ownership of property in exchange for a price paid or promised to be paid. Any sale of property must be made only by a written and registered instrument like sale deed. On execution of a property transfer document, delivery of the immovable property takes place when the seller places the buyer, in possession of the property to complete the property sale transaction.
It is important to note that an agreement for sale of property does not amount to sale of property, as it does not, of itself, create any interest in or charge on the property.
Mortgage of Property
Mortgage is the transfer of an interest in an immovable property for the purpose of securing a loan or the performance of an engagement. Hence, though mortgage does not transfer the property to a third-party, it creates an interest in the immovable property. More about property mortgage laws in India.
Lease of Property
Lease of property is a transfer of right to enjoy the property, for a certain period of time or in perpetuity, for consideration paid or promised by the transferee. In a lease transaction, the owner of the property is the transferor and the tenant is the transferee. In the absence of a lease agreement, the lease of agricultural or manufacturing property is deemed to be a lease from year to year, terminable by either party with a six months notice. Lease of immovable property for any other purpose is deemed to be a lease from month to month, terminable by either party with fifteen days notice. Lease of property for any term exceeding one year or reserving a yearly rent must be made as a registered lease agreement. All lease agreements must be executed by both the lessor and the lessee.
Exchange of Property
When two persons agree transfer the ownership of a property for the ownership of another property, neither thing nor both things being money only, then the transaction is called an “exchange” of property. A transfer of property in completion of an exchange can be made only in a way provided for the transfer of such property by sale.
Gift of Property
Gift of property is when a transfer or property happens voluntarily and without consideration. In a gift of property, the person giving the property is called the donor and the person accepting the property is called the donee. All gift of property must be made by way of registered instrument signed by or on behalf of the donor and attested by at least two witnesses. The acceptance of a gift of property must be made during the lifetime of the donor and while he is still capable of giving.