Laws For everyday life
Sale of immovable property
Syed Gouseuzzaman Haideri Ali
Sale is a transfer of ownership made in exchange for a price paid in terms of money. Sale is provided in section 54 of Transfer of Property (T.P.) Act 1882. According to this section sale of immovable property must be completed by a registered document.
Contract of sale
Contract for sale of immovable property is a contract that sale of such property shall take place on terms and conditions as settled between the parties. It does not create any interest in or any charge on such property. According to section 54A of T.P. Act 1882 Contract of Sale must be in writing and should be duly registered according to the Registration Act 1908.
Section 55 of T.P. Act 1882 deals with rights and duties of buyer and seller.
Duties of seller
The seller shall be deemed to contract with the buyer that he has full ownership of the property, which he is transferring. Seller's title must be free from any defect. Nobody can transfer a better title than what he has. The seller is bound to disclose any material defect of the property or in the seller's title thereto. The seller should produce all the documents of title relating to the property to the buyer for examination. The seller must make proper conveyance of the property to the buyer on payment of amount due in respect of price. The seller must pay all the public charges, rents and all the encumbrances up to the date of the sale except where the property has been sold subject to encumbrances.
Rights of seller
The seller is entitled to the rents and profits of the property till the ownership is passed to the buyer. The seller is also entitled to have charge upon the property where the ownership has passed to the buyer before the payment of the whole purchase- money.
Duties of buyer
The buyer is bound to disclose to the seller any material fact which increases the value of the property. The buyer is bound to pay purchase- money to the seller at the time and place of completing the sale. After the ownership has passed to the buyer, the buyer is bound to pay all the public charges, rent, the principle money and interest occurring due on encumbrance where the property has been sold subject to encumbrance.
Rights of buyer
Where the ownership has passed to the buyer the buyer is entitled to the benefit of any improvement, increase in value of the property and the rent and profit thereof.
The buyer has the right of marshalling. If the seller mortgages his two properties to one person and then sells one of his mortgaged property to another person then the buyer has the right to have the mortgaged debt satisfied from the property which has not been sold to him. But here in any way the rights of the mortgagee cannot be prejudiced.
What buyer should do at the time of purchase
* The seller must possess valid title over his property which he is going to transfer to the buyer. So buyer should check at the time of purchase whether the seller has the valid title over the property and if his title is free from all encumbrances. So, the buyer should verify in the land office also known as Land Revenue Office to check the record of ownership and also to check whether the land tax payments are up to date.
* Buyer should obtain inspection for RS mutation. In this inspection buyer checks that the property is up to date with payments to municipality, gas, electricity and water to make sure that there is no outstanding dues payable and those liabilities do not transfer to him.
* Buyer should conduct RS mutation on property. For RS mutation, an application should be made to the Assistant Commissioner of Land with particulars of the property. Assistant Commissioner then forwards the same to the Tahsil Officer who is responsible for conducting the relevant survey and for providing a report to the Assistant Commissioner. Upon receiving a report Assistant Commissioner renders the mutation certificate.
* Buyer should get non encumbrance certificate from the relevant sub registry office. Buyer must check the status of the land whether the land is mortgaged or leased.
* Buyer must prepare the deed of transfer and pay stamp duty. A lawyer\\may be engaged to prepare the sale deed or it can be prepared by parties themselves. The deed must be prepared in a stamped paper that will cost 3% of the value of the property.
* Buyer must pay local government tax, registration fees and other taxes at a designated bank.
* Buyer should apply for registration at the relevant Sub Registry Office by presenting the receipt of payment for the registration fees. During this time an application is submitted for mutation of the property in the name of the purchaser. The Assistant Commissioner of Land will send the application to Land Officer for verification. The Land Officer will then submit a report to Assistant Commissioner of Land indicating the legality of sale of the land. Then the Assistant Commissioner will provide a certificate containing mutation Khatian in favour of the purchaser. A certified copy of the registered document is obtained for the buyer's record.
* Buyer should register the change of ownership in the Land Revenue Office. The property should be recorded under the name of the new owner who will be responsible for paying the land taxes from the day it is transferred.
Suggestions for improvement
We are suffering from back dated land laws of British and Pakistani period. Laws related to record of rights, registration, survey and mutation have to be amended and simplified to make those people -friendly.
The procedure for land registration and land management is very lengthy and complicated. These create great hardship for the parties. Therefore the procedure for land administration and land management should be simplified.
There should not be any false names in the record books. Revenue Department which deals with land related issues should be honest.
Tax payable by the parties during land registration should be reduced. Documents after registration must be given to the title holder within a very short time. Land records and registration system should be digitalized. Buyer should be allowed to pay for the income tax, stamp duty, registration fees and local government tax through one pay order and in one bank instead of many.
The writer is an Advocate, Supreme Court of Bangladesh.
