The process of buying and selling property involves certain rights and duties that must be fulfilled by both parties to ensure a legally valid and smooth transfer of ownership. Section 55 of the Transfer of Property Act, 1882, defines these rights and duties, which are categorized into before the sale and after the sale. These provisions apply unless there is an express contract stating otherwise.
Duties of the Seller
- Before the Sale
Before the transfer of ownership is completed, the seller has the following legal duties:
- Disclosure of Defects: The seller must inform the buyer about any hidden material defects in the property or defects in the title. [Section 55(1)(a)]
- Providing Title Deeds for Inspection: The buyer has the right to inspect all title-related documents, and the seller must produce them. [Section 55(1)(b)]
- Answering Questions About the Title: The seller is required to answer all relevant queries about the ownership and legal status of the property. [Section 55(1)(c)]
- Executing the Sale Deed: The seller must properly execute the conveyance document to transfer ownership to the buyer. [Section 55(1)(d)]
- Maintaining the Property and Title Deeds: Until the sale is completed, the seller must take care of the property and its documents. [Section 55(1)(e)]
- Paying Government Dues and Charges: The seller is responsible for clearing any pending taxes, rents, or other public charges before the sale. [Section 55(1)(g)]
- After the Sale
Once the sale is finalized, the seller has additional obligations:
- Delivering Possession: The seller must ensure that the buyer gets physical possession of the property. [Section 55(1)(f)]
- Guaranteeing Title: The seller is bound to legally covenant that the title of the property is clear and will remain undisputed. [Section 55(2)]
- Handing Over Title Deeds: After receiving full payment, the seller must deliver all title documents to the buyer. [Section 55(3)]
Rights of the Seller
- Before the Sale
- The seller has the right to enjoy all rents, profits, and benefits of the property until the ownership is transferred. [Section 55(4)(a)]
- After the Sale
- If the buyer has not paid the full purchase price, the seller has a right to recover the unpaid amount by enforcing a charge on the property. [Section 55(4)(b)]
- This charge can be enforced through Section 100 of the Transfer of Property Act by filing a suit against the buyer. However, the charge is not applicable against a subsequent purchaser who bought the property without knowledge of the charge.
- The charge in favor of the seller is considered an unsecured debt, which can be transferred to a third party.
Duties of the Buyer
- Before the Sale
The buyer must fulfill the following obligations before ownership is transferred:
- Disclosing Material Facts: If the buyer is aware of any facts that increase the property's value, they must inform the seller. [Section 55(5)(a)]
- Paying the Purchase Price: The buyer must pay the agreed price within the stipulated time. [Section 55(5)(b)]
- After the Sale
Once the sale is complete, the buyer assumes additional responsibilities:
- Bearing Any Losses to the Property: If any damage occurs to the property after the sale, the buyer is responsible for it. [Section 55(5)(c)]
- Paying Government Charges: The buyer must pay taxes, revenue, and other government dues after taking possession. [Section 55(5)(d)]
Rights of the Buyer
- Before the Sale
- If the buyer has already paid the purchase price but the sale does not go through due to the seller’s default, the buyer has the right to recover the amount with interest. [Section 55(6)(b)]
- This right can be enforced against the seller and any subsequent buyer who acquired the property from the seller.
- After the Sale
- Once the property is transferred, the buyer gains full ownership and all benefits of the property, including the right to possession and profits. [Section 55(6)(a)]
Conclusion
The Transfer of Property Act ensures a fair and transparent process in property transactions by clearly defining the rights and duties of both buyers and sellers. The seller is responsible for disclosing defects, ensuring a proper title, and transferring possession, while the buyer must pay the agreed price and take on the responsibilities of ownership after the sale. These legal provisions protect both parties and ensure that property transactions are carried out smoothly and without disputes.
