Introduction

Today, you're a real estate attorney! Sunny Leone and her three sisters are selling their family home. It's
been in their family for almost a century and changed hands within their family many times. They've
hired you to help them because this will be the first time it will be owned by someone outside of the
Leone family, and there's a lot involved to make sure this conveyance, or property transfer, goes
smoothly.

The sale of real estate is one form of voluntary property transfer, or property conveyance. Property is
also voluntarily transferred when it's gifted or left through a will. Voluntary transactions may seem
straightforward, since they're transactions that are purposeful and intended by both parties. But, the act
of transferring real property can sometimes be complicated.

This is because there are several different legal steps that must be achieved before a property is
considered to be properly, and therefore legally, transferred. As the attorney, this will be your job. You
will determine which steps the family must take, and then help the family take those steps in order to
secure a legal transfer of the property. You'll oversee the signing, sealing and delivery of this entire legal
process for Sunny and her sisters. Let's take a look at the process.

The law relating to transfer of property is governed by the Transfer of Property Act, 1882. Before this
Act came into force there was practically no law as to real property in India. Barring few points which
were covered by certain Regulations and Acts, the Courts in India in the absence of any statutory
provisions, applied rules of English law as the rule of justice, equity and good conscience.

The Act was enacted with the object to amend the law relating to the transfer of property by act of
parties. The Act excludes from its purview the transfers by operation of law, i.e. by sale in execution,
forfeiture, insolvency or intestate succession. The scope of the Act is limited, as it is confined to
transfers inter vivos and excludes testamentary succession, i.e. transfers by will.

Definition

1. Instrument
"Instrument" means a non-testamentary instrument.

2. Attachment to earth

• Attach to the earth means:

(a) Rooted in the earth (Example: trees and shrubs)

(b) Imbedded in the earth (Example: walls or buildings)

(c) Attached in such a way which gives permanent beneficial enjoyment.

3. Absolute Interest

• It means ownership which consists of a bundle of rights, the right to possession, right to
enjoyment and right to do anything such as selling, mortgaging or making gift of the property.

• Example –

If A is the owner of a land, he has an absolute interest in the land. If A sells his land to B, then B becomes
the owner and he acquires an absolute interest in the land he has purchased from A. Likewise if A makes
a gift of his property to B, there again B gets an absolute interest in the property which is gifted to him.
These are instances where persons may have an absolute interest.

4. Reversion

• The residue of an original interest which is left after the grantor has granted the lessee a small
estate.

• Example

If a property has been given on lease for 5 years, after the period of 5 years, the property which reverts
back to him is called the reversion or revisionary interest.

5. Remainder
• When the owner of the property grants limited interest in favor of other person (1st mentioned
person) and gives remaining to other (2nd person) it is called remainder.

6. Attested

• Attested in relation to an instrument, means attested by two or more witnesses each of whom
has:

1. Seen the executants sign or affix his mark to the instruments

2. Seen some other person sign the instrument in the presence of and by the direction of
executants

3. Received from executants a person acknowledge of his signature or of the signature of such
other person

4. Signed the instrument in the presence of the executants

• It is not necessary that all the witnesses should be present at the same time. Also no particular
form of attestation is necessary.

Vested and Contingent Interest Vested Interest – Section 19

• The word vested can be used in two references:

1. Vested in possession

2. Vested in Interest

• Vested in possession means the right to present possession of property.

• Vested in interest means present right to future possession of property.

• Vested interest means interest created in favor of person which is not subject to happening of
an event or if subject to the happening of an event then such event is bound to happen.

• Example – A property is given to A for life with a remainder to B, A’s right is vested in

possession; B’s right is vested in interest.

• Vested Interest is transferable and heritable.

• If transferee dies before taking possession of property then such property passes to his legal
heir.

Contingent Interest – Section 21

• Example – A transfer’s property to B until B marries and after marriage of B to C.C has
contingent interest in the property.

• Contingent interest is not heritable but is transferable.

Vested Interest Contingent Interest

It does not depend on the fulfillment of any

condition. It depends upon the fulfillment of condition.

It present immediate rights but its enjoyment

may be postponed to future date. Right of enjoyment accrues on happening of

an event which is uncertain.

A vested interest cannot be defeated by the

death of the transferee before he obtains possession. A contingent interest may fail in case of the

death of transferee before the fulfillment of condition.

It is transferable and heritable. It is not transferable when the transferee of contingent interest dies
before obtaining possession, the interest fails and does not pass

to the heir.

Movable and immovable Property Movable Property

• The Transfer of Property Act, 1882 does not define movable property. It is defined with the help
of other statutes.

• As per General Clauses Act, 1897 movable property means “property of every

description except immovable property”.

• The Registration Act defines "moveable property" to include property of every description
excluding immovable property but including standing timber, growing crops and grass.

• Examples –

1. Machine fixed on land temporary.

3. Intellectual Property Right

4. Standing timber and trees

5. Right to recover maintenance allowance.

6. Royalty

7. Right to worship

8. Copyright

9. A decree for sale on a mortgage deed.

10. Standing timber, growing crops and grass

Immovable Property

• The term “immovable property” is also not defined under the Act. However a negative reference
is given in the Act which says that immovable property does not include standing timber, growing crop
and grass.

• According to General Clauses Act ,1897 –

Immovable Property shall include land, benefits to arise out of land and things attached to the earth, or
permanently fastened to anything attached to the earth.

• The Indian Registration Act expressly includes under to immovable property the benefit to arise
out of land, hereditary allowance, right of way, light, ferries and fisheries.

• Examples –

1. Chattel embedded to earth

2. Easement
3. Right to ferry

4. Right to way

5. Right to enjoyment of property under lease

6. A right to fishery

7. A right to collect rent of immovable property

8. Interest in mortgage

9. Hereditary offices

10. Right to collect lac from trees

11. Reversion in property leased.

12. A factory

Movable Property Immovable Property The movable property can be

transported from one place to another. The immovable property cannot be easily

transported from one place to another.

Example – Books , Timber ,Vehicles etc. Example – House ,land, tree attached to the

ground

Mango tree if cut and sold for timber purpose

are deemed as movable property. Mango tree if sold for nourishment of fruits,

they are deemed as immovable property.

It is optional to register movable property under the Indian Registration Act, 1908. Whenever
there is a transfer of any immovable property, it must be compulsorily registered

under the Indian Registration Act, 1908.

Mere delivery with intention to transfer the

movable property completes the transfer.

Mere delivery is not sufficient for a valid

transfer,
Transfer of Property

Meaning of Transfer of Property – Section 5

•“Transfer of property” means an act by which a living person conveys property in present, or in future,
to one or more other living persons, or to himself, and one or more other living persons.

•"Living person" includes a company or association or body of individuals whether incorporated or not.

Essential elements of valid transfer

•It is necessary to fulfill the following conditions to make a valid transfer of an immovable property :

1. Property must be transferable.

2. Transferor and transferee must be competent.

3. Consideration and object of transfer must be lawful.

4. Transfer must take place as per method prescribed under the Act.

Who can transfer the property?

•Every person who is competent to contract and entitled to transferable property, or authorized to
dispose of property is competent to transfer such property.

•Hence, every person competent to contract and having ownership can transfer property.

•According to Indian Contract Act, a person is competent to contract when he is a major and of sound
mind and is not disqualified from contracting by any law to which he is subject.

Properties which can be transferred