Scrutiny of Title Deeds

Posted On: 2015-04-23 23:48:37

TRACING AND SCRUTINY OF TITLE TO IMMOVABLE PROPERTY

The scrutiny of title deeds of a property is the first exercise a purchaser's advocate has to undertake, before the purchaser enters into an agreement with a seller. A clean and marketable title, free from all doubts and encumbrances, vested with physical possession, is very important. The ownership of the title holder can be traced from the title deeds and revenue records.

In order to get solutions to all your problems related to scrutiny and verification of title deed documents of your property, you invariably have to visit Kumar Associates and take valuable guidance and help from Sri S. Selvakumar, Expert Lawyer on Real Estate Property matters.

Through Title Deeds

 

The ownership or title to the property can be traced on scrutiny of documents, which are called title deeds. The most important document to trace the ownership is the mother deed/ Parent Deed, a basic document that shows how the property at the earliest stage was acquired. Thereafter, there will be a series of transactions, such as sale, gift, partition, will etc., where each transaction has to be supported by documents prepared on paper of requisite stamp.

Generally, all documents transferring immovable property requires to be registered and documents should bear registration details after every transaction. There should be continuity in documentation duly supported by documents. Apart from verification of documents if registered, encumbrance certificate, records each registered transaction and same to be verified. It is advisable to trace the title for a minimum of 42 years to rule out the chances of mortgage.

Through Revenue Documents

The important revenue documents for property within corporation limits are tax assessment orders, Khatha extract, Khatha endorsement/certificate and tax paid receipts. In case of agricultural lands, RTC from 1967, mutation records, and land revenue tax paid receipts are to be verified. Verification of RTC continuously without any break would reveal the flow of transactions including acquisition and conversion, possession and cultivator.

The Title of property is the prime concern of everyone at the time of purchasing of a property. Title is the evidence of the right of ownership or the ground of right of ownership. Title can be created by act of parties or by operation of law. Title is acquired by transfer or by operation of law. The law relating to transfer of immovable property is governed by the Transfer of Property Act. Two other Acts closely connected to it are the Indian Registration Act and the Indian Stamp Act.  Law of Contract, and the various Statutes passed by State Legislatures from time to time have important bearing in the matter of ascertaining title to immovable property. Law relating to succession is another important area connected to investigation of title. Title to immovable property is ascertained by perusing relevant "Documents" and "Deeds" pertaining to such property.

Scrutiny and/or Investigation of title is very essential since the ownership of the property is required to be complete, fair & free from any doubts, risks & interest. To ensure this a detailed scrutiny or investigation is much needed so that a purchaser can take all necessary steps at the time of acquiring property to obtain a good & clear title of the land property.. The investigation is carried out broadly to ensure that the property is indeed in the name of the person selling, is free from liens, mortgages and encumbrances, that the property tax has been fully paid up to date and that the property is not engaged in any legal conflicts.

The object of scrutiny or title deeds is to ascertain the ownership and title of a given property. The attributes of ownership are,

(1) right to have and to get possession;

(2) right to prevent interference by others;

(3) Power of alienation;

(4) liberty of using the object according to owner's will;

(5) liberty of enjoying the fruits and to avail of the object owned;

(6) liberty of changing its form and even destroying it.

The scrutiny of title deeds and/or  investigation of title is a step towards entering into an agreement of sale. An agreement of sale has three main steps preceding the completion of a transaction of sale they are: -

(1) Settlement of the terms of the deal between the parties particularly relating to the consideration & the property to be transferred,

(2) Preparation and execution of the agreement, and

(3) Investigation of title of the transfer of property.

The origin of ownership is in possession: Actual possession implies a right to retain it until the contrary is proved and to that extent possessor is presumed to be the owner. The concept of ownership give birth to "title" and the idea of title as the better right to obtain or retain possession.

There is no standard period prescribed for the flow of title. After the execution of the agreement of sale it will be the duty of the vendor's advocate to send to the purchaser's advocate the title deeds of the property. These title deeds are sent in exchange of an accountable receipt to be signed by the purchaser's advocate. The purchaser's advocate signs the accountable receipt and keeps a copy thereof with him with the title deeds. Scrutiny of title deeds starts with the present owner's original title deed which will always be 'the document of title 'to the property. Once the original title deed is perused the investigator proceeds to verify the parent documents or the prior title deeds.  The safest thing is to peruse the title deeds for the last 30 years. The reasons for this proposition are;

(1) the period of Limitation against Government is 30 years;

(2) Under Section 90 of the Evidence Act , a document 30 years or more are presumed to be validly executed.

(3) The contents of any document are presumed to represent the correct agreement or understanding between the parties there to.

However a search for the last 12 years is treated as normally sufficient.  If the title cannot be reasonably be ascertained with in 12 years, then it is necessary to go back as much as necessary. In addition to ascertaining the owner's title, it is the duty of the investigator to rule out the possibility of any subsisting charge by way of equitable mortgage on the property under investigation. For this, perusal of all original title deeds for the last 12 years or even more may become essential.

Some transactions are un-registered, and to check such unregistered transactions it is advisable to the purchaser to Publish a PUBLIC NOTICE at least in two Local News papers and invite for objections from public or interested persons and this helps the purchaser's advocate to satisfy himself about the title of the property. Claims are invited in the nature of mortgage, lien, charge, lease, easement, gift, trust, or any other claim against the property which is required to be notified to the buyer's advocate within a period of 15days after which it shall be deemed to have been waived. Such Public Notice supports the buyer's contention in the case of dispute that he is a bonafide purchaser for value without notice of any claim.


For closure in a sale after all these reports purchaser's requisitions on the vendor's title to the property is to be prepared. The requisitions are of two type's general and special requisitions. Special requisitions are objections raised by the buyer on scrutiny and appraisal of the documents produced by the vendor, and relate to title or defects in conveyance. General requisitions are more or less of a routine type of inquiries. A set of general requisitions are those which one may adopt to suit a particular transaction.

Thereafter arises the stage of preparing draft of the conveyance.

The following points are generally to be ensure that are covered in the conveyance deed:

  1. Indemnity/Guarantee from the present owner about his title over property,
  2. Indemnity/Guarantee from the present owner about his possession over property,
  3. Point making clear that the said property does not relates with any public activity,
  4. Point making clear that the said property is not a Trust Property,
  5. Point making clear that said property is not a Government Granted Land,
  6. Point making clear that no-one has any right (road/ parking) over said property,
  7. Point about the existing structure on property (if any). because it may affect valuation of the property,
  8. If the said property is ancestral one then it is necessary to make all members of the family as confirming parties for the deed,
  9. Purchase price of the property is agreed mutually, with the schedule of payment,
  10. Indemnity/Guarantee from the present owner about Non Litigant property because any transaction for a property for which litigation is pending is null and void in the eye of law,
  11. Boundaries of the property gives clear idea about the exact location of the property. Therefore it is necessary to mention it clearly in the Title-Deed, a part from this it is advisable to attach a map showing exact location or Identification of the property.,  
  12. Witness to the deed plays very important role if the deal goes in to any Litigation, It is advisable to take one owner of adjoining property as witness as it will help to prove possession of the present owner.


All necessary registration and stamp duty must also be complied with. TDS if any to be paid.

Thus Scrutiny of title deeds is a very vast procedure and it plays prime role in matters of property.

Source : Scrutiny Of Title Deeds