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Mortgage & Loans

PROCEEDINGS FOR SALE, PURCHASE, AND LEASING OF PROPERTY

SALE

Sale is defined in Section 54 of the Transfer of Property Act. Sale is a transfer of ownership of any property or properties in exchange for a price paid or promised, or part-paid and part-promised. After sale no rights are left with the transferor.

• Persons under disability cannot even take a transfer where the same involves covenants.

• Persons in fiduciary relationship.

• Where a presumption of undue influence arises in cases of transaction between the parties.

The passing of title always depends upon the intention of the parties as to when title to the property will pass unto and vest in the purchaser. However the vendor can prove that no consideration has in fact been paid notwithstanding an admission in the sale deed. It has been held by the Supreme Court that if the sale deed is not supported by adequate consideration the transaction is void and so no relief will be granted to the vendor. Thus, where the vendor retains possession of the property or the deed pending payment of price or where the deed expressly provided that it shall be void and of no effect unless the price, unpaid whole or portion as the case may be, is paid within a fixed time, no right is acquired by the purchaser in such cases by the execution and registration of the deed.

Section 53A of the Transfer of Property Act, though does not expressly confer any substantive right in the transferee, and nevertheless protects him against any action for eviction by the transferor. The requirement under Section 53A of the Transfer of Property Act is that the contract must be in writing and signed by the parties and further that the transferee shall take possession of the property, therefore Section 53A does not create any title.

The rights and liabilities of the buyer and seller are governed, in absence of any contrary, by Section 55 of the Transfer of Property Act. If any defect in title is discovered before sale the purchaser is entitled to refund of the earnest money with damages and costs but in case of discovery after sale he can file a suit for cancellation and refund of the consideration money etc.

PURCHASE

To obtain ownership of a security or other asset in exchange for money or value is known as purchase. A real estate purchase contract is a binding agreement (between two or more parties with legal capacity) to purchase real property. It is based on legal consideration.

The Purchase Agreement is known by various names, such as "Contract of Purchase," "Agreement of Sale," "Sales Agreement," "Purchase Contract," "Sales Contract," and many others. The different names used vary according to custom, location or jurisdiction. It doesn't really matter what it is called as long as the documents meet the definition requirements.

The "Purchase Agreement" is generally defined as a contract for the purchase and sale of real estate between a Buyer and Seller in which a seller agrees to sell and a buyer agrees to buy, under certain specific terms and conditions. These "specific terms and conditions" and any other stipulations agreed upon by the two parties are compiled and entered into documents referred to as "PURCHASE CONTRACT."

The purchase process of real estate has developed through the years into a specific pattern. It first begins with an "offer" from the potential Buyer. This "offer" will contain all of the stipulations required by the buyer in order to purchase the property. These can be such things as an adjusted purchase price, terms of the down payment and many different contingencies.

LEASE

A Lease is a contract between the lessor and the lessee for possession and enjoyment of the profits of the land on one side and recompense by rent or other consideration on the other. A Lease is a transfer of an estate of inheritance and does not ipso facto terminate on the death of any one of the parties but passes on to their respective heirs and legal representatives.

Section 105 of the Transfer of Property Act lays down that a lease of immovable property is not a mere contract, but it operates as a conveyance or transfer of the right to enjoy such property, made for a certain time, express or implied, or in perpetuity in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions, to the transferor by the transferee who accepts such transfer or terms.

The essential elements of a lease are

• Parties

• Property

• Demise

• Terms and Condition

• Consideration.

DURATION OF LEASE

In the absence of a contract or local law or usage to the country, a lease of immovable property for agricultural or manufacturing purposes shall be deemed to be a lease from year to year terminable, on the part of either lessor or lessee, by six months notice expiring with the end of the year of the tenancy; and a lease of immovable property for any other purpose shall be deemed to be a lease from month to month terminable, on the part of either lessor or lessee, by 15 days notice expiring with the end of the month of tenancy (Section 106 of the Transfer of Property Act).

A Lease of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent, can be made only by a registered instrument.

All other leases of immovable property can be made either by a registered instrument or by oral agreement accompanied by delivery of possession.

Where a lease of immovable property is made by registered instrument, such instrument must be executed by both the lessor and the lessee (Section 107 of the Transfer of Property Act).