50 tips for safe real estate transactions

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ENCYLOPEADIA REAL ESTATE TRANSACTIONS
INTRODUCTION

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Real Estate or immovable property, is any sub-set of land that has been legally
defined and improvements to it have been made by human efforts. There are
five types of Real Estate, namely
1. Residential (housing),
2. Commercial (offices, shops, theatres, hotels, car parks),
3. Industrial (warehouses, factories, power plants),
4. Agricultural (farms, orchards, etc.) and
5. Special purpose (hospitals, schools, etc.)
The residential segment is the largest of the real estate sector and is classified in
three categories namely:
1. affordable housing,
2. mid-income housing and
3. luxury housing
Types of house buyers
There are four categories of property buyers:
(i) Retail shoppers (the average home buyers),
(ii) Additional rental income seekers (who buy second home with a view
to get returns from rentals and long term returns when property value
rises),
(iii) those who want to profit from a face lift: those who invest in cheaper
properties, renovate them and sell for profit,
(iv) Investors: those who have spare cash
However one thing is to be noted in all is this there will similar patterns of care
to be taken while purchasing a real estate whatever the kind it may be.
GENERAL PRECAUTION WHILE PURCHASING THE PROPERTY

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Precaution is better than cure
There is an old English proverb, "Precaution is better than cure", which would
be most appropriate when buying an immovable property.
Although there are several laws in place that protect a purchaser of property,
self-help is the best help and one must do due diligence before buying property.
Some important aspect one must looked at are as briefly as below:
A. Title of property
What is title to a property?
Title is a legal term; it means the ownership right to property.
 Title of property is the prime concern of everyone at the time of
purchasing of a property.
 Every property has a title.
 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, 1882 .Two other Acts closely connected to it are the Indian
Registration Act 1908 and the Indian Stamp Act, 1899. The 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.

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It is a settled legal principle that a person cannot convey a better title, than what
he himself has. Clear title to a property is one of the most important factors to
be considered before purchase. the buyer should undertake due diligence, to
ascertain the existence of the title with the seller, the nature of the title and its
marketability and the ability of the seller to convey clear and marketable title,
free from encumbrance.
Documents, for a period of 30 years, if not more (and where documents are not
available, for minimum period of 12 years), must be examined and the seller
may be called upon to provide the following documents / information:
i. Title documents of the property: Government order for grant, succession
certificate, sale deed, gift deed, will, partition deed, etc., evidencing the
transfer of title over the years, culminating in the vesting of property with
the seller.
ii. Nature of title: Leasehold, freehold, or development right.
iii. In case of the seller claiming development rights to the property, the
development agreement and power of attorney, executed by the owners in
favour of the seller.
iv. All title documents being duly stamped and registered at the office of the
jurisdictional sub-registrar of assurances.
v. Khata registered in the name of the seller.
vi. Information on pending or past litigation.
vii. Availability of original title documents with the seller.
Investigation of title is very essential since the ownership of the property is
required to be complete, fair & free from any doubts, risks & interest.
There are various means to investigate the title such as:

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1. by studying the documents of title to ensure that the owner has proper
ownership to the property. The documents of title should be studied very
carefully as any shortfall may lead to a defective title.
2. taking inspection of the original title deeds.
3. taking search of the land records and the records of the Sub-Registrar.
4. taking search of the records of the society where the property is in a
society.
5. issuing public notice in newspapers calling for claims in respect of the
property.
In Maharashtra to check the title verification of the property the investigator
must do the following checks: -
a) Recent 7/12 Extract ( 7-12 Utara) :- It will give idea about the type of
ownership, total number owners ( and their share in property) of the
property. Loan on the property, tenant in the property ( if any), cultivable
and non cultivable area in the property, source of irrigation ( if any),

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assessment for the property, Class of the property, Reservation on
property( if any).
b) All mutations on 7/12 extract ( Ferfar ):- Mutations are the entries made
by the revenue department in respect of any change in ownership of the
property, such changes may be because of death of any owner, Loan
obtained by any owner etc some time it may happen that name of any
person appears in Mutation but not in 7/12 extract, to check such things it
is advisable to check all mutations,
c) Maps :- it is advisable to check maps provided by the government
authorities, this gives better idea about he exact location of the property
and access to the property,
d) Ceiling Limit :- As per the type of the property there is a Limit provided
for the holding of the Land , the purchase must check that the Land which
he is going to purchase will not cross his limit as well as he have to check
that the vendor is also not holding it as excess land. The Khate Utara (8 A
Extract) is a document which gives us idea about the exact holding of the
owner,
e) 6c Certificate ( Varas Register ) :- 6c Certificate is a document which
gives us idea about the names of all Legal Heirs of deceased person. This
document is very important as, it is noticed that some times names of
Female Legal Heirs are not appearing on revenue documents, to avoid
such ambiguities it is advisable to check 6c Certificate
B. Verify the Indentity of the Seller
Similar to verifying the title to the property, the buyer should also ascertain the
identity of the seller and any specific conditions, governing the ability of the
seller to convey the property.
What documents confirm seller‘s identity?

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Documents that establish the identity of the seller include his passport, Aadhaar
card, PAN card, etc.
The following instances may be noted for illustration:
i. Residence status and nationality of the seller, in case of an individual and
whether consents from government authorities are required for the sale.
ii. Identification of all owners, in case of properties held jointly.
iii. Where the seller is a company, trust, partnership firm, society, etc. The
constitution documents of the entity are necessary to confirm its ability to
own and transfer the property, besides ascertaining that the person
executing and registering the sale deed is duly authorised.
iv. Orders from the competent court, permitting sale of the property and
appointing a guardian, where the property is held by a minor or person of
unsound mind.
C. Conversion and land-use permissions
With increasing urbanisation and merging of revenue lands with urban
conglomerates, conversion of property for non-agricultural use assumes crucial
significance, since several state laws restrict purchase of agricultural property
by non-agriculturists.
Secondly, the buyer must examine the Master Plan and satisfy that the property
is developed in accordance with the zoning plan – such as residential,
commercial, industrial, public/semi-public, parks and open spaces, etc. Where
actual use is different from the notified zoning, obtaining orders from the Town
Planning Authority permitting change of land use, is mandatory.
D. Construction Approvals

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For purchase of apartment or land with constructed building, the buyer should
also scrutinise the building plan / layout plan sanctioned by the local municipal
authorities, along with approvals issued by government, statutory and regulatory
authorities, for providing infrastructure facilities, water, sewage, electricity,
environmental clearance, fire safety approval, etc.
An enquiry is also to be made in CRZ and other zones as it is not allowed to any
development in such zones it is necessary for the purchaser to check such zones
before signing any deed. The purchaser also satisfy himself that the seller is not
going to become a Land-less person after said purchase of land.
E. Occupancy Certificate
It is mandatory for the seller to obtain the occupancy certificate from the
competent authority, prior to conveying the property. Use of the property,
without obtaining occupancy, exposes the buyer to penalty under the applicable
building bye-laws, besides the risk of demolition of the property.
F. Status of Tax Payments
Non-payment of property taxes constitute a charge on the property, affecting its
marketability. So, the buyer must verify with the municipal authorities that the
seller has not defaulted on payment of property taxes.
Do ask for the receipts of all utility bills from the seller. Please note here that
once the property is transferred in your name, you will be liable to pay all
pending dues against the property, utility or otherwise.
One may investigate whether there are any proceedings against the seller under
section 281 of the Income-tax Act, 1961. Further if the seller is a nonresident of
India, TDS may be deductible from the consideration paid unless certificate for
non-deduction or lower deduction is obtained from the concerned Income-tax
officer.

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G. Encumbrance
Searches at the jurisdictional sub-registrar office or the official web portal of the
Ministry of Corporate Affairs (if the seller is a company) will reveal
information of any registered encumbrance on the property. By way of caution,
the purchaser may also issue public notice in newspapers, prior to completing
the transaction, calling for claims from interested third parties, if any.
An encumbrance certificate is the answer to many of the queries a home buyer
can have. These include:
How to make sure the property you are buying is not pledged by the seller to a
bank?
Is the person selling you the property actually its legal owner?
Do you know how many hand the property you are buying has changed since its
inception?
A buyer would find the answer to questions like these in an encumbrance
certificate (EC), which is among the many documents that home buyers would
find most crucial to complete their purchase. Considering this is an important
piece of paper to ensure legal ownership over a property, buyers must make
know everything about an encumbrance certificate (EC).
Which authority issues encumbrance certificate?
The sub-registrar in whose jurisdiction the unit exists issues the encumbrance
certificate for the property. Basically, this is the office where the property was
registered at the time of the purchase by the current and previous owners.

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How many types of encumbrance certificates are there?
Encumbrance certificates have two types:
Form 15: If a property has any encumbrances during the period for which the
applicant has sought a certificate, the sub-registrar‘s office issues an
encumbrance certificate on Form 15.
Form 16: If a property has not registered any encumbrances during the period
for which the applicant has sought a certificate, the sub-registrar‘s office issues
a nil-encumbrance certificate on Form 16.
Offline procedure to apply for encumbrance certificate:
In states where ECs are not issued online, the applicant will have to visit the
sub-registrar‘s office where the property in question is registered. Write an
application on a plain paper, clearly mentioning the information you seek, and
submit it along with duly filled Form 22. You will have to pay a nominal fee
along with your application to get the EC. The fee would vary, depending on the
period for which the EC is sought.
[Form 22 is the standard performa used to apply for an encumbrance
certificate.]
While it might take between 15 and 30 days to get an EC offline, the document
is issued in matter of 6 to 7 days in states where the certificate is issued online.
In Delhi, for instance, it takes 21 days to get an EC offline.
Obtaining Encumbrance certificate in Maharashtra
To Process In-Person http://igrmaharashtra.gov.in/frmHOME.aspx

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1. To apply for EC (Encumbrance certificate), applicant has to go to the
respective Sub Registrar office.
2. Go to the Link for Sub registration office in the state and hit the name of
the region under Office Address and Timings to get details.
3. Applicant shall collect the appropriate application form for EC at the
respective office complete the form with details and submit the same with
non-judicial stamp affixed along with documents to the respective
authority as advised.
4. Authorities will announce the fees to be paid. Please pay as advised
5. A Receipt containing Acknowledgement ID is issued to the applicant.
6. This application request will be processed by the department.
7. SMS is triggered to the applicants informing the status of the application.
As per notification, applicant shall visit the office to collect the certificate
Required document for the purpose:
 Application form:
 Address proof of applicant (attested copy)
 Property address. survey number, document/patta number
 Period for which the EC is required
 Applicable fees
 Copy of sale deed of the said property. (any one deed for the land and not
necessary to present the last or latest one)
 Purpose for which the EC is applied for
 Copy of Power of Attorney, in case application is made by the attorney
holder
 Aadhar card
 Property card if available

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How Encumbrance certificate is different from Occupancy certificate and Completion
certificate?
Occupancy certificate Completion certificate Encumbrance certificate
It certifies that a building
is for habitation by the
residents
This is an official statement
that the structure has been
created in compliance with the
rules
a legal document that
clarifies whether or not a
particular property is free
from legal or financial
burdens
the local authorities issue
an Occupancy Certificate
stating their lack of
objection in allowing the
possession of the project
It is issued by the local
authority to a builder after the
completion of a building in
compliance with the building
plan and other regulations
The Encumbrance Certificate
would reflect the legal and
financial associations of the
property – if the owner has
taken a loan against it, the
certificate would show the
same; if the property is
caught in any legal tussle, the
Encumbrance Certificate
should reflect the same.
H. Physical survey and access to the property
The buyer may undertake a physical survey and confirm the extent and
measurement of the property. In the case of land, it is advisable to identify and
demarcate the boundaries and access to the property and further, ascertain any
other physical attributes that may impede enjoyment of the property.

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I. Compliance under the Real Estate (Regulation and Development)
Act, 2016
The RERA mandates that developers should register their projects with the
authority constituted under the Act. A buyer, intending to buy a property in a
project coming under the ambit of the RERA is advised to verify whether
property has been registered with the authority. Information available on the
official web portal of RERA for each state also provides details of any cases /
complaints filed against the developer of the project and default by developer, if
any and thus, provides useful insight into the credibility of the developer and the
project and helps the buyer make an informed choice.
Buyers should take note of the fact that the law mandates that all real estate
brokers should also be registered with the state RERA, in order to operate
legally. Hence, hire a property broker, only after asking for his RERA
registration. Also, note that agents need to get their RERA registrations
renewed, periodically. Ensure that you are dealing with the right person. One of
the biggest benefits of having a regulatory body is that it requires a standard
process of operation and violators are penalised.

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GENERAL PRECUATIONS WHILE SELLING THE PROPERTY
Selling the real estate is indeed not an easy task, despite the emotional upheaval
there are several tasks that one has to complete prior to selling the property.
These tasks would make the transaction a safe one and provide maximum
returns on investment, which would somewhat offset the emotional burden.
1. Clearing dues
One of the best known ways to get good money for your property is by clearing
the dues on it. Normal real estate rules dictate that if the owner of the property
does not clear the dues, the prospective buyer has to take care of it, but the
buyer then can deduct the amount from the sum payable to the seller. Therefore,
you should clear all dues on your home such as property tax, water tax,
electricity bills, society and maintenance charges and other amounts payable.
Once you clear these dues, you should have the receipts and certificates of
clearance safely with you so that you can produce them later on.
2. Clearing home loan
If you had bought the apartment on borrowed money, you should look to clear
out the loan. Most banks do not charge any money on pre-payment of the loan
or foreclosure. Hence, you should pay the loan borrowed for the property for
sale in India. However, if the amount is very large, you can negotiate with the
buyer to deposit the down payment amount in your loan account to close it.
Alternatively, the buyer can also use the amount that s/he has borrowed from
the bank to close your loan.
3. Organizing the documents
Before entering the property market, you should have all the legal papers in
place. Some of the documents that should be there for ready to move apartments
in India registration certificate, mutation certificate, sales deed, letter of

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allotment, loan clearance certificate (in case there are no outstanding dues on
your property), sanction plan and encumbrance certificate to prove that no legal
dues are outstanding on the property. These documents are mandatory to be
presented to the buyer for scrutiny. They will also prove to be important at the
time of drawing up the agreement.
4. Fixing the House
Prior to holding open house showings, you should clear out your furniture and
personal belongings from the apartment. Hire a storage space to keep your stuff
in and to give a new ambience to your ready to move in apartment in India. You
should also get minor repair works done on your property such as repairs of
light fixtures, taps and shower nozzles and filling up cracks in the wall. If you
can spare some money, you should get the house whitewashed as well.
5. Hiring the right broker
Brokers have a natural vested interest in getting your property sold because of
the commission associated with it. However, select the right one who will look
out for your interest without delaying the sale. A good broker will bring in
serious buyers who understand what your house is worth with respect to the
other properties in the neighborhood. He will also assist in
the negotiation between both parties in the deal.

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REAL ESTATE AGENT
A real estate agent is a licensed professional who arranges real estate
transactions, putting buyers and sellers together and acting as their
representative in negotiations. Real estate agents usually are compensated
completely by a commission—a percentage of the property‘s purchase price—
so their income depends on their ability to close a deal. In almost every state a
real estate agent must work for or be affiliated with a real estate broker (an
individual or a brokerage firm), who is more experienced and licensed to a
higher degree.
Real estate agents usually specialize in either commercial or residential real
estate. Either way, they perform different duties, depending on whether they
work for the buyer or the seller. Agents who work for the seller, also known as
listing agents, advise clients on how to price the property and prepare it for a
sale, including providing tips on last-minute improvements that can boost the
price or encourage speedy offers. Seller agents market the property through
listing services, networking, and advertisements.
Agents who work for the buyer search for available properties that match the
buyer‘s price range and wish list. These agents often look at past sales data on
comparable properties to help prospective buyers come up with a fair bid.
Agents act as go-betweens for the principal parties, carrying offers and
counteroffers and other questions back and forth. Once a bid is accepted, agents
on both sides often continue to work, helping their clients through the
paperwork, conveying communications, advising on inspections and moving,
and generally shepherding the deal through to closing.
It‘s important for consumers to understand whether a real estate agent
represents the buyer, the seller, or both parties; obviously, the agent‘s loyalty
can greatly affect several details of the transaction, including the final price.

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State laws regulate whether an agent can represent both parties in a real estate
transaction, technically known as ―dual agency.‖ Agents must disclose their
representation, so that buyers and sellers are aware of any conflicts of interest.
Real Estate Agent under the Real Estate (Regulation and Development) Act,
2016:
As per the RERA Act 2016, it is mandatory for all the agents to be registered
withReal Estate Agent RERA to work in the real estate sector, which means
only registered agents can facilitate sale and purchase of real estate properties
registered under section 3 of the act. Those not registered with RERA are not
authorized to do any act as laid down in RERA Act.
The registration of an agent is mandatory under section 9 of the Act. The
section states that –
―(1) No real estate agent can facilitate the sale/purchase of properties in real
estate projects registered u/s 3 of the Act without obtaining registration under
section 9.
(2) Every real estate agent shall make an application to the Authority for
registration in such form, manner within such time and accompanied by such
fee and documents as may be prescribed in respective State‘ s rules. The
Authority shall grant a single registration to the real estate agent for the entire
State or Union territory.‖
The Agent has to make an application under section 9(2) to the Real Estate
Regulatory Authority for obtaining the registration certificate. The Application
procedure differs from state to state according to their respective rules., but the
mandatory documents to be submitted are
 Details of the Applicant (Name, address, contact details and the
photograph)

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 Copy of PAN card;
 Brief details of his enterprise (name, registered address, type of
enterprises);
 Particulars of registration as a proprietorship, society, partnership,
company etc. Including bye-laws, MOA, AOA etc.;
Plus any other information as may be specified by the Act, rules or regulation
made thereunder.
Further, the functions of the Real estate agent are provided under section 10 of
the Act-
―Every real estate agent registered u/s 9 shall:-
a) Not facilitate the sale or purchase of any plot, apartment or building, in a real
estate project or part of it, being sold by the promoter in any planning area,
which is not registered with the Authority,
b) maintain and preserve such books of account, records, and documents as may
be prescribed,
c) not involve himself in any unfair trade practices,
d) facilitate the possession of all the information and documents, as the allottee,
is entitled to, at the time of booking of any plot, apartment or building,
e) Discharge such other functions as may be prescribed.‖

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LEASE PROVISION OF PROPERTY IN INDIA
If a property is being used by some other person, apart from the actual owner,
the property is said to be rented out or leased out. To formalise this
arrangement, a rental agreement, known as the lease deed, is entered into.
A lease deed: It is a document or a written contract between the property owner
or a landlord also known as lessor and the tenant or lessee, which contains all
the terms and conditions, including the rent to be paid, security deposit to be
made, etc. A lease deed is usually required, when the property is rented out for a
long period of time. A deed has to be registered, if the lease period is for more
than 11 months.
Content of the lease deed
1. Property details, including area, location, address, structure, furniture and
furnishings, if provided.
2. Lease duration, its validity and provision for its renewal, along with the
terms and conditions for its renewal.
3. Rent, maintenance, security deposit to be paid by the tenant and the due
date. Other important provisions, such as interest and penalty on payment
delay, should also be mentioned. It should also mention the details of
payment to be made by the tenant on a monthly basis, such as electricity
charges, water bills or any other utility costs.
4. Clauses for lease termination should be mentioned in the lease deed,
along with other reasons for which the agreement can be cancelled, such
as breach of deed, use of property for illegal activities, or failure to pay
rent.
Registration of Lease Deed

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According to the Registration Act, 1908, any property being leased for
residential, commercial, cultivation, hereditary allowances, or fisheries purpose,
should be registered, if they are being leased out for more than 11 months.
Documents required for registration of lease deed
The following documents are required for lease deed registration:
 Identity proof, such as Aadhaar Card, driving licence, passport, etc., of
the landlord and tenant.
 Address proof of the authorised signatory, from both the parties.
 Passport-sized colour photographs of the authorised signatory, from both
the parties.
 Company PAN card and company seal/stamp, if it is a commercial
property.
 The original proof/evidence of ownership or title of the property.
 Property documents, such as Index II or tax receipt of the property to be
leased.
 Route map of the property leased out.
Pre-requisite for the rent and lease agreement in India
The tenant-landlord relationship is one of the most inevitable relationships that
we find but it could be among most complicated ones too. When one rents a flat
to somebody it involves a lot of care and precaution which is to be taken. There
are many traps which one could find himself into by not taking precautionary
measures while renting his flat. Many landlords do not prefer rental contracts to
avoid tax payments but one should insist upon having it. The person having a
rental agreement can take help from real estate agencies to formulate terms of
the agreement.

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There are basically two types of rental contracts in India. One is lease
agreement which lasts for 12 months and is covered under Rent Control Laws
and the other one is lease agreement which runs for 11 months which are not
governed by the Rent Control Law. The lease agreements governed by the Rent
Control Laws are governed by the rent regulations put up by the State
Governments and rents are determined by the State Government. The rent is
basically determined by paying attention to the factors like market price of the
property, cost of construction incurred, construction time etc. So here being a
simple logic that older the property lesser would be the rent and vice versa.
When a lease agreement is signed for 12 months, the tenant gets the ownership
of the property for an indefinite period of time. This condition has certainly
propelled the number of problems like tenant refusing to leave the flat etc. The
problem then comes to court and it takes a very long time to get it resolved. So,
in that case a better option would be to have a lease and license agreement for
11 months. The period is renewable after the passage of the said time depending
upon the circumstances. This agreement bestows a right to live only for the said
time period i.e. 11 months. One could also have short term lease agreements but
those are generally very exorbitant ones. This provides a great amount of
security to the landlords from the tenants.
The rental contracts in India are usually in English. One should always have a
keen look at the terms of the contract and if any specific terms are being
included then it should have been explicitly mentioned in the lease agreement.
Sometimes landlords could be really mean and may include certain terms which
could be harmful for the tenants. Every rent control laws of different states have
certified rate of rent that is to be levied accordingly.
The tenant should be vigilant enough to make a note that he is been charged at
the correct rate. For instance the old Karnataka Rent Control act has been

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expired and a new one has emerged in 2001 which says that rent is to be
calculated at 10% per annum of the aggregate amount incurred in construction
and market price of the land on the date of construction.
Rents are usually paid in cash or cheque and bank transfers are usually avoided
by the landlords to be on the safer side. The landlord though might ask to do
part payments in cash and cheques to save his tax payments. In India there is
also a custom of rental/security deposits. They are usually for three to four
months advance but since landlords have got authority to modulate the deposit
amount so one might be asked to pay a higher price for upcoming months. The
deposits are generally given after signing the lease agreement and a receipt is
provided upon paying the same as a proof of payment. At the time of moving
out your deposit/security amount will be delivered back once the landlord has
finished comprehending the damages incurred.
The damages would be covered by the deposit/security amount delivered and
rest of the part is returned back to the tenant. This procedure requires a lot of
deliberations and discussions so one should make sure that he gets a fair deal
with respect to the same.
Online Registration of Rent Agreement in Maharashtra
As per Section 17 of the Registration Act, 1908 which applies to the whole of
India, every agreement for leases of immovable property from year to year, or
for any term exceeding one year, are required to be registered mandatorily. So,
unless the state laws provide otherwise, each and every leave and licence
agreement for a period of 12 months or more, has to be registered.
However, for Maharashtra, the law has been made more stringent and as per the
provisions of Section 55 of the Maharashtra Rent Control Act, 1999, every

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agreement of a tenancy or leave and license has to be in writing and the same
also needs to be mandatorily registered, irrespective of the period of tenancy.
It is the responsibility of the landlord to ensure registration of the rental
agreement, failing which, the landlord may have to pay a penalty of Rs 5,000, as
well subject himself to imprisonment upto three months. In case the agreement
for leave and licence is not registered and any dispute arises between the
landlord and the tenant, the terms and conditions of the agreement as contended
by the tenant shall be taken as the true and correct conditions on which the
immovable property has been given on rent, unless it is proven otherwise.
The registration fee for a tenancy agreement in Maharashtra, depends on where
the property being let out, is located. The registration fees are Rs 1,000, if the
property is situated under any municipal corporation area and it is Rs 500, if the
same is in a rural area. In the absence of any agreement to the contrary, the cost
of stamp duty and registration is to be borne by the tenant.
Process of Online Registration
1. Creating a profile:
This would be the 1st
step where one is requird to create a profile on
https://efilingigr.maharashtra.gov.in/ereg/ website and selecting district where
the property is located

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2. Property details page
Post successful creation of the profile, the site redirects you to “Property
Details Page”
Enter details of property like Taluka, Village, Property type, Unit Area, Address
and other details as available on the e-filing website’s “Property Detail Page”.

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Upon successful completion, a token number will be generated. Applicants
needs to use this token number as your user ID for next login.
3. Party Details
In the next step, you need to enter ‗party details‘
Fill in the information required-
Save the details added.
Fill second party details by clicking ―Add : Party Details‖ and save the changes
Click ―Next: Rent & Other Terms‖
4. Rent & Other Terms –

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Enter owner and if applicable, tenant details.
5. Stamp Duty –
The applicant can pay the stamp duty charges and fees online by generating an
online challan receipt. Stamp duty calculation is generally derived basis a few
particulars that need to be mentioned while registering a property:
Complete address of the property
Name of the landlord, occupant, and if applicable, the previous occupant/owner.
If the property has already been included in a city survey, include the CTS
number.
If said property is in the outside town or a land parcel then name of the
geographical area where same is located, like Revenue village or name of
Taluka.
6. Schedule an appointment –
Post successful payment of necessary fees, the applicant needs to book an
appointment with the sub-registrar. Arriving at the sub registrar‘s with the
necessary documents in print ensures that successful registration of the
applicant‘s property is conducted swiftly.
Word of caution:
While the state has simplified online payment for various facilities, all parties
involved in a deal must make sure they do not involve unauthorised third-parties
while completing digital transactions. Try and complete the online transaction
either with the help of a trusted family member or friend or under the guidance
of your lawyer or financial advisor.
Most importantly, entering into tenancies without giving the agreement a legal
validity through the execution of a lease agreement, would be a bad idea,

27
especially keeping in view the instances of wrongdoings in Mumbai‘s rental
real estate market.

28
LEAVE AND LICENSE
A Leave and License is an agreement temporarily made by a licensor and a
licensee which allows the licensee to use and occupy the licensor‘s immovable
property full or part of the same, for the purpose of carrying on business activity
or residential use and pay a fixed amount of rent or as per their mutual
understanding decided and accepted.
Here, there is another confusion assumed by people that Leave & License
agreement and the Rental or Lease agreement are to be the same. But that‘s not
the case both are different from each other. In leave and license the term
License means limited rights/set of rights given by one party to another to
perform certain actions in or upon the immovable property, such rights are
personal and non-transferable and in the Rental or lease agreement the rights are
being transferred for the enjoyment of the immovable property for a certain
period of time by the transferor (lessor) to transferee (lessee) for a consideration
(rent).
All these agreements are governed by the Indian Easement Act, 1882. In the
case of leave and lease, the owner leaves the place with various facilities and
allows the licensee to use it for a specific period of time. Once the leave is over
and the owner returns, the entire set of facilities, which are given for use shall
be left behind when the licensee leaves the premises.
Essential clauses
The main essential clauses to the leave and license agreement are as
follows:
1. Party clause:
A clause identifying the parties to the agreement is mandatory. Party name
clause is an important clause where the names of the licensor and licensee with

29
their address & identity proof are mentioned in the clause. There is a need to
ensure that the business of the licensee to be identified and mention the
Company Identification Number (CIN), if any in the commercial agreement.
2. The definitions clause:
This clause gives meaning to the specific and various terms/words mentioned
/used in the agreement for getting clarity about it in the agreement. This clause
is a self-explanatory clause. Like ―Premise‖, means wherever the word premise
is mentioned it will be understood the same throughout the agreement.
3. Premise/the place of use:
The place used/occupied for residence or commercial use shall be mentioned in
detail with full address describing all sides and borders of the place and also
mention the purpose like in commercial agreement which type of business is
going to be carried out. It should be clearly mentioned in the agreement about
the space which should be used accordingly.
4. Transfer of rights:
This clause is very important as it clearly expresses that the lessor is transferring
the rights of his property to the lessee for a period of time. This clause contains
the main purpose of this agreement and is also imperative to the agreement.
5. Rent and Security deposit:
This clause tells us about the security amount and rent amount clause. Rent is
the consideration which is mutually decided by both parties and sometimes in
commercial agreement along with the base rent the party has to share the profit
percentage with the other party.
The security deposit is to be paid in the context of any dispute/default arising
out of the agreement by the lessee to the lessor as security. This should be

30
ideally paid after the agreement is signed by both parties and returned at the end
of the tenure.
6. Tenure of the Agreement:
The tenure is mostly fixed for 11 months and it is to be mentioned clearly.
However, in commercial agreement, the term may be longer and mutually as
decided.
7. Duties and obligations of both parties:
The duties and obligations of both parties related to this Agreement shall be
mentioned clearly in this clause. Both parties are legally bound to follow the
terms. The duty of the tenant is to take care of the property very well, maintain
peace, law and order in the place, pay the rent on time etc. The duty of the
landlord is to provide proper facilities like water and electricity to the tenant in
the premises for the period of the tenure.
8. Termination:
The way of termination is mentioned in this clause and also about how the
notices shall be served and it can be either terminated by both or either of the
parties. After or before the termination both parties can mutually decide for the
extension/renewal of the agreement.
9. Dispute resolution:
This clause is the most important in the event of any dispute arising out of the
agreement or during the tenure. This clause provides the means of dispute
resolutions. Arbitration, Conciliation and way to court are the most common
ways to dispute resolution.
Remedies available for the lessor/landlord

31
 The lessee has no right to carry on the possession of the property as the
term expires, so he has to vacate the property.
 If any dispute arises during the term then also the lessee cannot deny
returning the possession. In such a situation the lessor has the right to
institute a suit for ejection against the lessee for not vacating the property.
The rent control law currently favors the tenant which prevents the landlords
from overcharging the tenants. Moreover, the right to ownership of property
gets transferred to the tenant in case of a lease which makes it difficult for him
to vacate the tenant. Therefore, landlords do not prefer to enter into agreements
that are over 11 months.
Under section 55 of the Maharashtra Rent Control Act, 1999, it is compulsory
that all agreements bearing 12 months or more of the tenure should be in writing
and registered and pay the required stamp duty.
The penalty for failure to register is imprisonment up to 3 months, or a fine up
to Rs. 5000 or both.
Remedies available for the tenant/lessee defends himself from getting
evicted by the landlord/lessor
Every state has a Rent Control Act, which lays down the various grounds under
which the lessor is legally allowed to evict a lessee. Before this the lessor needs
to acquire details about the said Act.
 In the event of eviction the lessee has the right to challenge the notice and
seek help from the Rent Controller of appropriate jurisdiction and stay the
notice.
 As per the Act, the tenant may take the premises on rent, bearing an
amount fixed as rent for commercial or residential use.

32
 However, legally the owner or the landlord cannot take back the premises
as long as the rent is being paid.
As it is a temporary agreement no major alterations in the property is allowed
and also not use the premises for any other activities originally not intended or
mentioned in the agreement.
Below is the Format of Leave and License Agreement for your ready reference:
LEAVE AND LICENSE AGREEMENT
This agreement is made and executed on (Date) at (City)
Between,
(Name) , Age:About Years,Occupation: , PAN: ,
UID: . Residing at:
HEREINAFTER called ‗the Licensor (which expression shall mean and include
the Licensor above named as also his respective heirs, successors, assigns,
executors and administrators)
AND
(Name) , Age: About Years,Occupation: ,
PAN:_________,UID:________ Residing
at_______________________________________________________________
HEREINAFTER called ‗the Licensee‘ (which expression shall mean and
include only Licensee above named).

33
WHEREAS the Licensor is absolutely seized and possessed of and or otherwise
well and sufficiently entitled to all that constructed portion being unit described
in Schedule hereunder written and are hereafter for the sake of brevity called or
referred to as Licensed Premises and is/are desirous of giving the said premises
on Leave and License basis under Section 24 of the Maharashtra Rent Control
Act, 1999.
AND WHEREAS the Licensee herein is in need of temporary premises for his
use has/have approached the Licensor with a request to allow the
Licensee herein to use and occupy the said premises on Leave and License basis
for a period of Months commencing from and ending on
, on terms and subject to conditions hereafter appearing. AND
WHEREAS the Licensor have agreed to allow the Licensee herein to use and
occupy the said Licensed premises for his aforesaid purposes
only, on Leave and License basis for above mentioned period, on terms and
subject to conditions hereafter appearing;
NOW THEREFORE IT IS HEREBY AGREED TO, DECLARED AND
RECORDED BY AND BETWEEN THE PARTIES HERETO AS
FOLLOWS:-
1) Period: That the Licensor hereby grants to the Licensee herein a revocable
leave and license, to occupy the Licensed Premises, described in Schedule
hereunder written without creating any tenancy rights or any other rights, title
and interest in favour of the Licensee for a period of Months
commencing from and ending on .
2) Rent & Deposit:
Note:The clause 2 will depend on your selection
 That the Licensee shall pay to the Licensor Rs. Per month
towards the compensation and Rs. Interest free refundable

34
deposit, for the use of the said licensed premises. The amount of monthly
compensation shall be payable within first five days of the concerned
month of Leave and License
 That the Licensees shall pay to the Licensor the following amount per
month towards the compensation for the use of the said licensed premises
.
a) Rs ----------------per month for the first --------months,
b) Rs-----------------per month for the next --------months,
c) Rs-----------------per month for the next --------months
The amount of monthly compensation shall be payable within first five days of
the concerned month of Leave and License.
OR
 That the Licensees shall pay to the Licensor Rs--------------per month
towards the compensation and Rs--------------interest free refundable
month of Leave and License.
OR
 That the Licensees shall pay to the Licensor Rs--------------per month
towards the compensation and Rs--------------interest free nonrefundable
month of Leave and License.

35
.
c) Rs-----------------per month for the next --------months.
the concerned month of Leave and License. Licensees shall also pay to the
Licensor Rs--------------interest free refundable deposit, for the use of the said
licensed premises.
.
c) Rs-----------------per month for the next --------months.
the concerned month of Leave and License. Licensees shall also pay to the
Licensor Rs--------------interest free nonrefundable deposit, for the use of the
said licensed premises.
3) Payment of Deposit:

36
 That the Licensee have paid / shall pay the above mentioned
deposit/premium as mentioned above by Cash. Amount Rs.________
OR
 That the ---------------------- has/have paid / shall pay the above mentioned
deposit/premium as mentioned above by Demand Draft No.----------,
dated --------, drawn from ---------------- Bank, ------------- Branch.
Amount Rs.-------------
OR
deposit/premium as mentioned above by Cheque No. -----------, dated-----
---, drawn on the Licensee‘s Banking Account with ---------------- Bank, --
----------- Branch. Amount Rs.-------------
OR
deposit/premium as mentioned above by Transaction Reference No. ------
-------, dated----------, drawn on the Licensee‘s Banking Account with ----
----------- Bank, ----------- Branch. Amount Rs.----------
4) Maintenance Charges:
 That the all outgoings including all rates, taxes, levies, assessment,
maintenance charges, non occupancy charges, etc. in respect of the said
premises shall be paid by the Licensor.
OR

37
 That the Licensee/s herein shall bear and pay all the maintenance charges
in respect of the said Licensed Premises, and other outgoings including
all rates, taxes, levies, assessment, non occupancy charges, etc. in respect
of the said premises shall be paid by the Licensor/s
5) Use: That the Licensed premises shall only be used by the Licensee for
purpose. The Licensee shall maintain the said
premises in its existing condition and damage, if any, caused to the said
premises, the same shall be repaired by the Licensee at its own cost subject to
normal wear and tear. The Licensee shall not do anything in the said premises
which is or is likely to cause a nuisance to the other occupants of the said
building or to the prejudice in any manner to The rights of Licensor in respect
of said premises or shall not do any unlawful activities prohibited By State or
Central Government.
6) Alteration: That the Licensee shall not make or permit to do any alteration or
addition to the construction or arrangements (internal or external) to the
Licensed premises without previous consent in writing from the Licensor.
7) No Tenancy: That the Licensee shall not claim any tenancy right and shall
not have any right to transfer, assign, and sublet or grant any license or sub-
license in respect of the Licensed Premises or any part thereof and also shall not
mortgage or raise any loan against the said premises.
8) Inspection: That, the Licensor shall on reasonable notice given by the
Licensor to the Licensee shall have a right of access either by himself or
through authorized representative to enter, view and inspect the Licensed
premises at reasonable intervals.
9) Cancellation: That, if the Licensee commits default in regular and punctual
payments of monthly compensation as herein before mentioned or commit/s

38
breach of any of the terms, covenants and conditions of this agreement or if any
legislation prohibiting the Leave and License is imposed, the Licensor shall be
entitled to revoke and / or cancel the License hereby granted, by giving notice in
writing of one month and the Licensee too will have the right to vacate the said
premises by giving a notice in writing of one month to the Licensor as
mentioned earlier.
10) Possession: That the immediately at on the expiration or termination or
cancellation of this agreement the Licensee shall vacate the said premises
without delay with all his goods and belongings. In the event of the Licensee
failing and / or neglecting to remove himself and / or his articles from the said
premises on expiry or sooner determination of this Agreement, the Licensor
shall be entitled to recover damages at the rate of double the daily amount of
compensation per day and or alternatively the Licensor shall be entitled to
remove the Licensee and his belongings from the Licensed premises, without
recourse to the Court of Law.
11) Registration: This Agreement is to be registered and the expenditure of
Stamp duty and registration fees and incidental charges, if any, shall be borne
by the Licensee.
Schedule:
(Being the correct description of Flat which is the subject matter of these
presents) All that constructed portion being residential unit bearing__ _(
Apartment/Flat No.) ____, Built-up (Area): ___________, situated on the Floor
of a Building known as ______________ standing on the plot of land bearing
___________________________________________________
, of Village: , situated within the
revenue limits of Tehsil and Dist and situated within the
limits of Municipal Corporation.

39
IN WITNESS WHEREOF the parties hereto have set and subscribed their
respective signatures by way of putting thumb impression electronic signature
hereto in the presence of witness, who are identifying the executants, on the
day, month and year first above written.
Name and
address
Photo Thumb
impression
Digitally signed
Licensee
Name :
UID:
Address:
Photo Thumb
Licensor
Name :
UID:
Address:
Photo Thumb
Witness of
execution -cum-
identifier for
Name :
UID :
Address:
Photo Thumb
Witness of
execution -cum-
identifier for
Name :
UID :
Address:
Photo Thumb

40
GIFT
Gift in trust
A gift in trust is a special legal and fiduciary arrangement that allows for an
indirect bequest of assets to a beneficiary. The purpose of a gift in trust is to
avoid the tax on gifts that exceed the annual gift tax exclusion limit.
This type of trust is commonly used to transfer wealth to the next generation.
Gift of property
Gifting is an act, through which a person voluntarily transfers certain rights in
an asset to another person, without any consideration. Even though this is not
like a typical transaction, gifting of a house property has certain income tax
and stamp duty implications.
Legal requirement for the Gift deed
As per the Transfer of Property Act, the transfer of a house property under a
gift, has to be effected by a registered instrument/document, signed by or on
behalf of the person gifting the property and should also be attested by at least
two witnesses.
This means, one cannot just decide to gift a property and do so without
completing the legal procedure. Just like in the case of sale deeds, a gift deed
must also be registered in the sub-registrar‘s office, following the due
procedure.
The registrar shall ensure that proper stamp duty has been affixed on the gift
deed/document when it is presented for registration. The amount of stamp duty
and registration charges payable, with respect to a gift deed, are generally the
same as in the case of a regular sale. However, if the gift deed is executed
between some specified close relatives, some states provide concessions in
stamp duty. For example, Maharashtra has a cap on stamp duty payable on gift

41
of a residential or agricultural property to one‘s spouse, children, grandchildren
or wife of a son who has died, at Rs 200, irrespective of the value of the
property.
Owners gifting their property must be mindful of the fact that as soon as the gift
deed is registered, the owner loses his ownership over the gifted property. This
is to say, the provisions of the gift deed, just like a sale or a relinquishment
deed, come into effect immediately. This is not true in case of a Will, the
provisions of which come into force only after the creator of the Will passes
away.
However, do take note that a gift deed takes effect, only upon the payment of
the requisite stamp duty.
Income tax provision on gift deed
The provisions relating to gift tax have been dealt with under Section 56(2)(x)
of the Income-tax Act, 1961. These provisions have been briefly captured in the
form of the table below:
Kind of gift
covered
Monetary
threshold
Quantum taxable
Any sum of
money without
consideration
Sum > 50,000 Entire sum of money received
Any immovable
property such as
land, building etc
without
Stamp duty
value* > Rs
50,000
Stamp duty value of the property

42
consideration
Any immovable
property for
inadequate
consideration
Stamp duty
value* exceeds
consideration
by > Rs 50,000
Stamp duty
value Minus consideration Example
1:Stamp duty value Rs 2,00,000
Consideration Rs 75,000.Taxable
amount is Rs 1.25 lakhs (stamp duty
value exceeds consideration by > Rs
50,000) Example 2 In Example 1, if
consideration is Rs 1,60,000, taxable
gift is is Nil as stamp duty value does
not exceed consideration by > Rs
50,000
Any property
(jewellery,
shares, drawings
etc) other than
immovable
property without
consideration
Fair market
value *(FMV)
> Rs 50,000
FMV of such property
Any property
other than
immovable
property for a
consideration
FMV exceeds
consideration
by > Rs 50,000
FMV Minus consideration (Same
example in case of immovable
property can be referred)

43
Exemption from Gift tax
Category of donee(recipient of
gift)
Category of donor Occasion
covered
Individual (It may be relevant to
note here that while gift from
defined relative is not taxable for
donee, income from such gifts
may in some cases taxable in the
hands of donor itself – Example
clubbing provisions, deemed
owner concept in house property
etc)
Relative – spouse,
brother and sister of
self and spouse,
brother or sister of
parents or parents in
law, any lineal
ascendant or
descendant of self or
spouse, spouse of any
of the relatives
mentioned here.
NA
Individual Any person Marriage of
Individual
Any person Any person Under a will or
by way of
inheritance
Any person Individual In contemplation
of death of

44
donor or payer
Any person Local authority –
Panchayat,
Municipality,
Municipal Committee
and District Board,
Cantonment Board
NA
Any person from any fund or
foundation or
university or other
educational institution
or hospital or other
medical institution or
any trust or institution
referred to Section
10(23C)
NA
Any person Any charitable or
religious trust
registered
under section 12A or
section 12AA
NA
Any fund or trust or institution or
any university or other
educational institution or any
Any person NA

45
hospital or other medical
institution established for
charitable/religious/educational
/philanthropic purpose and
approved by the prescribed
authority. [Refer Section 10(23C)
(iv) (v) (vi) and (via)]
Members of HUF HUF Any distribution
of capital assets
on total or
partial partition
of a HUF
Trust created or established solely
for the benefit of relative of the
Individual
Individual NA
Due to extensive tax planning using gifts, gifts in India generally fall under the
scrutiny of the tax department, especially if the quantum is huge. Hence, it may
be advisable to maintain documentation to establish genuineness of gift received
and sufficient source of funds with the donor to justify the gift.
GIFTING PROPERTY IN INDIA
According to Section 122 of the Transfer of Property Act, 1882, you can
transfer immovable property through a gift deed. Like a sale deed, a gift deed
contains the details of the property, the transferor and the recipient. But unlike a
sale deed, it allows one to transfer ownership without any exchange of money.

46
A gift deed is a legal document that describes voluntary transfer of gift from
donor (owner of property) to donee (receiver of gift) without any monetary
favor in return. The donor should not be insolvent and should not use this as a
tool for evasion of tax and illegal gains.
Registering a gift deed with the sub-registrar is mandatory under the laws in
India (Section 17 of the Registration Act, 1908 and Section 123 of the Transfer
of Property Act.) If this is not done, the transfer will be invalid. Once a gift deed
is registered, only then the change in the title of ownership of property is
possible. Also, for the recipient to be able to further transfer the property, a
registered gift deed will be required.
WHAT CAN BE GIFTED?
The following conditions should be fulfilled for a property to be a valid gift:
1. It should be movable or immovable property.
2. It must be transferable.
3. It should be an existing property and not a future property.
4. It should be tangible or real.
5. The transferor and the receiver should be alive at the time of the gift.
ESSENTIALS FOR A VALID GIFT DEED
A gift deed should be specific and must also include all the essential elements
for the transfer of property of such nature. This is the reason it is advisable to
get the document drafted with the help of a lawyer. The following essential
things must be fulfilled for a gift deed to be successfully executed:
1. The gift deed should essentially mention the details of the property that is
being gifted.
2. Details of the recipient/receiver are also essential.

47
3. The deed must be signed by the donor i.e. the person gifting the property.
4. Both the donor and receiver must be present in the office of Registrar.
5. The document must be signed by at least 2 witnesses.
6. The deed needs to be stamped with an appropriate non-judicial stamp,
depending upon the value of the property.
WHO CAN MAKE A GIFT DEED?
A person who owns the property can make a gift to another person. An
exception to this rule is the case in which either the donor or the donee is a
minor. Minors are not eligible to form contracts; therefore, they cannot transfer
property as gift. If a donor is a minor, the gift deed is not valid and becomes
void.
In case of donee being a minor, a natural guardian can accept a gift on his
behalf. The guardian acts as a manager of the gifted property. If the gift is
onerous, it cannot be enforced on donee until he/she is a minor. Once the donee
is an adult, he must either accept or return the gift.
The guardians who can receive the gift on behalf of the minor or insane persons
are:
1. Father
2. Father‘s executor
3. Paternal grandfather
4. Paternal grandfather‘s executor
PROCEDURE TO GIFT A PROPERTY

48
The procedure to gift a property can be sub-divided into three steps mentioned
below:
1. Drafting the Gift Deed – A gift deed ensures a legal transfer of the gift and
should be drafted with the help of a lawyer. It describes what is being
transferred, who is transferring the property and to whom. It is a contract
between the donor and the donee where the donor is willingly giving his
property to donee and he/she is accepts the property. It is essential that a gift
must be made by a person voluntarily and not under any compulsion, and
without any exchange of money or any other consideration.
2. Acceptance – Acceptance of the gift deed is another important legal
requirement and the donee must accept the gift during the lifetime of donor. In
case the donee fails to accept the gift, it becomes invalid. The acceptance may
be validated by acts of the recipient such as taking possession of the property.
3. Registration – As per Section 123 of the Transfer of Property Act, a gift of
immovable property cannot pass any title to the donee unless it is registered. It
is mandatory to get it attested by two witnesses during and post registration.
Registration Fee and Stamp Duty for Gift Deed
The stamp duty and the registration fee for the gift deed vary from state to state.
In order to calculate the stamp duty and the registration fee, it is advisable to
consult a local lawyer. The charges for some major cities are listed below:
New Delhi -
In Delhi, the stamp duty and transfer duty is payable @ 4% if the donee is a
woman and @ 6% if the donee is a man. Registration fee is 1% of the total
market value of the property plus Rs.100/- pasting.

49
Bangalore -
In Bangalore, the stamp duty and registration charges depend upon who is
gifting the property:
1. If the donee is not a family member, then the stamp duty will be payable @
5% along with surcharge and cess. The registration fee is 1% of the total market
value of the property.
2. If the donee is a family member, then the registration fee will be Rs 1000 and
the stamp duty:-
 If the property is situated within BMRDA/BBMP/ City Corporation
limits, the stamp duty will be Rs 5000 along with surcharge and cess.
 If the property is situated within city/town/municipal/council/town
panchayat limits, then the stamp duty will be Rs 3000 along with
surcharge and cess.
 If the property is situated within the limits other than the places
mentioned in (i) and (ii), the stamp duty will be Rs 1000 along with
surcharge and cess.
Mumbai -
In Mumbai, the stamp duty and registration fee differ as per the type of the
property which is gifted, such as:-
1. In case of agricultural and residential land, the registration fee is Rs 200 and
the stamp duty is Rs 100, where 1 % is the LBT of the total market value of the
property.
2. In case of any immovable property which is given to a family member, stamp
duty is 3% of the market value of the property along with 1% registration fees.
If a person other than the family member is giving the property, then in that case

50
the stamp duty will be 5% of the market value of the property along with 1 %
registration fees.
Chennai -
The registration fee for the gift deed in Chennai is 1% of the property‘s market
value and stamp duty for the gift deed is 7% of the market value of the property.
Kolkata -
In Kolkata, the values of the registration fee and the stamp duty differ, based
upon who is gifting the property.
1. When the gift deed is made by a family member, the stamp duty is 0.5% of
the market value of the property.
2. When gift deed is made by a person other than a family member:
 If the property is situated in the Panchayet Area, then the stamp duty will
be 5% of total market value of the property.
 If the property is situated in Municipal Areas, Corporation Areas, then the
stamp duty will be 6% of market value of the property.
 If the market value exceeds 40 lakh in both urban and rural areas, then
additional stamp duty of 1% will be charged.
This fee can be paid through demand draft, cheque or cash at the office of sub-
registrar.
Duration of the Process of Gift Deed
According to Section 23 of the Registration Act, 1908 a gift deed should be
presented before the officer within 4 months from the date of its execution. The
final registration process takes at least 1- 3 weeks of time period.

51
Sample Format of a Gift Deed
GIFT DEED
This deed of Gift is executed on ________ day of ______________ month of
_____________ year by Sri./Smt.__________________________, S/o./
W/o.____________________________, occupation____________________,
and aged __________ years, residing
at_______________________________________________________________
__
________________________________________________________________
_. herein after called the DONOR.
In favour of
Sri./Smt.__________________________S/o./W/o._______________________
__, occupation____________________, aged __________ years, residing
at_______________________________________________________________
__
________________________________________________________________
_ Herein referred to as the DONEE.
Whereas, the term Donor and Donee unless repugnant to the context shall mean
and include their representatives heirs, successors, executors, administrators,
trustees, legal representatives and assigns.
Whereas, the Donor herein, is the sole and absolute owner of immovable
property bearing No.___________ known as _____________________
situated at morefully described in the schedule hereunder written and herein
after called the schedule property.
Whereas, the Donor is the absolute owner, having acquired the property, by
____________________ and since then Donor has been in possession and

52
enjoyment of the schedule property and paying taxes and levies thereon, as sole
and absolute owner thereof.
Whereas the Donee is related to the Donor as ____________.*
Whereas the Donor desires to grant the said land and premises morefully
described in the schedule written hereunder and hereinafter referred as
scheduled property to the Donee as gift in consideration of natural love and
affection subject to the condition herein after mentioned. NOW THIS DEED
WITNESSETH that the Donor, without any monitory consideration and in
consideration natural love and affection which the Donor bears to the Donee
hereby grant and transfer by way of gift, the scheduled property situated at
___________________________together with all the things permanently
attached thereto or standing thereon and all the liberties, privileges, easements
and advantages appurtenant thereto and all the estates, rights, title, interest, use,
inheritance, possession, benefits, claims and demand whatsoever of the Donor
TO HAVE AND TO HOLD the same unto the use of the Donee absolutely but
subject to the payment of all taxes, rates, assessments, dues and duties now and
here after chargeable thereon to the Government or local authorities.
Whereas the Donor hereby covenant with the Donee;
(a) That the Donor now has in himself, absolute right, full power, and
absolute authority to grant the said scheduled property hereby
granted as gift in the manner aforesaid.
(b) The Donee may at all times herein after peacefully and quietly
enter upon, take possession of the scheduled property and enjoy
the said scheduled property as he deems fit without any
interruption, claim or demand whatsoever from or by the Donor or
his heirs, executors, administrators and assigns or any person or

53
persons lawfully claiming or to claim by from under or in trust for
the Donor.
(c) AND FURTHER that the Donor and all persons having or lawfully
claiming any estate or interest whatsoever to the said scheduled
property and premises or any part thereof from under or in trust for
the Donor or his heirs, executors, administrators and assigns or any
of them shall and will from time to time and at all times hereafter
at the request and cost of the Donee do and execute or cause to be
done and executed all such further and other acts, deeds, things,
conveyances and assurances in law whatsoever for better and more
perfectly assuring the said scheduled property and every part
thereof unto and to the use of the Donee in the manner aforesaid as
by the Donee his heirs, executors, administrators and assigns or
counsel in law shall be reasonably required
SCHEDULE OF THE PROPERTY
(Gifted under this deed)
All the piece and parcel of immovable property bearing No.____________
Measuring _______________
Bounded by:-
On the East :
On the West :
On the South :
On the North :

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Market value of the property gifted under this deed is Rs._____________
(Rupees____________________________________only). The Stamp duty is
paid on the market value as computed above. IN WITNESS WHEREOF the
Donor as well as the Donee (by way of acceptance of the said gift) have put
their respective hands the day and year first herein above written.
WITNESSES :
1. DONOR
2. DONEE

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TESTAMENTARY SUCCESSION OF REAL ESTATE PROPERTY
Real estate in India is administered and impacted by a combination of central
and state-specific laws. The right of inheritance is passing the titles, rights,
debts, property, and obligations to another person on the death of an individual.
Considering how priceless real estate assets are currently, legal heirs must
safeguard the property/asset after the death of the person in whose name the
property was registered.
Inheritance is the practice of transferring property, titles, debts, rights,
and obligations to the legal heir of a person upon the death of that person
either by way of „Will‟ or through the prevalent laws of succession. The
regulatory laws of inheritance differ among societies as per their religion and
have revolved over time.
Legal formalities to get the property transferred may differ depending upon the
nature of the property, legal heirs‘ rights over the property, the number of legal
heirs and many others etc.
What is a „Will‟?
A testament or more popularly known as will has been defined under the Indian
Succession Act, 1925 as a legal document or a declaration indicating the will of
a person. This legal document contains details like the names of 1 or more
persons who are to acquire, manage and benefit from his estate after his death.
A certified copy of the Will that is certified with the seal of a competent court of
law with a grant of administration of the property to the legatee/ executor of the
testator is called a ‘probate’. A probate, since it is a certified document of the
court acts as an evidence of the executor's authority.

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A court may initiate a legal proceeding also called as probate proceedings after
the death of the person who made the will (executor/ legatee) to determine the
authenticity of the Will that has been created. Ordinarily, during the course of
the court proceedings, the witnesses are asked to appear in the court to testify
upon the authenticity of the Will.
A Will can only be created by a competent person with a sound mind and who
is above 18 years of age i.e. not a minor. Additionally, the probate court does
not deal with the merits of the case but only decides upon the validity of the
Will in question.
Who can be an heir under Indian law?
Under Indian law, an heir is a person determined to succeed to the estate of an
ancestor who died intestate i.e. without creating a will. In India, legal heir is
popularly used to refer to an individual who supersedes to property, either by
law or a will.
Why is it important to identify a legal heir?
It is crucial to identify a legal heir because they are the ultimate successors over
matters relating to insurance claims as well as property inheritance.
Who is a legal heir under Hindu law?
The following can be legal heir under the Hindu Succession (Amendment) Act,
2005:

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Class I:
 Widow,
 Daughter,
 Mother,
 Son,
 Daughter of a son who is deceased
 Daughter of a daughter who is deceased
 Daughter of a pre- deceased son of a pre- deceased son
 Widow of a son who is deceased
 Widow of a pre- deceased son of a pre- deceased son.
 Son of a son who is deceased
 Son of a daughter who is deceased
 Son of a pre- deceased son of a pre- deceased son
Who can be an heir in case no one mentioned above is alive?
In case, there is no heir left from Class I, then the property goes to the heirs of
Class II, who are the relatives defined under the Indian Succession Act. The
defined Class II heirs are:
Class II:
I
 father

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II
 son‘s daughter‘s daughter,
 son‘s daughter‘s son,
 sister,
 brother
III
 daughter‘s daughter‘s daughter
 daughter‘s daughter‘s son,
 daughter‘s son‘s son,
 daughter‘s son‘s daughter,
IV
 sister‘s son,
 sister‘s daughter
 brother‘s daughter,
 brother‘s son,
V
 father‘s mother
 father‘s father
 father‘s widow

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 brother‘s widow.
VII
 father‘s sister
 father‘s brother
VIII
 mother‘s mother
 mother‘s father
IX
 mother‘s sister
 mother‘s brother
Who can be a legal heir of a female Hindu?
The property of a female Hindu dying intestate will get transferred to:

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 the sons and daughters (which includes the children of any son or
daughter who are not alive) and the husband,
 the heirs of her husband,
 to her mother and father,
 to the heirs of her father; and
 to the heirs of her mother.
 Under the Act, if any estate succeeded by a female from her father or
mother will get transferred, in the absence of any daughter or son of the
dead (including the children of any pre- deceased daughter or son) to the
heirs of her father.
 Under the Act, if any estate succeeded by a female from her husband or
from her father-in-law will get transferred, in the absence of any daughter
or son of the dead (including the children of any pre- deceased daughter
or son) to the heirs of her husband.
Who is a legal heir under Muslim law?
Under the Muslim Personal Law (Shariat) Application Act, 1937 the following
can be legal heir:
 Husband: The marriage must be legal. Undocumented or secret marriages
are not entitled.
 Wives: Multiple wives are entitled. A divorced wife is also entitled but
only if iddah period is not yet complete.
 Sons: Step sons, adopted sons and illegitimate sons are not entitled.
 Daughters: Step daughters, adopted daughters or illegitimate daughters
are not entitled.

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 Grandsons: Daughter‘s sons are not entitled but son‘s sons are entitled
 Granddaughters: Daughter‘s daughter‘s are not entitled but son‘s
daughters are entitled.
 Father: Step- father or illegitimate father not entitled.
 Mother: Step- mother or illegitimate mother not entitled.
 Grandfather: Mother‘s father is not entitled but father‘s father is entitled.
 Paternal Grandmother: Father‘s mother is entitled.
 Maternal Grandmother: Mother‘s mother is entitled.
 Full Brothers: All those brothers are entitled who share the same father
and mother with the deceased person.
 Full Sisters: All those sisters who share the same father and mother with
the deceased person.
 Paternal Brothers: All those brothers who share the same father, but a
different mother.
 Paternal Sisters: All those sisters who share the same father, but a
different mother.
 Maternal Brothers: All those brothers who share the same mother, but a
different father.
 Maternal Sisters: All those sisters who share the same mother, but a
different father.
 Full Nephews: Brother‘s son is entitled but sister‘s son is not.
 Paternal Nephews: Paternal brother‘s son is entitled but paternal brother‘s
daughter is not.
 Full brother‘s son‘s son

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 Paternal brother‘s son‘s son
 Father‘s full brother
 Father‘s paternal brother.
 Father‘s full brother‘s son
 Father‘s paternal brother‘s son.
 Father‘s full brother‘s son‘s son.
 Father‘s paternal brother‘s son‘s son.
 Father‘s full brother‘s son‘s son‘s son.
 Father‘s paternal brother‘s son‘s son‘s son
Who is a legal heir under Christian law?
Under Section- 32 of the Indian Succession Act, 1925, a Christian legal heir is a
wife, a husband or the kin of the deceased, for instance,
 Widow
 Daughter
 Son
 Mother
 Father
 Sister
 Brother
 Direct blood line, as between a son and his father, grandfather and great-
grandfather, and so on in the direct increasing blood line; or between a

63
son and his son, grandson, great- grandson and so on in the decreasing
blood line.
 If a person has died intestate and is only left with a great- grandfather, an
uncle, and a nephew, but no person with direct kinship will take equal
shares as under the 3rd
degree of kinship.
Who is a legal heir under Parsi law?
Under Section- 54 of the Indian Succession Act, 1925, a legal heir under the
Parsi personal laws are as follows:
 Both mother and father
 Both sisters and brothers (excluding half sisters and brothers) as well as
lineal descendants of them
 Both paternal as well as maternal grandparents
 Children of both maternal and paternal grandparents and their lineal
descendants
 Maternal and paternal grandparents‘ parents
 Maternal and paternal grandparents‘ parents‘ children and their lineal
descendants
In case, a Parsi Indian dies intestate with no lineal descendants nor a
widow or a widower the following are entitled to the property:
 Both mother and father
 Both sisters and brothers (other than half sisters and brothers) and their
lineal descendants
 Both maternal and paternal grandparents

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 Children of both maternal and paternal grandparents and their lineal
descendants
 Both maternal and paternal grandparents‘ parents
 Both maternal and paternal (grandparents‘ parents‘ children) and their
lineal descendants.
 Half sisters and brothers and their lineal descendants
 Widowers of sisters and/ or half sisters and widows of brothers and/ or
half brothers
 Maternal and paternal grandparents‘ children‘s widows or widowers.
 Widows or widowers of the deceased lineal descendants who did not
remarry
Can a child born in a live- in relationship be a legal heir in India?
In a landmark judgment in 2008, the Supreme Court of India in Vidyadhari v/s
Sukhrana Bai permitted the inheritance right to the children born in a live-in
relationship and thereby acknowledged them with the ―legal heir‖ status.
What is the procedure to get a legal heir certificate?
The first step is to apply for a Legal Heir Certificate under the District
Tehsildar Officer via the District Court having the jurisdiction over the area.
The second step is based on the report of the Village Administrative Officer as
well as the Revenue Inspector of the District and after the mandatory inquiry, a
certificate legal heirship is issued to the concerned person by the District
Authority. The certificate provides the names of all the legal heirs of the
deceased person.
The following documents/ details are required to get a legal heir certificate:

65
 Name of the deceased person
 Names and the relationship of family members with the deceased
 Signatures of the Applicant
 Residential Address of the Applicant
What is the right of inheritance?
The right of inheritance is primarily a transfer of the individual‘s property,
debts, titles, rights, and obligations to another individual upon the death of that
person.
An Indian can succeed to or inherit one‟s property and etc. in 2 distinct
ways:
1. Through a will which is the testamentary succession-The individual who
creates the will is called the testator and the individual in whose favour the will
is created is known as the legatee.
2. Through the laws of succession when person dies intestate-In situations
where the person dies intestate i.e. without creating a will then that person‘s
property is transferred among his legal heirs by the applicable laws of intestate
succession.
What are the different laws that govern inheritance in India?
The laws of inheritance in India are applicable based on types of succession and
religion which include:

66
 The Hindu Succession Act, 1956/ 2005 - This Succession law applies on
succession without a will i.e. intestate succession among Hindus which is
also applicable to Sikhs, Jains and Buddhists.
 The Indian Succession Act, 1925 - This Succession law is applicable on
transfer of property of Hindus by a ‗Will‘ i.e. a testamentary succession.
This law allows any individual to transfer his own property to any
individual he wants legally by getting a ‗Will‘ drafted.
A ‗Will‖ can be created by a property lawyer against self- acquired
properties in India.
Types of properties that are recognised in India
In India, the following properties are recognised by the Indian property laws:
 Self- acquired property - In case a person obtains a property on his own
and that property is not owned by his father, then that property is
categorised as a self- acquired property.
 Joint Family property - In case a property is inherited by a Hindu
person from his father, father‘s father or father‘s fathers‘ father, then the
property is categorised as a joint family property provided the family has
a common bloodline. The same is not a distinct entity and therefore, has a
never- ending existence.
 Separate property - In case a person obtains a property from any other
relation (different ancestors), which is subjected to not be treated as joint
family property is categorised as a separate property.

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Inheritance rights of children in India
Under Indian succession laws, a son has a right in his father‘s and grandfather‘s
property by birth. The son has equal rights as does his father in his grandfather‘s
ancestral property. Besides this, in a situation where the father has a self-
acquired property or a separate property and he dies intestate, then the son who
is a Class I heir will have succession rights equal to his living mother, sister,
grandmother and brother.
However, an illegitimate son does not have a right in his father‘s property.
Besides this, a child who is still not born but in the mother‘s womb has a right
in his father‘s property even if he has died intestate. But the sole condition to
avail the right to succession is for the father to have be alive when the child was
born.
Inheritance rights of daughters in India
The property rights for a son and a daughter were totally different before 2005,
earlier, only an un-married daughter had a right to share in the ancestral
property. However, after 2005, a daughter was granted similar rights as well as
duties as that of a son. A daughter has equal share of right in the ancestral
property.
Besides this, in a situation where the father has a self- acquired property or a
separate property and he dies intestate, then the daughter who is a Class I heir
will have succession rights equal to her living mother, sister, grandmother and
brother.
Inheritance rights of grandchildren in India
Every grandchild including both grandson and granddaughter have the equal
right to share in the ancestral property of their grandfather with their father.
In a situation where the property of grandfather is either self- acquired or

68
separate, then the grandson will have inheritance right only when his father died
before his grandfather.
In heritance rights of a spouse in India
A wife has no right to share in the ancestral property. As a result, a widow has
absolutely no right over her husband‘s ancestral property. However, since a
wife is a Class I heir, the wife will have the right in the self- acquired property
of her husband. Moreover, even a widowed mother also has a right in her son‘s
property.
Inheritance rights of an adopted child in India
In India, the rights of inheritance of an adopted child are quite similar to that of
a natural born child.
However, once adopted, the child relinquishes his/ her property rights in the
biological family however if the child obtains a property before the adoption,
then the property shall continue to be in his/ her name.

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FAMILY SETTLEMENT
Property disputes are a common occurrence in India. Since greed is a
great leveller, wars over wealth take place across the strata, from low-income
households to ultrarich families. Even an iron-clad will may be challenged by
unhappy beneficiaries. The obvious solution for most squabbling relatives is to
take the matter to the courts.
In a nutshell, a family settlement is an agreement where family members
mutually work out how a property should get distributed among themselves. All
the parties should be related to each other and have a clai to a share of the
disputed property. The latter need not be limited to real estate, but can also
cover movable assets like jewllery or money in bank accounts. A family
settlement is usually used to settle common property or joint property that the
family owns as opposed to individual or self-acquired property.
Those who wish to avoid protracted , public messy court battels will find that
family settlements are a quicker more harmonious way to resolve disputes, of
course a family may not be able to reach a consensus, in which case the legal
recourse is the only way out
What is the process?
This is a conciliation process where a third person, usually a lawyer or a senior
family member, helps the family arrive at a mutually acceptable solution to the
property dispute. A family settlement need not strictly be a single document
incorporating the disributing of assets. It may also be a series of documents
spelling out the property righs of each family memebr.
Say a family of two brothers and a sister are squabbling over a flat, an office
and some ancestral jewellery. They could draw up a settlement agreement
starting that the oldest brother gets the flat, the sister bags the jewellery and the
office goes to remaining sibling.

70
The most importat thing to remember is that this instrument is neither treated as
a gift nor as transfer as per the income tax laws. So one would have to draw up
separate transfer of property documents in addition to the family settlemtn
agreement – to bring about an actual transfer. This is where instrument like gift
and sales deeds come into play.
Legal requirement
Merely reaching a concesensus is not enough; there are a few legal formalities
that must be completed to ensure that the agreement is valid. Firstly, the
settlement document must be signed by all the family members involved.
The next step is to register the agreement. According to section 17 of the
Registration act, 1908, a family settlement that purpots to assign immovable
property must be mandatorily registered or the deed would be invalid.
As stamp duty is applicable on such deeds and the amount would depend on the
value of the property involved.
Is a family settlement the end of the road?
While a duty executed family settlement cannot be revoked, except with a court
decree, it can be challanged in a court of law. An agreement that is brough
about by fraud or cercion is a case in point.
Any misrepresentation of facts regarding the title of the disputed property too
can lead to a future altercations.
Another common ground on which it is challenged is improper execution.
Paying heed to these common tripwires while drawing out an agreement will
result in a foolproof, amicable and binding family settlement, which benefits
everybody.

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MORTGAGE
A mortgage is a loan that the borrower uses to purchase or maintain a home or
other form of real estate and agrees to pay back over time, typically in a series
of regular payments. The property serves as collateral to secure the loan.
How mortgage work?
Individuals and businesses use mortgages to buy real estate without paying the
entire purchase price upfront. Over a specified number of years, the borrower
repays the loan, plus interest, until they own the property free and clear.
Mortgages are also known as "liens against property" or "claims on property." If
the borrower stops paying the mortgage, the lender can foreclose on the
property.
For example, in a residential mortgage, a homebuyer pledges their house to the
bank or other lender, which then has a claim on the property should the buyer
default on paying the mortgage. In the case of a foreclosure, the lender may
evict the home's residents and sell the property, using the money from the sale
to pay off the mortgage debt.
Mortgage under the Transfer of Property Act, 1882
Sections 58 to 104 of the Transfer of Property Act, 1882 deals with mortgages
and charges.
Few definitions:
 Mortgage
A mortgage is the transfer of an interest in immovable property for the purpose
of securing the payment of money advanced, an existing or future debt or the
performance of an engagement which may give rise to a pecuniary liability.
 Mortgagor and Mortgagee

72
The person who transfers the interest in an immovable property is called the
mortgagor.
The person to whom it is transferred is called the mortgagee.
 Mortgage Money
The principal money and interest of which payment is secured for time being is
called mortgage money.
 Mortgage Deed
The instrument by which the transfer is effected is called a mortgage deed.
Essential conditions of a mortgage:
1. There is a transfer of interest to the mortgagee.
2. The interest created in specific immovable property.
3. The mortgage should be supported by consideration.
Kinds of Mortgage
As per Section 58 of Transfer of Property, there are six kinds of mortgages
a. Simple Mortgage
 Simple Mortgage is defined under Section 58(b) of Transfer of Property
Act, 1882.
 In a simple mortgage, the mortgagor does not transfer immovable
property to the mortgagee but agrees to pay the mortgage money.
 The mortgagee agrees on a condition that in the event of not paying the
mortgage money the mortgagee has every right to sell the property and
can use the proceeds of the sale and such a transaction is called a simple
mortgage.

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b. Conditional Mortgage
 Mortgage by conditional sale is defined under Section 58(c) of Transfer
of Property Act, 1882.
 In this mortgagee places three conditions to the mortgagor, and the
mortgagee shall have the right to sell the property if:
1. mortgagor defaults in payment of mortgage money on a certain date.
2. as soon as the payment is made by the mortgagor the sale shall become
void.
3. on the payment of money by the mortgagor, the property is transferred
and such a transaction is called a mortgage by conditional sale.
c. Usufructuary Mortgage
 Usufructuary Mortgage is defined under Section 58(d) of Transfer of
Property Act, 1882.
 In this mortgage, the mortgagor delivers the possession of the property to
the mortgagee and authorises the mortgagee to retain such property until
the payment is made by the mortgagor and further authorise him to
receive the rent or profit arising from such mortgaged property and to
appropriate the same instead of payment of interest. Such a transaction is
called a Usufructuary transaction.
d. English Mortgage
 English Mortgage is defined under Section 58(e) of Transfer of Property
Act, 1882.
 In this mortgage, the mortgagor transfers the property absolutely to the
mortgagee and binds himself that he will repay the mortgage money on
the specified date and lays down a condition that on repayment of money

74
mortgagee shall re-transfer the property. Such a transaction is called an
English mortgage transaction.
e. Deposit of title-deeds
 Deposit of title -deeds are defined under Section 58(f) of Transfer of
Property Act, 1882.
 In this mortgage where a person is in Calcutta, Madras, Bombay and in
any other towns as specified by the state government and the mortgagor
delivers to a creditor or his agent the documents of title of immovable
property with an intent to create security and then such a transaction is
called Deposits of title-deeds.
f. Anomalous Mortgage
 An Anomalous Mortgage is defined under Section 58(f) of Transfer of
Property Act, 1882.
 A mortgage which is not any one of the mortgages mentioned above is
called an anomalous mortgage.
Rights of Mortgagor
a. Right of Redemption
As per Section 60 of the Transfer of the Property Act, 1882 one of the important
rights of the mortgagor is the right to redeem the mortgage.
 Once the money has become due on the specified date the mortgagor has
the right to get back the mortgaged property on paying the money to the
mortgagee.
 Right to redemption is a statutory and legal right which cannot be
extinguished on the entering into any agreement.
b. Right to transfer to a third party

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 As per Section 60A of the Transfer of Property Act, 1882 the mortgagor
may direct the mortgagee to assign the mortgage debt and authorise him
to transfer the property to a third party instead of transferring him the
same.
 The object of this section is to enable the mortgagor to pay off the debt of
the mortgagee by taking a loan from another person on the security of the
same property.
c. Right to inspection and production of documents
 As per Section 60B of the Transfer of Property Act, 1882 the mortgagor
may inspect anytime the document of title relating to the mortgaged
property which is in the custody of the mortgagee.
 The costs and expenses incurred while inspecting the documents may be
borne by the mortgagee.
d. Right to accession
 As per Section 63 of the Transfer of Property Act, 1882 during the
subsistence of the mortgage if any accession is made to the mortgaged
property where the property is in possession of the mortgagor itself and
then the mortgagor has a right to take in accession after the redemption of
the mortgage.
 Accession can be of two types:
1. Natural accession.
2. Acquired accession.
e. Right to improvement
 As per Section 63A of the Transfer of Property Act, 1882 during the
subsistence of the mortgage if any improvement is made to the property

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where the property is in possession of the mortgagee and then the
mortgagor has a right to take the improvements made to the property
upon the redemption.
 But where the improvements were at cost of the mortgage by preserving
the property from destruction then the mortgagor is liable to pay the cost
which is incurred by the mortgagee in preserving the property.
f. Right to a renewed lease
 As per Section 64 of the Transfer of Property Act, 1882 where the
property which the mortgagor has given for mortgage is a leasehold
property if the mortgagee renews the leases during the subsistence of
mortgage the mortgagor shall obtain the benefit of the lease upon the
redemption of the mortgage.
g. Right to grant a lease
 As per Section 65A of the Transfer of Property Act, 1882 a mortgagor
shall have the right to grant a lease of which is lawfully in possession
with the mortgagee and such lease shall be binding on the mortgagee
subject to the following conditions:
1. lease shall be according to the local laws, custom or usages.
2. no rent or premium shall be paid in advance.
3. the lease shall not contain a covenant for renewal.
4. the lease shall come into effect within six months from the date on which
it is made.
5. in case lease of buildings, the duration of the lease shall not exceed not
more than three years.

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Liabilities of Mortgagor
Section 65 and 66 of the Transfer of the Property Act, 1882 deals with the
liabilities of the mortgagor.
Section 65 is the implied liabilities which are laid upon the mortgagor. Subject
to the contrary, every mortgagor is deemed to have made the following
covenant.
a. Covenant for title
 As per Section 65(a) of the Transfer of the Property Act, 1882 there is an
implied covenant that the mortgagor transferring the interest in the
property to the mortgagee belongs to the mortgagor only.
 And it is necessary that the mortgagor possess the transferable interest in
the property.
 In case mortgagor makes a breach in the covenant the mortgagor is liable
to compensate.
b. Covenant for the defence of the title
 As per Section 65(b) of the Transfer of the Property Act, 1882 the
mortgagor has a duty impliedly to either defend the title if anyone tries to
take away the title from the mortgagee or help the mortgagee in
defending the title.
 By doing so, the mortgagor bears all the expenses incurred while
defending the title.
c. Covenant for payment of public charge
 As per Section 65(c) of the Transfer of the Property Act, 1882 there is an
implied duty to the mortgagor that upon the execution of the mortgage the
mortgagor shall pay all the necessary changes.

78
 If the mortgagor fails to meet the required charges the property would be
sold by the public authorities and realise the charges.
d. Covenant for payment of rent
 As per Section 65(d) of the Transfer of the Property Act, 1882 where the
property mortgaged by the mortgagor is a leasehold property there is an
implied duty of the mortgagor to pay the rent of the mortgaged property.
e. Covenant for the discharge of prior mortgage
 As per Section 65(e) of the Transfer of the Property Act, 1882 there is
implied duty of the mortgagor to discharge the prior mortgage if any.
 There is always a presumption that the mortgagor has a covenant with the
subsequent mortgages to pay off the mortgage on becoming due.
 In such subsequent mortgage if the mortgagor makes a breach the
subsequent mortgagee would have the right to sue for his mortgaged
money.
Mortgagors liability for waste
 Section 66 of the Transfer of the Property Act, 1882 states there is an
implied duty on mortgagor that he shall not do any act which is injurious
or destructive to the mortgaged property.
 Mortgagee should also see that he also does not commit any act which
results in reducing the value of the mortgaged property.
 Following activities are considered as waste by the mortgagor:
1. Removing valuable fixtures from the mortgaged property.
2. Pulling down the mortgaged house and taking the price of the materials.
3. Cutting down the timber from the mortgaged property.

50 tips for safe real estate transactions

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