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This document outlines 8 key types of legal documents that should be scrutinized when examining the title of a piece of land: 1) Documents showing the chain of ownership such as deeds and wills. 2) Clearance certificates if the land exceeds the urban land ceiling. 3) Property records showing ownership names and details. 4) Documents from the sub-registrar mentioning past buyers and sellers. 5) Title certificates and search reports examining ownership over the past 13 years. 6) Safeguards if the land is owned by a minor, requiring court permission for transactions. 7) Permissions converting agricultural land to non-agricultural use. 8)
Ppt1
- 1. Legal Scrutiny Relating To Title Of The Land
- 2. • 1)Chain of conveyance/sale/partition/gift deed or will, by which land was acquired. These are documents by which the Title of a property is conveyed by the seller to the purchaser. Conveyance is the act of transferring ownership of a property from a seller to the buyer.
- 3. • 2) Urban Land Ceiling & Regulation Act (ULCRA) Clearance Certificate if applicable (it has been repealed in some states) - The ULCRA Act is a social legislation vide which the Government has set a limit on the maximum permissible vacant land holding by a single entity in an urban agglomeration. Depending on the location and zone classification, this maximum limit varies from 500 sq. mt. to 1500 sq. mt.. The excess vacant land is liable for acquisition by the respective State Governments. Any vacant land holding beyond this limit would require an exemption under various sections from the ULC authorities, which is governed by the Urban Development Department.
- 4. • 3)Property card extract (known by different names in different States, for example forms 2 and 6, 7/12 extract/Adangal/ 10(i) extract/ Chitta, etc.). This document shows the names of the owners of the property. It contains details such as the Survey numbers, area, date from which the current owner's names were registered as owners. The 7/12 extract is issued by the Tehsildar or the concerned local land/revenue authorities. Along with this, the corresponding record of rights in Form no.6 for last 30 years needs to be obtained/scrutinized.
- 5. • 4.Index II is a document issued by the office of the Sub- Registrar of Assurances. It mainly mentions the names of the sellers & purchasers of a property for which the document is registered. • 5.Title Certificate and Search report is issued by an advocate after conducting a search of the Title of the property, which is intended to be purchased. The Title Certificate would state if the property is unencumbered (an Encumbrance Certificate issued by the sub-registrar's office should also be scrutinized) and has a clear marketable title. This search report and Title Certificate can be obtained from one's own advocate or if the search has already been conducted by the current owner then one can have his/her advocate inspect these reports to ascertain the title of the property. This search on the Title of the property is taken for a minimum period of the last 13 years in continuity.
- 6. • 6)Safeguards in dealing with Minor property: A Minor is defined as a person who has not completed the age of 18 years. If a property is acquired by such a minor person, either by purchase or by inheritance, then such property is termed as Minor property. The legislations which deal with the concept of Minority are: o Indian Majority Act o Indian Contract Act • Section 11 of the Indian Contract Act states that "every person is competent to contract, who is of the age of majority according to the law to which he is subject, and who is of sound mind and is not disqualified from contracting by any law to which he is subject".
- 7. • Therefore, transactions in property belonging to a minor or person of unsound mind would be null and void. For the same reason, minors and persons of unsound mind cannot execute a valid Power of Attorney (POA) in favor of another person and purchase and sale of minor property must not be entertained through POA. However, Section 12 further clarifies that a person is said to be of sound mind for the purpose of making a contract if, at the time when he makes it, he is capable of understanding it and of forming a rational judgment as to its effect upon his interests. The father and mother are natural guardians of their minor children. However, simply by virtue of being natural guardians, they do not have right to deal with the Minor Property. An application has to be filed in the competent Court for obtaining permission to deal with the minor property or to create mortgage over the said property. Only after obtaining Court permission, it is advisable to purchase a property owned by a minor person.
- 8. • 7. Non agricultural permission (N.A.): If the land under consideration is agricultural land and if one intends to develop the said land for residential/ commercial/ industrial use, then such agricultural land has to be converted to non-agricultural land and an N.A. order has to be obtained from the Collector of the District where the property is located. Along with this, one needs to take the latest receipts evidencing the payment of N.A. tax. In cases where the conversion from agricultural use to N.A. use is not done within the stipulated period then, there should be an order from the concerned authority extending the period.
- 9. • 8. Clearance of the seller under section 230 A of the Income Tax Act, 1961. After the receipt of the No Objection Certificate under and before executing the Sale Deed, the Seller will be required to obtain clearance certificates under Section 230-A of the Income Tax Act, 1961.The Clearance Certificate under Section 230A of the Income Tax Act, 1961 is required only if the sale consideration exceeds Rs.5,00,000.
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