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Home Articles

Transfer of Property Act, 1882 – Everything You Need to Know

by Sanvi Mariam
July 29, 2022
in Articles, General Knowledge
Transfer of Property Act, 1882 - Everything You Need to Know
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Table of Contents

  • What is Movable and Immovable Property?
  • Scope of the Transfer of Property Act
  • History of the Transfer of Property Act 1882
  • Property Transfer to An Unborn Child
  • Who is Eligible to Transfer Property?
  • Transfer Under Transfer of Property Act 1882: What are the kinds of transfers?
  • Types of property transfer under the Transfer of Property Act
  • Key Elements of the Transfer of Property Act 1882
  • Principles Guiding the Transfer of Property

The Transfer of Property Act 1882 is law enacted by the Indian government on July 1, 1882. The law covers every aspect of transferring property between living things (inter vivos). Transfer of property, as defined under the act, is the conveyance of a property from one person to one or more persons, or to himself. The transfer may also involve a business, organization, or group of people, and it may be agreed to carry out the property transfer (of an existing property) now or in the future.

Immovable and movable property are the two broad forms of property under the Indian legal system. Regulations for the transfer of both movable and immovable property are included in the Law of Transfer of Property Act. The act’s definition of “transfer” broadly refers to transfers made by a mortgage, exchange, gift, sale, assertible claim, or lease.

What is Movable and Immovable Property?

Movable Property

Property that may be transported from one location to another without affecting its quality, capacity, or quantity is referred to as movable property. Personal property, growing grass/crops, vehicles, books, standing wood, etc., are a few instances of transportable property.

Movable property can be transferred simply by being delivered with the intention of doing so. The Indian Registration Act of 1908 also makes the registration of movable property optional.

Immovable Property

Property that cannot be moved or that can only be moved after being changed or destroyed is referred to as immovable property. Immovable property includes things like real estate, houses, property rights, items affixed to the land, and so forth.

Immovable property cannot be transferred through simple delivery of the asset. It must be registered under the transferee’s name. According to the Indian Registration Act of 1908, it is required to register immovable property if it’s worth is greater than one rupee.

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Scope of the Transfer of Property Act

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    In general, there are two ways to transfer property: by a legal act or through an act of two or more parties. Immovable property transfers are principally covered by the Transfer of Property Act.

    The statute, however, does not apply to property transfers made by operation of law, such as those resulting from forfeiture, order-based sales, inheritance, or insolvency. The statute does not apply to the distribution of property in the event of a will or property succession.

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    History of the Transfer of Property Act 1882

    The bill was changed by the Second Law Commission. Some of the rules were modified from the Property Act, 1881, which controls real estate in England, as well as the Law of Conveyancing. The legislation is easy enough for non-professional judges to grasp and was mostly tailored to fit the Indian populace.

    The Second Commission made numerous changes, but the legislation got more comprehensive. A special group was created to draft the required amendments to the current statute as a result. To widen the law’s application and fix its problems, several amendments were made.

    Property Transfer to An Unborn Child

    An interest in a property may be transmitted to an unborn child, and the person doing so must be older than 18. If the requirements are satisfied, the property may be purchased in accordance with Section 25 of the 1882 Transfer of Property Act. If the condition changed and became unfeasible, illegal, unpopular, or immoral, the transfer would be null and void.

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    Who is Eligible to Transfer Property?

    The qualifying requirements for property transfers are outlined in Section 7 of the Transfer of Property Act. The transfer of property rule states that only a person who is able to create a contract with another is qualified to transfer property. Furthermore, even if they are not the actual owners of the property, the person wishing to transfer it should be authorized to do so.

    A competent individual who is at least 18 years old must undertake any property transfer in addition to the aforementioned requirements. The individual transferring a property must be of sound mind, not be legally barred from doing so, and not be drunk. Additionally, the transfer of property must occur between living things (it can be an association, a company or a body of individuals).

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    Transfer Under Transfer of Property Act 1882: What are the kinds of transfers?

    In addition to the money, ownership is transferred from the buyer to the seller. The seller delivers tangible goods to the buyer. A mortgage, which uses the immovable property as collateral to obtain a loan, transfers ownership of the property to the buyer. The mortgagor is required to pay the principal loan plus interest in order to release the immovable property from the mortgages.

    In this case, ownership of the property is transferred from one object to another for a specified sum rather than changing hands. When two parties choose to transfer ownership of tangible property to one another, an exchange of property takes place. According to the 1882 Transfer of Property Act, a present is an accepted, violent or non-violent transfer of movable or immovable property from one person, the giver, to another person.

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    Types of property transfer under the Transfer of Property Act

    There are six categories of property transfers listed in the Transfer of Property Act:

    • Sale
    • Lease
    • Mortgage
    • Exchange
    • Gift
    • Actionable claim

    Key Elements of the Transfer of Property Act 1882

    1. A competent individual needs to transfer property. He or she must be a major or someone who is not legally barred, not inebriated, and of sound mind.
    2. Property must not be transferred before the title in order to be conveyed. Conveyance can be determined to be used in the future or can be done right now.
    3. The property must be “transferrable” in order to be transferred. Some assets cannot be transferred, including the right to sue, the right to future maintenance, stipends for members of the armed forces, the navy, political prisoners, and civil pensions, and the potential for an heir apparent to accede to an estate.
    4. The mentioned requirements must be met for the property to be transferable. The transfer would be void if the condition turned out to be illegal, immoral, impractical, or against public policy.
    5. Transferring property to an unborn child is prohibited. However, it may be transferred first in the favor of a person who is still alive on the transfer date. Until the child is born, the property will remain in this person’s name.
    6. The transfer of property shall not be subject to the perpetuity rule and shall be made throughout the life of the transferor.
    7. With the exception of situations that need for a formal agreement, property transfers can be done orally or verbally. For instance, the sale of movable goods valued at more than Rs. 100, the transfer of actionable claims, the leasing of real estate for a period longer than a year, the giving of real estate as a gift, etc.

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    Principles Guiding the Transfer of Property

    1. Transfer to be accomplished to a living or legal person: A transfer of the property between living or legal persons is the primary requirement for a successful transfer. Individuals, businesses, corporations, and associations are all acceptable, but partnerships are not.
    2. Transfer through Conveyance: A property may be transferred now or at a later time.
    3. The property must be transferable; the Transfer of Property Act, 1882, Section 6 identifies assets that cannot be transferred; if the subject asset falls into one of those categories, it cannot be transferred.
    4. A competent person must transfer the property. The individual transferring the property must be of sound mind, a major, or not otherwise disqualified under contract law.
    5. The transfer must be made using the appropriate form: Intangible property sales should be documented in writing with the appropriate government fees paid.
    6. The perpetuity prohibition: Since the perpetuity prohibition cannot be observed, property must be transferred while the owner is still alive. A property cannot be transferred to an unborn child, and it is important to remember that the individual receiving the property interest must be at least 18 years old.
    7. Property transfer with conditions: As we are aware, Section 25 of the Transfer of Property Act of 1882 allows for the transfer of property with conditions. However, the transfer would be deemed invalid if the condition were to become impractical, illegal, against the interests of the public, or immoral.

    Conclusion

    The goal of the Act was to produce a complete law that explains the transfer in plain language. It was incomplete and lacked a number of knowns when it was first introduced. The law has through numerous adjustment processes, and it has repeatedly shown to be effective. In India, a great deal more legislation needs to be passed, such as the 1882 Transfer of Property Act.

    I hope you found this article useful. The secret to clearing an exam is to prepare methodically and strategically. If you’re a candidate looking to start your dream job but don’t know where to start, our Entri app has you covered. Our staff will provide you with content and insights on the topics that affect you. Become a member of our app today and enroll in one of the many programs available. Stay up to date on various elements of the subject you’re interested in by using the app. Please feel free to leave any questions or concerns in the comments area. We will make every effort to reach back. Remove any self-doubts and negative thoughts from your mind. Make an effort to maintain a clear viewpoint. Consider why you desire this. Concentrate on the positive aspects of your situation and work diligently. Each day is a valuable gift that has been placed upon us, so make the most of it. Make an effort to improve yourself. Today is the day; let’s hope it goes well. Best wishes.

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    Sanvi Mariam

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