REGISTRATIONS

There are a few essential steps one needs to adhere to before a sale of a property is concluded. This will include the registration of the Sale Deed, the examination of the property in question, and affidavits on behalf of the seller that the property is unencumbered and that immunity and indemnity shall be provided in the event that any claim is brought as against the buyer. Of these, most of the onus is on the sellers to ensure that the property is free from all obligations on his end and that the title passes smoothly over to the buyer. The buyer, on the other hand, is at the mercy of the information the seller chooses to reveal regarding the status and encumbrances relevant to the transaction. Usually, the buyer is protected from any omission on the part of the seller, through Section 41 of the Transfer of Property Act, the transfer of property by an ostensible owner done in good faith by the buyer who has no way of verifying the truth about the ownership is protected and shall not be held voidable just on that basis.

This paper is concerned with a more relevant concern for the buyer: The responsibility of ensuring that the property that he purchases is free from encumbrances and that the title to the same is vested in the person posing as the owner of such property. It is important to note here that in the Transfer of Property Act, despite the good faith defences available to the buyer of the property, the caveat is always that the buyer has done everything in his power to verify the truth of the matter. This caveat is important since this forms the basis for dispute resolution in all matters involving the sale of immovable property where the defect in title is alleged by the buyer.

While it is important that the seller provides information in good faith, and that the buyer demands such information to be turned over to him, it is equally important that the buyer conducts his due diligence in concluding such a contract of sale. If there is any information that is relevant to the current transaction that the buyer is able to access within reasonable limits, then it becomes the onus of the buyer that such information is accessed and considered by the buyer. If the seller doesn’t provide such information as is easily verifiable by the buyer, it doesn’t become a ground for the voidability of the contract. This responsibility of the buyer is based on the ‘caveat emptor principle’ that the buyer should beware of the transaction he is entering into. While there is a mismatch in terms of the access to information between the parties, the public availability of title information has bridged the gap somewhat and made the burden on the buyer stricter in nature, as he will now have no claim against the seller, that the information was withheld from him.