“Under the transfer of property act nothing less than ownership or absolute interest may be transferred by way of sale”.
Introduction:
In Bangladesh property act is the most popular and vastly used act because of various reasons. Firstly, it is a small country with large population which indicates that land and other property is a precious and most wanted asset of all, intentionally or unintentionally it leads to more disputes rather than any other matter. So it has become the most popular matter in law. It is also very important for general people to know as much as possible about this subject. More or less most people is somehow related with lands and other properties, if people has no or few idea about this matter the more it increases its chance of getting violated. Land law of Bangladesh came from a long history chain of our culture. Since then it has been changed and modified accordance to the need and betterment of people of this country. By its very existence, society mandates interaction, exchange or transfer. A property, movable or immovable, is transferred from one person to another under various different situations and circumstances and for different values. The transfer may be a gift, an inheritance or an asset acquired by paying full value.
Property and its Types:
Before we discuss about property and its transfer act we need to know what the inclined meaning of property is and what can be consider as property, its characteristics and legally related issues. In general sense we mean property as a person owns anything that is that respective person’s property. But in law is has been defined more accurately and briefly “Property is any physical or intangible entity that is owned by a person or jointly by a group of people or a legal entity like a corporation. Depending on the nature of the property, an owner of property has the right to consume, sell, rent, mortgage, transfer, exchange or destroy it, or to exclude others from doing these things” .
There are different types of properties and they all have different types of law associated with transferring them or owning them. First of all these types are needed to be acknowledged to reach in depth of this matter and need to distinguish these properties and their characteristics.
There are two types of property:
Real property and Personal property. Most of the legal concepts and rules associated with both types of property are derived from English common law. Modern law has incorporated many of these concepts and rules into statutes, which define the types and rights of ownership in real and personal property.
Personal property, also referred to as movable property, is anything other than land that can be the subject of ownership, including stocks, money, notes, patents, and copyrights, as well as intangible property.
Real property is land and ordinarily anything erected on, growing on, or affixed to it, including buildings and crops. The term is also used to declare any rights that issue from the ownership of land. The terms real estate and real property generally refer to land. The term land, in its general usage, includes not only the face of the earth but everything of a permanent nature over or under it, including minerals, oil, and gases. In modern usage, the word “premises” has come to mean the land itself or the land with all structures attached. Residential buildings and yards are commonly referred to as premises.
The difference between real property and personal property is ordinarily easily recognizable. The character of the property, however, can be altered. Property that is initially personal in nature becomes part of realty by being possessed to it.
The term property can also be used other different senses as distinguished below:
i. Sale of Goods Act talks of property in goods when it means the ownership of them. In contract of sale of specific goods, the seller transfers the property (ownership) in goods to the buyer when the contract is made, and it is immaterial whether the time of delivery or of payment, or both, in the future. In the case Trling Vs Baxter, a haystack was burned down before the buyer took it away. It was held that the loss fell on the buyer and he had to pay the price because the property was passed to him at the time of the contract.
ii. Usually the word property means the things which are capable of being owned, although they need not exist in tangible form. Hence in this sense the term property includes:
a. Things in Possession – such as pens, books, desks, chairs, watches etc. These are also known as chooses in possession.
b. Things in action – These have no physical existence and include things such as debts, patents, copyrights, trademarks, shares, negotiable instruments, etc. They are called chooses in action, which can be enforced only by action and not by taking possession. Thus a thing or things capable of ownership need not necessarily be tangible,
Transfer of property act:
“Transfer of property means an act by which a living person conveys property, in present or in future to one or more other living persons, or to himself, or to himself or more other living persons; and “to transfer property” is to perform such act. In this section “living person” include a person or association or body of individuals, whether incorporated or not, but nothing herein contained shall effect any law for the time being in force relating to transfer of property to or by companies , associations or bodies of individuals”.
It is important to note the meaning of the word property as applied in the act. Property has been given a rather wide spectrum covering both tangible material things, e.g., land and houses as well as rights which are not exercised over any material, e.g., a right to repayment of a debt. The word ‘transfer’ in the Act has also been used in a wide sense. It may mean either transfer of all the rights and interests in the property or transfer of one or more of subordinate rights in the property. Thus, the expression ‘transfer of property’ may, therefore, imply either transfer of things, transfer of one or more of the rights in a thing, or transfer of a debt.
Transfer of property is a legal contract that can be written and orally contract. This will follow the law of contract.
Who can transfer?
Land owners can transfer their land to anyone or any corporate entity they wish. Usually, lands are bought and sold between individuals and corporations, but they can also be freely given. A land owner can also will their title to any beneficiary they have named. Land may also be transferred as a result of bankruptcy, death, expropriation, a tax enforcement proceeding or court order. A title may be held by one or more individuals or corporations. A title may also be transferred to one or more individuals or corporations. This means that a number of possible title transfer options exist. Transaction types can vary from the simple, like a transfer of a residential lot between one individual and another, to the more complex, like the transfer of multiple lots in a large subdivision between a variety of individuals and groups.
Rights and Duties of Seller and Buyer:
The rights and duties of seller and buyer are subject to the contract. In the absence of any contract to the contrary, the rights and duties of seller and buyer are governed by section 55, Transfer of Property Act. The rights and duties of seller and buyer under the provisions of section 55 of Transfer of Property Act are as under:
Duties of seller before sale
- To disclose any material defect- The seller is bound to disclose to the buyer any material defect in the property or in the sellers title thereto of which the seller is and the buyer is not aware, and which the buyer could not with ordinary care discover. A latent defect is a defect, which cannot be discovered by the buyer with ordinary diligence.
- To produce documents of title- The seller is bound to produce to the buyer on his request for examination all documents of title relating to the properties which are in the seller possession or power.
- To answer question about the property or the title thereto- The seller is bound to answer to the best of his information all relevant questions put to him by the buyer in respect to the property or the title thereto.
- To execute conveyance- The seller is bound on payment or tender of the amount due in respect of the price, to execute a proper conveyance of the property, when the buyer tenders it to him for execution at a proper time and place. The seller is bound to execute conveyance on the payment of price by the buyer.
- To take care of the property and title documents- The vendor is bound between the date of the contract of sale and the delivery of the property, to take as much care of the property and all documents of title relating thereto, which are in his possession as an owner of ordinary prudence would take of such property and documents.
- To pay outgoings- The seller is bound to pay all public charges and rent accrued due in respect of the property up to the date of the sale, the interest on all encumbrances on such property due on such date, and, except where the property is sold subject to encumbrances to discharge all encumbrances on the property then existing.
After sale:
To deliver possession of the property- The seller is bound to give, on being so required, the buyer or such person as he directs, such possession of the property as its nature admits.
- Implied covenant for title- The seller shall be deemed to contract with the buyer that the interest which the seller professes to transfer to the buyer subsists and that he has power to transfer the same.
- To deliver title deeds on receipt of consideration- Where the whole of the purchase money has been paid to the seller, he is bound to deliver to the buyer all documents of title relating to the property which are in the seller’s possession or power;
Seller’s right before sell:
To take rents and profits- The seller is entitled to the rents and profits of the property till the ownership thereof passes to the buyer.
Buyer’s duties before completion of sell:
To disclose fact which materially increases the value of property-The buyer is bound to disclose to the seller any fact as to the nature or extent of the seller’s interest in the property of which the buyer is aware, but of which he has reason to believe that the seller is not aware, and which materially increases the value of such interest.
- To pay price for the property- The buyer is bound to pay or tender, at the time and place of completing the sale, the purchase money to the seller or such person as he directs; provided that, where the property is sold free from encumbrances, the buyer may retain, out of the purchase money, the amount of any encumbrances on the property existing at the date of the sale and shall pay the amount so retained to the persons entitled thereto.
- To bear loss to the property- The buyer is bound to bear any loss arising from the destruction, injury or decrease in value of the property not caused by the seller where the ownership of the property has passed to the buyer.
- To pay public charges and rents- Where the ownership of the property has passed to the buyer, as between himself and the seller, the buyer is bound to pay all public charges and rent which may become payable in respect of the property, the principal moneys due on any encumbrances subject to which the property is sold, and the interest thereon afterwards accruing due.
Mortgages:
A mortgage is a conveyance or assignment of land with a promise for re-conveyance or re-assignment. Therefore under a mortgage, the lender’ becomes the owner of the land and the borrower retains possession. Section 58(a)[1] of the Transfer of Property Act 1882 defines a mortgage as:”The transfer of an interest in specific immovable property for the purpose of securing the repayment of money advanced or to be advanced by way of loan on existing or future debt or the performance of an engagement which may give rise to a pecuniary liability”.
Creation of mortgages and charges:
The following classes of mortgages may be created under section 58 of the Transfer of Property Act 1882.
1). Simple mortgage: – In simple mortgage a borrower binds himself to repay the loan with a proviso that the lender can cause the security to be sold on default.
2). Mortgages by conditional sale: – This is an arrangement where the borrower ostensibly sells the property to the lender subject to the following conditions that:
a. On default of payment, the sale shall become absolute or;
b. On payment of the mortgage debt, the sale becomes void or;
c. On payment of the debt, the property will be transferred to the borrower.
3). Usufructuary mortgage: – This involves the delivery of possession and the application of rents and profits to interest and /or the principal amount borrowed. This is equivalent to self –redeeming pledge. The mortgagee has no power to sell or foreclose.
4). English mortgage: – Here the borrower binds himself to repay the mortgage money on a certain date and transfers the mortgaged property absolutely to the lender. But this is subject to the provision that the lender will transfer it to him upon repayment of the mortgaged money.
5). Equitable mortgage: – This does not entitle the mortgagee to sell the property. Such mortgage arises by simple deposit of title deeds without delivery or possession to the lender.
Leasehold Estates:
A lease is an interest which confers a right to exclusive possession of land for a definite period of time[2]. It is clear from the definition that the essentials of a lease are: –
1. The conferment of a right of exclusive possession.
2. The lease must relate to a defined piece of land and;
3. The lease must be for a period that is certain or capable of being ascertained.
The person who acquires a right to the land is called the lessee whereas the person from whom the lease acquires his interest in the land is known as the lesser.
Types of leases
There are four types of leases, namely: – fixed term lease, periodic tenancy, tenancy at will and, tenancy at sufferance.
1. Fixed term lease: – This is a lease for a fixed period e.g. 30 years. It arises where the parties actually stipulate in the agreement the particular period in which the lease will be in existence.
The main features of fixed term lease are:
a. It is created by express agreement and;
b. The term of the lease must be certain or ascertainable.
2. Periodic tenancies: – It continues from one period to another until it is brought to an end by proper notice. The term of the lease is renewed automatically on expiry date unless one of the parties gives notice of termination to the other party. This is a tenancy from year to year, half year to half year, month-to-month e.t.c.
3. Tenancy at will: – This is created where the tenant occupies the land with the permission of the landlord on terms that the relationship may be terminated by either party at any time i.e. at will.
4. Tenancy at sufferance: – This arises where after expiry of a fixed period lease, the tenant continues to occupy the land without the landlord’s permission. In such situations the tenant continues to pay rent and the landlord accepts it.
Rights and obligation of lessor and lessee:
The rights and obligations of the parties are governed by their agreement and the court can’t interpret them otherwise. One party’s right is another’s duties or obligations. In the absence of an express agreement by the parties, the following implied statutory obligations are applicable.
Obligations of lessor (landlord):
1).Quite enjoyment: – The landlord covenants that the tenant shall have peaceful enjoyment of the land as long as the tenant pays rent and perform his other obligations. Quite does not only mean noise free but also mean interfering with the enjoyment of the tenant’s rights.
2). Fitness for habitation: – For properties governed by the Registered Land Act, there is a provision that, where a dwelling house, flat or room is let furnished, there shall be an implied undertaking by the landlord that the same is fit for habitation on the commencement of the lease[3].
3). Duty to repair: – The landlord shall undertake all the external repairs of the premises i.e. staircases, corridors, paths and gardens if any. Under the Registered Land Act, the landlord is required to keep the roof, main walls, main drains, common passages and common installations in repair.
4). Derogation from grant: – The landlord is not allowed to use or to permit to be used any adjoining or neighboring land of which he is the proprietor in any way which could render the leased premises unfit or materially less fit for the purpose for which they are leased.
Other obligations include:
5. He must have capacity to grant lease i.e. He must not be a minor, lunatic etc.
6. He must disclose any material defects to the tenant/ lessee.
7. Not to increase the rent as he likes.
8. To put the tenant in possession and continuously.
Obligations of Lessee (tenant).
1). Obligation to pay rent or rates: – The tenant is under implied obligation to pay rent reserved or agreed. This duty continues as long as the tenant continues to occupy the property despite the occurrence of a catastrophe or calamity which renders the property unfit the use for which it is let. Rent may be paid in arrears or in advance. It is implied that the tenant will pay rates and taxes for which the landlord is not directly liable.
2). Duty to allow landlord on premise: – The tenant is under an implied obligation to permit the landlord or his agent, at all reasonable times and after notice, to enter the premises and examine its condition(Section 108 of ITPA and section 54 of RLA).
3). Obligation to repair leased premises and furniture: – The tenant is obliged to keep leased premises in good condition. His responsibility is to undertake internal repairs and return the premise in the condition he found it, subject only to reasonable wear and tear or irresistible force.
The tenant is not responsible for damages due to ordinary operation of natural causes and where the premises are rented when furnished, the tenant is required to keep the furniture in good condition. Where the whole building is let unfurnished, the tenant should keep the whole premises in repair.(The RLA, Cap 300)
4). Not to commit wastes and use premises in proper manner keeping the interior in repair and clean.
5). Not to erect permanent structures on the leased premises and if he does so, he should remove them at the expiry of the tenancy.
6). Not to sublet or transfer the premises unless agreed by both lesser and lessee. The landlord should not however unreasonably withdraw his consent.
Conclusion:
The Civil Procedure Code and Transfer of Property Act embody what is referred to as the backbone of civil law in Bangladesh, and the notions in question, those of Transferable Property and Attachment are key concepts with regards to the functioning of the civil litigations in the country.
It is thus of crucial importance that these concepts are well understood by both lawyers and the parties concerned. This paper is attempted to bring out such distinctions as were found relevant for the present discussion, and the more important portions of such legislations have been incorporated for the purpose of a meaningful analysis of the issues at hand.
Bibliography:
- http://bdlaws.minlaw.gov.bd/pdf_part.php?id=48
- http://forum.daffodilvarsity.edu.bd/index.php?topic=10187.0
- http://www.helplinelaw.com/docs/THE%20TRANSFER%20OF%20PROPERTY%20ACT,%201882/CHAPTER%20V%20OF%20LEASES%20OF%20IMMOVEABLE%20PROPERTY
- http://www.lawyersnjurists.com/resource/legal-documentations-litigations/legal-opinion/legal-opinion-regarding-mortgage-and-documentation-status-3/
- http://www.pmo.gov.bd/pmolib/constitution/part11.html
- http://www.bartleby.com/cgi-bin/texis/webinator/sitesearch?FILTER=col61&query=property&x=0&y=0
- http://legal-dictionary.thefreedictionary.com/Property
- The transfer of property act 1882 (Act no 4 of 1882).
· Section 55-Contract for sale
· http://www.helplinelaw.com/docs/THE%20TRANSFER%20OF%20PROPERTY%20ACT,%201882/CHAPTER%20V%20OF%20LEASES%20OF%20IMMOVEABLE%20PROPERTY
- http://legal-dictionary.thefreedictionary.com/Rights+and+Liabilities+of+Buyer+and+Seller
- http://www.helplinelaw.com/docs/main.php3?id=SLPY4
- Chapter58(a) Marshalling by subsequent purchaser
· http://www.law.cornell.edu/wex/mortgage
· http://legal-dictionary.thefreedictionary.com/mortgage
· http://forum.daffodilvarsity.edu.bd/index.php?topic=10187.0
· http://legal-dictionary.thefreedictionary.com/lease
· http://realestateattorneyla.com/2008/01/21/4-common-types-of-commercial-real-estate-leases-office-leases/
- www. Austlii.edu.au/au/legis/s117.html
- www. Deakin.edu.au/vol9-2-13.pdf
[1] Chapter58(a) Marshalling by subsequent purchaser
[2] http://legal-dictionary.thefreedictionary.com/lease
[3] www. Austlii.edu.au/au/legis/s117.html