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| Relevance of investigation of title |
| Ashoo Gupta / Mumbai Mar 01, 2010, 17:12 IST |
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 Rapid industrial development and unbridled urbanisation have seen the demand for land for development of residential, commercial and industrial complexes, and even for farmhouses rise tremendously, resulting in sky-high prices. Alienation of real estate is specially taking place in villages situated within a radius of 1-20 km of urban industrial and commercial centres. Land parcels are generally purchased through socially advanced, often unscrupulous persons, or rich agriculturists possessing sufficient muscle power and skills to persuade, deceive and exploit the poor farmer. As a result, widespread deceit and exploitation is seen in almost all land alienations. It is, therefore, essential to have a fair idea of the guidelines of investigation of title.
Title refers to the right of ownership in a property. A search into the ownership of the property is called investigation of title. The investigation is conducted by an advocate with the objective of ensuring that the ownership is complete in all respects, there are no risks and the property is free from all conflicting interests.
Investigation of title commences with the advocate commissioning searches in the offices of the concerned sub-registrar, to find out all documents that are registered relating to the property for the last 30 years. If the relevant documents are not available from the above office, the owner’s advocate is asked to provide copies of the same. Enquiries should also be made from the Municipal Corporation to ascertain whether there are any arrears of property taxes or water charges in respect of property.
In addition, the advocate issues a notice in local newspapers inviting claims in the nature of mortgage, charge, easement, etc., against the property to be submitted within a specific time with supporting documents. The notice states that if no claim is received, it would be deemed that no such claim exists or it shall be deemed to have been waived. Such a clause is not binding on the real claimants because the notice may not come to the attention of such person, however in case of dispute such notice will support buyer’s contention that he is a bona fide purchaser for value without notice of claim. Site inspection through a surveyor for ascertaining the possession and boundaries of the land should be conducted.
While buying flats in co-operative societies, certain precautions should be taken such as:
- Verifying the name of the member on the share certificate, electricity, telephone and maintenance bills and receipts;
- Inspection of the records of the society for ascertaining whether:
- The building has an occupation certificate;
- Any lien/charge/claim has been registered with the society;
- All dues in respect of the flat have been paid to the society;
- The land has been conveyed to the society;
- There are any disputes/litigation in relation to the flat;
- The society has no objection in transferring the flat. (Although the new co-operative society bye-laws do not require obtaining a no-objection certificate, societies have not adopted the same, hence the requirement of obtaining the no objection continues to exist).
- Ensure that the transferor is in possession of the flat and has the original agreement/s for sale and share certificate;
- Verify that proper stamp duty is paid on the original agreement/s for sale and the agreements are registered; The following should also be considered:
- Whether the shares are transferor’s self acquired property or acquired/held by the transferor in as a Karta of a Hindu Undivided Family;
- If the transferor is a nominee of the deceased, whether consent of all the legal heirs of the deceased has been obtained;
- If the transferor is a partnership firm, verify the partnership deed to ascertain if the partner/s disposing off the shares are authorized;
- If the transferor is a limited company, verify that proper resolutions are passed approving and authorizing execution of the transaction and whether any winding up petitions are pending against the Company.
The process of investigation of title is laborious and filled with setbacks. The searches at the Sub-Registrar’s offices are in a dismal condition and the records are not maintained properly. Replies from the Municipal Corporation, are also not easily provided. Therefore to find out the correct position of the property is challenging.
The advocates have to patiently investigate the title even though there are several hurdles such as inaccuracy of records. No lapse on part of the advocates is feasible and the seller will not be liable in case of any default or shortcoming with respect to the documents.
The author is a Partner at J Sagar Associates. Views expressed are personal.
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