What is transfer deed and scenario to use transfer deed
A transfer deed is a legal document that indicates the transfer of a property from one person to another. It also indicates the chain of owners. It serves as proof of ownership of the property. The document may also include the following: deed of sale, wills, bonds etc.
The deed of transfer firstly stipulates the name of the conveyance and the person for whom he/she is acting, as well as the power of attorney of the conveyance granting him/her the authority to act. The name of the person to whom the transfer will take place (the transferee) is then stated, followed by an accurate description of the property to be transferred. The transfer does not necessarily have to include a diagram of the property, but will include a reference to the original deed of transfer, to which such diagram is attached, or will refer to a general plan of the residential area or urban area where the property is situated.
The deed of transfer will then set out the various conditions of title that regulate the use of the property. These conditions usually place restrictions on how the land may be utilised. Usually there are other conditions of title that may differ from property to property. For example, a servitude may be in existence which grants the municipality the right to install a drainage system across the property. The terms Transfer deed and sale deed are often used interchangeably and while they refer to the same contract, there is a subtle difference between the two. All sales deeds are Transfer deeds but Transfer deeds can also include gift, exchange, mortgage and lease deeds.
It is important to note the difference between an agreement for sale and a sale/Transfer deed. An agreement for sale contains a promise to transfer a property in question in future, on satisfaction of certain terms and conditions. An agreement for sale does not, in itself, create any interest in or charge on a property. Therefore, the sale of a property is not complete without a Transfer deed.
Contents of Transfer Deed
- The actual demarcation of the property.
- Other rights annexed to the property and its use.
- The full chain of titles, that is, all legal rights up until the present seller.
- The method of delivery of the property to the buyer.
- A memo of the consideration, stating how it has been received.
- Any further applicable terms and conditions for the full transfer of ownership rights.
Important things about Transfer Deed:
- The seller is required to certify that the property is free of any legal encumbrance.
- If a loan was taken against the property in question, then, the mortgage must be cleared before the deed is signed. Buyers have the option of having this checked at the local sub-registrar’s office.
- The Transfer deed should state the exact date on which the property will be handed over to the buyer.
- Within four months of the execution of the deed, all the original documents related to the sale of the property, need to be produced for registration before the local registrar.
- The deed is required to be signed by at least two witnesses.
Types of Transfer deeds
There are three types of Transfer deeds:
1.Deed of Transfer of freehold property: A property can be converted into freehold status by the concerned authority, such as the Delhi Development Authority (DDA) or any state authority. The Transfer deed is given to the owner as a final document.
2.Deed of Transfer of leasehold property: The leasehold ownership of a property means the owner has the right to everything within the four walls of the property but it does not include the external or structural walls. The landlord is the owner of the structure, the common areas of the building and the land it is built upon.
3.Deed of Transfer subject to mortgage:In this case, subject to the said mortgage the purchaser can, from time to time, enter into and possess or enjoy the land in question and its premises.
Procedure for obtaining Transfer Deed
The Transfer Deed is executed on non-judicial stamp paper and registered by presenting it at the nearest Registrar’s office. Once the registration is done, the Stamp Duty and Registration Fee have to be paid. The Stamp Duty and registry charges are different state-wise.
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