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Property Title Verification In India – The Process, Methods & Other Aspects
Property

Property Title Verification In India – The Process, Methods & Other Aspects

Title is a legal term; It means right of ownership of property. The title of the property is the prime concern of everyone at the time of property purchase. Every property has a title. Title is the proof of the right of ownership or the basis of the right of ownership. Title can be created by act of parties or by operation of law.

The title to the immovable property is ascertained by reading the relevant "documents" and "deeds" relating to such property. The word "document" has a very broad import. Under common law 'document' means any substance expressed or described by means of letters, figures or marks for the purpose of recording that matter. Documents relating to property or commercial transactions are generally called instruments or deeds.

Land is a subject under the powers of the state governments under the Constitution of India and hence, property laws in India may differ from state to state. Apart from local laws, several laws framed by the central government also govern the acquisition and ownership of property (including interest in property) by way of purchase/sale, transfer, mortgage, inheritance or gift.

Transfer of property other than agricultural land, registration of deeds and documents come under the Concurrent List. When a person acquires or owns immovable property, the law also entitles him to use, lease, sell, rent or transfer/gift the land. The owner also has the right to mortgage his immovable property as security for the loan.

Here we'll tackle title checks required for a variety of purposes, including sale, lease, sublease and mortgage. For the purpose of brevity, reference to sale shall also include the purposes of lease, sublease, license and mortgage where applicable.

Importance of title verification

1. A title proves ownership. Barring a valid legal dispute, a land title serves as an official record for the ownership of the land. Without the appropriate title, the legal system would not recognize an unfiltered deed or informal contract.

2. All owners can hold their own duplicate title: Each owner of a land title can hold a legally valid copy of the title. The Register of Works will make a note of each owner's copy in the recordkeeping system to confirm the validity of the copy issued by each county. In the case of trust and company-based ownership, an accredited administrator may retain a copy of the title on behalf of the trust or company.

3. Prospective land owners often conduct title searches to uncover potential issues: During a title search, an investigator will look at years of land documents to identify potential issues with land ownership. A title search can prevent new owners from accepting liability for past issues. For example, a property owner cannot sell or transfer ownership rights to a property with unresolved tax issues. An outstanding lien can make any ownership transaction invalid.

Title searches reveal information about property taxes, property deeds contracts, CC&Rs (contracts, terms and restrictions), deed document issues and unresolved ownership claims, and more. If the previous property owner granted the easement or rights to use the property to a company or individual, the search will also reveal these recorded contracts.

While buyers and lenders commonly use title searches during the buy/sell process, many other parties can benefit from a title search. Home builders, businesses and government officials can use title searches for risk management and investment protection purposes.

4. Title Insurance Offsets the Risk Associated with Title Transfer: To mitigate the effects of issues not discovered during the title search, many land buyers invest in title insurance as part of the closing costs of the transaction. Owner's title insurance often provides coverage for damages up to the full value of the title in case an issuer jeopardizes a future claim of ownership. Owner's insurance policies will also cover dispute resolution legal costs, including damages paid to another party to the extent of the policy. Lender's title insurance protects the lender's agreement with the borrower. In the event of a land dispute, the policy will cover the lender's loss and legal expenses.

It is clear that title verification is a necessary activity before buying a property.

Property Title Verification Process & Method

The search for property title or legal description is done by the attorney or a title company in most real estate transactions. The Attorney/Title Company must first look at the past records of the property. A property can have a "Chain of Titles". The attorney has to see whether there is any encumbrance on the property.

Sometimes a legal succession certificate is also required to determine the title of the property if there is more than one person as the owner of the property. It is necessary to define the relationship of owners. But this is generally done when the property owner is a deceased person and that person has more than one legal representative. In such a situation, it is necessary to show the relationship between the deceased and his legal representative. It will also have to be checked that no objection has been raised on the sale of the said property.

Mother Deed is necessary to trace the origin of the property. It is a document that helps in further sale of property, thereby establishing new ownership. In the absence of the original deed, certified copies should be obtained from the registered authorities. Mother Deed covers change in ownership of property, whether through sale, partition, gift or inheritance. It is very important that the mother deed records the references to past ownership in a sequence and must be continuous and unbroken. In case of missing sequence, one should mention the text (Preamble) in records, revenue records or other documents from the registration offices. The sequence must be updated to the current owner.

Property title verification is necessary to prevent legal disputes after the sale of property. This is usually done with the help of the buyer's attorney. The attorney will determine by going through the past records of the property. Hence title verification assumes a major importance in the sale of property.

Partition Of Property Under Hindu Law
Property

Partition Of Property Under Hindu Law

Partition is the process of division of property. The Hindu Succession Act, 1956 ("Act") regulates the partition of property under Hindu Law. 

There are two types of partitions under the Hindu Succession Act. 

  1. Self-Acquired Property 

  2. Ancestral Property 

Property obtained by someone in their lifetime and not inherited from their ancestors is Self-Acquired Property. On the other hand, Ancestral property is property inherited from one's forefathers. Further, Succession itself is of two types: Testamentary Succession and Intestate Succession. 

  1. Types of Succession

As noted, Succession can either be Testamentary or Intestate. Testamentary Succession occurs if there is a will. As long as the will is valid and enforceable, the will has to be executed, and the inheritance provisions do not apply. Part VI of the Indian Succession Act, 1925, further elaborates on provisions related to wills. The will should be clear, reduced to writing, signed by the testator and two independent witnesses. 

By contract, Intestate Succession is primarily covered by the laws of inheritance. For Hindus, these are governed by the Hindu Succession Act, 1956. 

  1. Rules of Succession under Hindu Law

Succession itself depends on whether the property is a self-acquired property or an intestate property.

  1. Succession of Self-Acquired Property

Self-acquired property is also known as coparcenary property. Individuals only have an "interest" in such property, and they receive a share in the property if they have an interest in it. Thus, the "devolution of interest" is an important concept.

People Also Read This: Supreme Court Judgments On Ancestral Property

Section 6 of the Act comprehensively discusses the devolution of interest in cases of the death of a Hindu male. The property will devolve to all coparceners within the dictates of Mitakshara law. However, the Act is progressive and has included women and female heirs within the coparcenary. 

  1. The succession of Ancestral Property

The rules of property division are given under Chapter II of the Hindu Succession Act, 1956.

A Hindu male's basic rules of Succession are codified under Sections 8 and 9 of the Act. Under these provisions, the order of Succession is as follows:

Relatives specified in Class 1 > Relatives specified in Class 2 > Agnates of the deceased > Cognates of the deceased. 

The Succession is exclusive. This means that if there are any Class 1 heirs, they will all receive a share in property and exclude heirs from other categories. If there is no class 1 heir, then all members of Class II will exclusively receive an a of the property, and so on. This is the order of Succession clarified in Section 9 of the Act. 

The list of relatives under Class I & II are mentioned under the Schedule to the Act. Class I heirs primarily include the son, daughter, mother, etc. – Usually, the deceased's closest relatives. Class II heirs are more distant but somewhat related: they include the father, son's daughter's son, son's daughter's daughter, and so on. Sections 10 and 11 state the rules of Succession for Class I and II heirs.

The property of an intestate shall be divided among the heirs in class I of the schedule by the following rules- 

Rule 1: The intestate of window (s) shall take one share each. 

Rule 2: The surviving sons and daughters and the mother shall take one share each

Rule 3: The heir in the branch of each pre-deceased son or daughter shall take one share between them. 

This is also applicable to Class-II heirs.

People Also Read This: How to Inherit Property in India?

Finally, property devolves to cognates and agnates. A cognate is any blood relative from the mother's side, while an agnate is any blood relative from the father's side. While both Class I and II heirs receive equal shares, Section 12 of the Act mentions the hierarchy in Succession among the cognates and agnates. 

For females, similar rules are followed. These can be found under Sections 15 and 16 of the Hindu Succession Act.

How to Check Property Details Online in India?
Property

How to Check Property Details Online in India?

Checking the property details can be a very tedious job. However, you should always ensure that the person from whom you buy or rent property is the rightful owner. Now, one can check property details online as well. Let us see how!

1)  How to check if property is legal or not online?

Every state in India has an Online Registration Information System. It is a government portal where all the information about property is available. One can check the status of the property by going on the official website of the State-specific Online Registration Information System. It is a government portal where all the information about the property is available. For example: Property Details of Maharashtra and Delhi can be found on “IGR Marahstra” (https://igrmaharashtra.gov.in/) and “Delhi Online Registration Information System” (“DORIS”) (https://doris.delhigovt.nic.in/) repectively.

Next step is to go to the E-search option available on the webpage. For example, in DORIS, it is the first option from the left. After clicking on E-Search, a new window will open where one can find different options to search the property's details. One can search and verify the correctness of the property details through “Name or Property Address”. If the owner and property details are genuine, one can say that it is a legal property. One will also have to verify various property documents to ensure the property complies with the laws of state/centre.

2)  How to check property ownership online in india?

Every state has a separate website for property detail. To check for the land ownership, one needs to visit the official website of the same. Land records of the concerned states will be available on their respective official website. For example, In order to check the land records of Maharashtra, one will have to visit https://bhulekh.mahabhumi.gov.in/. Though the contents are in Marathi, you will get an option to translate the web page to english on the upper right hand corner. For Delhi the official website is https://dlrc.delhigovt.nic.in/Index.aspx. Most important thing to note here is, the interface for every website will be different. For example: After going on the official website of Maharashtra one will see a Map. One can either put the details manually to search or click their respective district on the map which will then direct the user to the records of the particular district.

People Also Read This: Land & Property Registration: All You Need To Know

3)  How to verify property documents?

Property Verification is perhaps the most important part while purchasing a property. Due Dilligence of documents is of utmost importance as it gives a clear idea about whether the property is legal or not. Whether the property title is clear helps us check whether the property has some loan which is due, etc.

Nowadays, various legal service providers can verify documents online. One can also visit property lawyers in the district court who can verify the documents for the clients.

Below-mentioned documents are required for verification

  1. Sale Deed

  2. Power of Attorney

  3. Property Title

  4. Agreement to sale

  5. Encumbrance Certificate, to ensure there is no mortgage or lien on the property.

  6. Any other document like Partition deed or Will depending upon the context.

4)  Legal and Technical Verification of Property: 

Legal and Technical Verification are a rather safer way to verify a property. Whenever a lender goes to the bank to take Property Loan. Banks (Housing Finance Bank or Non-Banking Financial Companies) will scrutinise the documents for the lender before approving a loan. The Legal Team of the Bank does the documentation in-house. This ensures that lenders are not getting involved in a dubious and fraud transaction and it also helps banks while giving out loans based on the genuineness of the documents.

People Also Read This: Buying a House? Have You done your Legal Checks?

Technical Valuation team carries out Technical Verification of Property. Prior to granting a loan to a lender, the Valuation team physically examines the commercial capability of the property. They Physically examine the property, the condition of the property, value for which the property could be sold, the market rate and the area where the property is situated. This is done to ensure that the bank is able to recover the loan, by selling off the property in an open market, in case there is a default by the lender. For example: If the property is worth Rs. 50 Lakh in the open market, the Bank will be willing to give a loan to the lender for around Rs. 50 Lakhs only. Thus even though the lender fails to repay the loan, the Bank can sell off the property to recover the money. In such a case the Bank won’t fund 70-80 Lakhs for the same piece as it will be next to impossible for them to recover that money.

You should always before buying property check the title and other information regarding the property. With all states now having their own websites and facilities to check property details online, it is easier to assess the ownership of the property.

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