DEED OF COVENANT FOR PRODUCTION OF DEEDS

DEED OF COVENANT FOR PRODUCTION OF DEEDS

The transfer of immovable property by way of sales, gift, will, releases etc., presupposes that documents to the title of transferred immovable property are delivered to the transferee on completion of process. This is statutory obligation. Section No. 55(3) of Transfer of Property Act, puts this responsibility on the seller. But the section has a provision, that in case where only a part of the property is sold and the seller retains a part of the property the seller is entitled to retain the original documents, and copies of such documents are delivered to the purchaser.

In case, where the property is transferred to different persons, in different lots, the transferee of greatest portion is entitled to hold the original documents of title and others are provided with copies of such documents.

In the circumstances dealt above, the persons holding the documents, either the seller or one who holds the greatest portion has some responsibilities. He has to keep the documents in safe custody and in good condition. He has to make available the documents for inspection to other buyers and also furnish the true copies of such documents; extract from such documents, whenever required.

But the cost has to be met by the buyer who needs such inspection or copies, extracts. These responsibilities of person who holds the original property are required to be recorded properly.

The document, which records such obligations of safe keeping the documents; producing them for inspection, providing copies, extracts is called “Deed of Covenant for Production of Documents”.

The deed of transfers like sale, gift, will and release may contain such a covenant by the vendor in favour of purchaser or a separate deed may also be executed by the vendor in favour of purchaser (or) after making the same covenants can be incorporated in the sale deed.

In case of the person holding greatest portion, a separate covenant deed about his obligations becomes necessary. A separate deed in favour of each transferee of other portions or a common deed in favour of all other transferees jointly may be executed.

In the deed of transfer of the greatest portion or of higher value an explicit covenant, that, the transferee shall safe keep the documents in good condition, produce for inspection of other transferee and furnish true copies or extract should be included. Similar relevant covenant should also be incorporated in deed of transfer of other transferees.

Generally all the portions of the property are not transferred at the same time, and the above suggested procedure may not be possible. In such cases, the transferor should give a covenant of production of documents in each of the deeds of transfer and it should further provide that if and when the transferor hands over the documents to any other transferee at a later date he would procure a similar condition from the such transferee. Under a covenant of production of document, the original owner liable indefinitely unless a condition provides that he is no more responsible after he parts with the remaining portion of the property.

Flats are constructed on land and are sold to different purchasers. But the original title deeds for the entire land will be only one and cannot be given to each and every purchaser. Each purchaser will get original sale deed, which is executed in his name and registered. He will get copies of other original documents and not originals. The original title deeds of the land will be in the custody of the

Flat Owners Association. The association has the responsibility of maintaining them safely and make available the documents for inspection by the owners and to provide copies, extracts the promoters or builder shall incorporate such clause in individual sale deeds. The articles of the flat owners association shall contain the clauses relating to safe custody, inspection and making available the copies or extracts of the original documents.

Stamp Duty: In case the conditions is including in the transfer deeds itself, no separate stamp duty is payable. If a separate deed is executed, it attracts the stamp duty as that of an agreement depending upon the stamp duty prescribed by the state.

Registration: this deed of covenant does not require the registration, but it is advisable to get it registered.

DEED OF CONFIRMATION & CANCELLATION

DEED OF CONFIRMATION

It is very common that many a times the main documents of sale, mortgage, lease are drafted by inexperienced and unqualified people, as a result of which defects creep into the documents. This necessitates the requirements of supplementary documents to remedy the mistakes. Deeds of confirmation, rectification and cancellation are some of the important supplemental deeds. We have already dealt with rectification deed. This write up deals with confirmation deed.

There are two types of confirmation deeds, one of the types is, where a person confirms and assents to the documents of conveyance executed by another person. This becomes necessary, when a person is not made a party to the main document of conveyance either by oversight or by ignorance or by some other reasons.

Another type is very important. Here the party to a document has made some mistake in signing the main document or has failed to admit the execution before the sub-registrar within the prescribed time, and consequently the sub-registrar has refused to register the document as far as the said party is concerned or in some other respect. It is very common though the parties execute the documents, but fails to turn up at sub-registrars office to admit execution, and the registering authority, refuses to register the document. In order to remedy this defect, a deed of confirmation has to be executed from the concerned party, wherein the confirms the execution of principal deed and further adds that the principal deed is valid and binding on him. He also confirms that he has no right, interest, title to the property transferred which belongs to the purchaser/transferee.

As a precautionary measure a copy of principal deed should be annexed to the deed of confirmation and such copy should also be signed by the party executing the confirmation deed. However, whether such a document cures the defects of the main documents is debatable, but such documents would act as promissory estoppel against the party. This would avoid execution of fresh documents, payment of stamp duty and registration charges.

The word confirmation in strict parlance means approbation or assent to the estate already created, by which confirmation party further strengthens and gives legal validity to such estate so far at it is his powers.

The confirmation may be given in variety of ways (1) by acquiescence (2) by limitation (3) by deeds. Confirmations of acquiescence and by limitations are the outcome of operation of law.

The Indian registration recognizes confirmation deeds. Sec. 17(1) provides any deed confirming any interest in immovable property needs to be registered.

The confirmation deed attracts stamp duty. If the main documents is registered or to be registered the corresponding confirmation deed also requires registration.

DEED OF CANCELLATION

Section 13 of Specific Relief Act 1963, deals with the cancellation deeds. There may be certain written documents, which by their nature or by operation of law or by some other reasons are void, violable. Such documents if left as they are and outstanding may harm the interest, right, titles privileges of some party. Such person may institute a suit, praying for cancellation of such written documents, and the court in its discretion if thinks it proper may order for Cancellation of such written document.

There may be documents of contract, which are void as they are against Law Public Policy or violable if they are vitiated by fraud coercion or other similar grounds. The parties to the document may also cancel such documents by mutual consent without referring to the court. An agreement for sale, lease, mortgage, license, partition, may be cancelled by the parties with consent of all parties.

But at times, the matter of cancellation of document may not be so simple as some parties may want to take undue advantage, or very mature of document may not make it simple task.

A deed of conveyance, which is duly executed and registered, cannot be cancelled by mere deed of cancellation. The proper course would be to execute a reconveyance deed and get it duly registered. But if of fraud, coercions or incase of any disagreement among the parties, the chances of mutual consent to cancel the agreement are very remote. In such cases, the affected party has to seek the intervention of the court by filing suit as per the provisions of section 13 of Specific Relief Act.

If any of the documents are unregistered, it may be cancelled by consent of all the parties by scoring off or by endorsing it about cancellation. But in both cases, all the parties should sign the document for having cancelled.

Cancellation deed attracts the stamp duty as per section 17 of Indian Stamp Act, that is stamp duty is payable only if it is attested by witness. A cancellation deed, which is not attested, attracts stamp duty as per agreement. If the main deed needs to be registered. Cancellation deed also needs to be registered.

RECTIFICATION OF PROPERTY DOCUMENT

RECTIFICATION OF PROPERTY DOCUMENT

Documents of immovable property should depict the correct title of the present owner and should be free from mistakes if the owner of the property is to have peaceful possession and enjoyment of such property. However, in spite of great precaution, many of the documents do contain mistakes. Mistakes noticed in a document after registration can be corrected only by execution of a rectification deed and not by tampering with the original documents. However, the mistakes noticed in a documents before registration can be corrected under the signature of the concerned person.

Types of mistakes

It is difficult to specify the exact type of mistakes which a document may contain. There is no uniformity in the types of mistakes in a property document. Some documents may contain mistakes relating to boundaries of the property, measurement of the plot while some other documents may contain mistakes relating to the location, survey numbers, municipal numbers, description and number of floors, names of parties, consideration amount, absence of easementary rights clause etc. In one of the cases, it is noticed after the purchase of the property that the measurement of the site has been wrongly spelt in the sale deed showing East to West 40’ and North to South as 30’ instead of East to West 30’ and North to South 40’ and thereby the sale deed became defective and the purchaser was handicapped to deal with the property as he liked without a rectification deed rectifying the mistake in the measurement. This type of mistakes could be termed as mistakes due to negligence. Before registration, if the parties had compared the measurement and the boundaries of the property the need for execution of rectification deed would not have arisen. This type of mistakes are very common and do occur due to non-verification and comparison of the sale deeds with the records of the revenue authorities or due to ignorance or laxity on the part of the parties to the transaction or the middlemen involved therein. But, whatever be the reason, the mistakes in the sale deeds do require rectification if the purchaser has to enjoy his property without litigation or disturbance and to have a clear marketable title.

Rectification deed

Such mistakes, errors in the deeds require to be corrected by execution of a supplementary document called “rectification deed”. Rectification deed is a document executed between parties for effecting corrections of the mistakes of facts / typographical errors which are committed in the original/principal deed. Rectification of deeds is supported by the various canons of law and is an equitable relief usually granted by Courts of Equity and is based on doctrine of mistake of fact. Once a rectification deed is executed, it shall have to be read as part of the original sale deed and copies of the extracts of the revenue records indicating the fact of execution of rectification deed are to be obtained and preserved along with the sale deed and the rectification deed.

Pre-requisites

In order to execute a deed of rectification, there must be bona fide mistake whereby the original deed does not reflect the true intention of parties to the said deed. More importantly the mistake should pertain to the facts and not for application or interpretation of law. However, there is an exception to this rule. The mistake of foreign law is considered as mistake of fact. Section 21 of Indian Contract Act is relevant in regard to this.

When the parties to deed agree to modify, add or delete any terms referred to in any original deed executed by them on a prior date, to bring out their true intentions, it is necessary to reduce such correction into a duly executed document and to pay the requisite stamp duty in order to get the same registered with the concerned authority.

Section 26 of the Specific Relief Act reads as under:

26. When instrument may be rectified – (1) When, through fraud or a mutual mistake of the parties, a contract or other instrument in writing does not express their real intentions, then –

(a) either party or his representative-in-interest may institute a suit to have the instrument rectified; or

(b) the plaintiff may, in any suit in which any right arising under the instrument is in issue, claim in his pleading that the instrument be rectified; or

(c) a defendant in any such suit as is referred to in clause (b), may, in addition to any other defence open to him, ask for rectification of the instrument.

(2) If, in any suit in which a contract or other instrument is sought to be rectified under sub-section (1), the court finds that the instrument, through fraud or mistake, does not express the real intention of the parties, the court may, in its discretion, direct rectification of the instrument, so as to express that intention, so far as this can be done without prejudice to rights acquired by third persons in good faith and for value.

(3) A contract in writing may first be rectified and then if the party claiming rectification has so prayed in his pleading and the court thinks fit, may be specifically enforced.

(4) No relief for the rectification of an instrument shall be granted to any party under this section unless it has been specifically claimed:

Provided that where a party has not claimed any such relief in his pleading, the court shall, at any stage of the proceeding, allow him to amend the pleading on such terms as may be just for including such claim.

Stamp duty and Registration

If the original deed is a registered document, the corresponding rectification deed also requires to be registered. Stamp duty and registration charges payable for registration of rectification deeds are at the rates as are prescribed by different States.

If rectification deed is executed to rectify mistakes of a general nature, boundaries, spellings, etc, in Karnataka, the stamp duty and registration charges are Rupees One Hundred each and if the rectification deed is executed for rectification of mistake concerning the area or the extent of the property, or change in the names of the purchaser, the stamp duty and registration charges payable would be at the rate prescribed for conveyance deed.

IMPORTANCE OF SIGNATURE IN THE SALE DEED

IMPORTANCE OF SIGNATURE IN THE SALE DEED

Testimonium is the concluding part of the Deed. This clause is incorporated in order to authenticate the execution of the instrument. It is in this part of the instrument, the parties having interest over the schedule property sign the deed, confirming their consent for the conveyance of the same apart from the parties to the deed.

In case of Companies registered under the Companies Act, 1956, the following clause is incorporated:

”In Witness Whereof, the Parties have hereto set their hands and seal the day and year first above written".

The word "Seal" is incorporated only if the parties to the deed are a Company.

In case where the parties are individuals, it is written in the following manner:

"In Witness whereof the Parties hereunto have set their hands/signatures on this Deed on the day and year first mentioned above".

While drafting an instrument, it is the usual practice that the date is mentioned in the beginning of the Deed. However, the same can be incorporated in the Testimonium clause, if it is not incorporated earlier. Where the document is written in the first person like Power of Attorney or Will, the date is mentioned in the Testimonium clause.

Execution of Signatures

After the Testimonium clause, the parties to the deed should affix their signatures. Number of signatures varies from one document to the other. In case of an agreement, it is necessary that both the parties to the deed should sign, while in case of sale deed, it is sufficient if Vendor/seller alone signs. Any person having certain right or interest on the property has to sign as Consenting Witness or Confirming Witness. Again, if either of the parties executing the deed has been represented by GPA Holder, then it is very important that the GPA Holder should sign the instrument representing the principal and not in his individual capacity. On the other hand, if it is a guardian on behalf of the minor, then that fact has to be mentioned below signature. Executant shall affix his signature at the end of every page of the instrument.

Illiterate person:

It is a well established convention that if the Executant is an illiterate, thumb impression in ink is accepted at the time of execution of the instrument. Thus, in case of illiterate males, left hand thumb impression in ink is affixed in place of his name and in case of illiterate female, right hand thumb impression in ink is affixed in place of her name. However, name of the executant has to be written either next or below the Left Thumb impression or Right Thumb impression.

In case of deed executed by an illiterate person, abundant caution has to be taken before execution of the same. It is very important that the contents and covenants incorporated in the deed has to be read out and interpreted and explained clearly in the local language well known to the Executant and incorporate the same at the end of the deed. This practice is also followed if the Executant is blind or even a Pardhanashin lady.

Thumb impression by educated person:

There are instances where the Executant who is educated and knows how to sign, uses thumb impression or mark instead of affixing the signature. In such case, the Registering Officer should object for the same and insist the Executant to sign since thumb impression is permitted only in case of illiterate person or those who do not know how to sign or not possible to sign.

Corporate Body:

If the Executant is a corporate body, the document can be signed by an Authorized Company Director or Authorized Company Secretary. However, it is mandatory that the person executing the document on behalf of the company has to be duly authorized by the Board of Directors by passing necessary resolutions. If there is no such resolution passed by the Board of Directors, the person executing the instrument on behalf of the company will not derive any legal authority to execute the same. The execution of such documents shall be governed by the rules and regulations envisaged under the Indian Companies Act 1956.

Un-incorporate Bodies:

In case of Societies registered under the Societies Registration Act, 1860, Clubs and Associations, documents can be executed by a person or persons of the society, duly authorized by the management only after passing a suitable resolution. However, the procedure involved for execution of the documents is governed by the rules, regulations and Bye-laws of the Society.

Partnership firm:

In case of partnership firm, registered under the Indian Partnership Act, one partner alone shall not be allowed to sign on behalf of all the remaining partners. In such case, it is necessary that the remaining partners authorize any one partner to sign on behalf of the partnership firm and also remaining partners. The reason being that, unlike a Company, partnership firm does not have a separate legal entity and hence a partner can neither sell nor mortgage any immovable property standing in the name of the Partnership firm without the written consent of the remaining partners. A partner can be authorized to sign on behalf of the partnership firm and also the remaining partners either incorporating the name of the person authorized to sign on their behalf in the Partnership deed itself or executed a Registered Special Power of Attorney to that effect. In either way, a partner duly authorized can execute the document representing the partnership firm.

Attestation:

Attestation means signature of two or more witnesses, each of whom has seen the executant affixing his signature or marking on the instrument or some other person signing the instrument under the instructions and direction of the Executant. However, it is not necessary that more than one of such witness shall be present at the same time. There is no particular format adopted for attestation. It is generally at the left hand side of the Deed, a heading "Witnesses" is mentioned and two witnesses should sign below the caption.

Valid Attestation:

There are three pre-requisites for valid attestation, as mentioned below:

1. There must be two or more attesting witnesses.
2. Each of them must have seen the Executant signing or affixing the mark on the document.
3. Each of the two attesting witnesses must have signed the document in the present of the Executant.

Necessity of Attestation:

Except few of the documents such as Mortgage and Will, remaining documents does not require compulsory attestation. However, it is advisable to incorporate Testimonium clause, requiring the signature of witnesses to the document in order to testify the execution of the documents if the same is denied by the Executant.

Hence, before executing a deed, it is very important to scrutinize the capacity of the Executant, as to whether the Executant is signing the deed as an individual or if representing partnership firm or a corporate body or any other bodies, necessary authorization has been obtained before signing the document. If there is any ambiguity pertaining to the capacity of the Executant, the execution of the instrument itself will nullify the legal sanctity.

ALL YOU NEED TO KNOW ABOUT A SALE DEED

ALL YOU NEED TO KNOW ABOUT A SALE DEED

Sale Deed is also known as conveyance deed. This is the document by which the seller transfers his right to the purchaser, who, in turn, acquires an absolute ownership of the property. This document is executed subsequent to the execution of the sale agreement and after compliance of various terms and conditions detailed in the sale agreement.

Before execution of the sale deed the title of the seller is to be established beyond doubt. Copies of the documents of title must be scrutinized by an advocate well versed and experienced in property dealings.

If there is any encumbrance on the property, such encumbrance is to be cleared by the seller at his cost.

All statutory payments like property tax, water and power charges and any other payments due on the property should be cleared before execution of the Sale Deed. Any previous charges or mortgage should be cleared before execution of the Sale Deed.

Clearances, and permissions which are required to be obtained by the seller should be obtained prior to execution of the sale deed.

Latest encumbrance certificate of the property, subsequent to the date of the sale agreement up to the proximate date of sale deed should be obtained and such certificate should be of nil encumbrance.

All the persons having interest in the property should be made parties to the deed. Particular attention needs to be paid in case of purchase of properties from a Limited Company, Partnership Firm, Hindu Undivided Family, Trust, Power of Attorney Holder and Minor.

Draft Sale Deed

A draft Sale Deed, containing full details of the parties, advance amount paid, mode of balance amount payable, receipt of the balance amount by the seller, handing over the original documents of the property, handing over the possession of the property, handing over the authorization letter to transfer power and water meters, signing of the application for transfer of Khatha, title of the seller of the property, indemnifying the purchaser in case of defect in the title, easement rights, will be prepared by the purchaser’s advocate. Such draft Sale Deed should be captioned as draft Sale Deed and shall be signed by the purchaser’s advocate.

A copy of the draft Sale Deed will be given to the seller for his approval. The seller and his advocate will verify the draft sale deed and approve it or may suggest suitable deletions, additions or amendments. The purpose is to bring forth the correct intention of the parties to the Sale Deed.

On approval of the draft Sale Deed, the same has to be prepared on a quality or a document paper. In Karnataka it may be prepared on good quality paper like bond paper or green paper and the stamp duty may be paid by way of demand draft or pay order or cash. The exact amount of stamp duty should be ascertained from the Sub Registrar office. Purchaser is liable to pay the Stamp duty as per value stated in the documents or as per the Sub- Registrar office value whichever is higher.

Execution

After the Sale Deed is prepared all the parties to the deed shall execute it by affixing full signature. Each page should be signed by all the sellers. Any overwriting, cancellations, erasures and additions have to be authenticated by full signature of the parties.

Execution of the Sale Deed requires to be witnessed by two witnesses. The witnesses shall give their full particulars and addresses.

Sale Deed of immovable property of value more than Rupees one hundred needs compulsory registration. The duly executed sale deed should be presented at the jurisdictional sub-registrar office. All the parties, including the confirmation witnesses shall be present at the time of registration and admit the execution. Purchaser also has to be presented for the execution of the documents at the Sub Registrar’s office. In case the purchaser is not in position to be present before Sub Registrar, he can give Power of Attorney to any of his persons to sign and present the documents on his behalf. In case the seller signs the Sale Deed, it is compulsory that only the registered Power of Attorney holder can represent him to present the documents before the Sub-Registrar.

Registration

In Karnataka, the Sub-Registrars office, take the photos of purchaser, vendors, witness and also their thumb impressions and print the same on the Sale Deed.

The vendor has to produce all the original documents pertaining to the property to the purchaser. If the property is divided into one or more portions, the seller has to give certified copy or Xerox copy of the documents to the purchaser and has to give declaration to that effect. Generally, the larger portion holder should get the original documents.

There is a time limit for presenting the documents for registration. The time limit is four months from the date of execution. Thereafter a grace period of another four months is allowed on payment of penalty. The maximum penalty is ten times of registration charges.

At times, the registering authorities may dispute the stamp duty paid. In such cases, the purchaser has an option of paying the additional stamp duty by way of cash or pay order. The purchaser may contest it in which case the Sub Registrar will keep registration pending and send it to the Registrar of Under Valuation to arrive at the proper Stamp Duty.

Parties have to quote their Income Tax Permanent Account Number in case the transactions are done in cash for the property which values more than Rs 5,00,000. Parties, who have not yet been allotted Permanent Account Number, will have to file Form No.60 or Form No. 61 in case of Agriculturists. The purchaser’s advocate has to take all the precautions while preparing the Sale Deed. It is a most important document and decides the fate of the purchaser. The purchaser has to preserve the Sale Deed very safely.

NEED FOR DRAFTING OF PROPERTY DOCUMENTS

NEED FOR DRAFTING OF PROPERTY DOCUMENTS

Identifying a suitable property is the first step taken towards the purchase of a property. After completing the same, documentation is the next and very important aspect.

The agreement to sell is governed by the provisions of the Indian Contract Act 1872 and the Transfer of Property Act 1882.

Mode of stamp duty

Previously, documents were prepared on the stamp paper issued by the Government Department. After the ‘Telgi Scam’, usage of the stamp papers is prohibited in Karnataka. Now, a white paper or Rs 2 document sheet which is issued by the department of Registration is preferred. Regarding stamp duty, it has to be made either by way of Pay order / Demand Draft or Banker’s Cheque in favour of the concerned Sub-Registrar. The Registration charges either by way of DD or cash, is to be submitted to the concerned Sub-Registrar. The details of the stamp duty and registration charges will be entered by the Sub-Registrar on the reverse side of the sale deed.

The beginning

Documents consist of several distinct parts. The name and description of the documents is the first caption shown in the document. This gives a general indication about the nature of a document. However, contents are the most important factor to decide the nature of the document. The date and place of the execution of the document is the beginning of the document. The date of the document may differ from the date of registration. Documents can be presented for registration within four months from the date of execution. However, the date and place of execution is important for purpose of determining the limitation and jurisdiction.

The name of the parties to the contract, their age, father’s name, in case of a married woman her husband’s name, and place of their residence should be mentioned.

All the owners, as one of the parties to the contract, should take abundant care at the time of executing the documents. The party to the contract may act for himself/itself or on behalf of someone else or he may represent in any other capacity. In such a case, the party should clearly mention the capacity in which is he is representing.

All the relevant facts are to be explained in a logical and chronological order should be narrated. The rights and obligations of the parties must be stated. The intention of the party should also be clearly mentioned in the document.

‘Preamble’

Preamble reveals the history of the property, nature of the transaction and the intention of the party. The previous history of the property can be established, by an advocate, from the Preamble.

Operative portion

The operative portion of the document states the nature of the transaction, i.e., whether it is an absolute transfer or an agreement to transfer the right, title and interest, consideration paid, mode of payment of such consideration and balance payable, if any. The duration for completion of the transaction should be mentioned clearly. The covenants of the vendor, pertaining to clear and marketable title, is an important aspect of the transfer.

Default clause

In the case of default in the payment or non-performance of the other party, remedy available to the opposite party has to be clearly mentioned in the document.

In case of delayed payment, what is the percentage of interest payable or damages payable to the other party or the mode to terminate the agreement in case of breach of contract should be stated clearly.

In case of non-performance, specific performance clause should also be included in the document.

The arbitration clause is advisable to be incorporated in the agreement.

Possession

The time of delivery of possession should be clearly and specifically mentioned. It may be noted that the seller need not give the possession of the property to the purchaser on execution of the agreement or on part payment. Possession has to be given on completion of the sale process and receipt of full consideration amount after execution of the conveyance deed. The agreement should also refer to the mode of possession of the property and whether it is vacant or not. When the property is let out, the seller has to arrange for a rental agreement between the existing tenant and the purchaser of the property. Possession is the most important ingredient of the transaction.

Description

Location and description should contain the total measurement, the municipal number, street, road, with complete and proper boundaries and properties surrounding the property agreed to be sold. It should also include the area, floors, type of constructions and materials used among others. The details should be exhaustive so as to identify the property clearly as Section 21 and 22 of the Indian Registration Act makes it mandatory to disclose the details.

Execution

At the end, the document should contain an undertaking that the executants is signing the documents before the witnesses. The witness who sign in the document, may or may not know the contents of the agreement. Whereas, in the case of consenting witnesses, who have a certain interest in the property, they should know the contents of the documents. The non-testamentary document should be drafted by an Advocate or licensed documents writer and they should sign on the same.

Preservation

Preservation of the original document is the most important aspect as it is an evidence of ascertaining the ownership of a particular person and incase of his death, for their legal heirs. If the original document is misplaced or unavailable, it would seriously affect the title of the property. It may be presumed that the property documents are pledged with some financial institutions by way of deposit of title deeds. It is advisable to laminate the documents and preserve them in safe custody.

REQUIREMENTS FOR DRAFTING DEED

REQUIREMENTS FOR DRAFTING DEED

Before drafting any kind of deed of transfer, it is very important to incorporate all the necessary requirements for an effective enforcement of such deeds apart from giving legal sanctity, which requires due diligence and a thorough scrutiny. The following are the essential requirements:

Nature of the Deed

The deed has to specify the description of the deed, such as “This Deed of Sale”, “This Deed of Mortgage”, “This Deed of Agreement to sell”, etc, which may not necessarily be in Bold letters, but is preferable in order to highlight the nature of the deed.

Date of Execution:

It is very important to mention the date of execution of the deed since the same is required for determining the limitation and also for registration of such conveyance in the revenue records by the concerned revenue departments. Further, the date of execution of the document may vary from the date of registration. However, the documents can be presented anytime within four months from the date of execution.

Parties to the Deed:

All the necessary persons having interest in the property intended to be conveyed have to be mandatorily made as parties to the deed in order to avoid any future legal disputes, likely to be raised by the parties having interest over the schedule property. It is also important to properly depict the status of each party to the deed.

Recitals

The deed shall contain the previous history pertaining to the property in a precise way, explaining the nature of the interest and motive behind the execution of such deed, which authenticates the title, which is called Recitals in the legal terminology.

Habendum

This part of deed speaks about the interest in the property that the purchaser is being conveyed such phrases as “To Have and To Hold”. This phrase can be seen in almost all the deeds.

Covenants

A covenant is an agreement wherein either or both the parties to the deed bind themselves to certain terms and conditions, which create an interest over the property, which may be express or implied. In recent times, with the advent of Apartment culture, it is very necessary to incorporate covenants of various types besides those for maintenance of common areas and facilities in the deed.

Testimonium

This is the part of the deed which states that the parties have signed the deed. This is very important in order to prove authentication of the execution of the deed and the involvement of the proper parties having interest in the property in legally conveying the property to the parties of the other part.

Testatum

This is the witnessing clause wherein the witnesses signing the deed are introduced, along with their names, address and signature. This clause is also very important for the reason that the witnesses also play an important role to prove the execution of the document. However, it is advisable that both the witnesses are from purchaser/transferee’s side

Operative Words

This part of the deed depends upon the nature of conveyance. However, operative words clearly depict the intention of the parties conveying the property in favour of the other party/ies, which is necessary for passing of the title.

Parcels

This means description of the property following the operative words. Anything intended to be conveyed/assigned has to be specifically mentioned. Every minute details about the identification of the property has to be clearly incorporated. Any ambiguity about the description of the schedule property may lead to serious problems.

Exceptions and Reservations

Property intended to be transferred must not fall within the ambit of those prohibited under the statute or by orders of the Government. This part of the deed speaks about the conditions restraining the alienation and assurance that such alienation does not involve any restrictions.

Exception refers to some property or definite right which is existing on the date of conveyance and the same would transfer if not expressly excluded.

Reservation refers to the right which is not existing but created at the time of transfer.

Completion of transaction

The deed can be enforceable only if the same is properly stamped under Indian Stamp Act. Apart from this, it is also necessary that the same has to be registered under the Indian Registration Act. Under the said Act, registration of certain documents are made compulsory if such documents fall within either of the category. Only after the registration of such documents, the right, interest and title over the property is validly transferred from the transferor to the transferee. However, registration of the documents depends upon the nature of the transfer.

Execution

Execution of the document will be complete only after the parties put their signature on the deed. Special care should be taken when any of the deed is signed by the party who is an illiterate or blind or Pardanashin lady. In case any document is signed by some person by putting thumb impression, the documents has to be signed by the person who has taken the thumb impression and if any map or plan sketch is annexed to the document, then the same has to be signed by the parties.

Attestation

Attestation, is not a mere formality, but is imperative to prove the proper execution of the document. Though there is no standard form for it, the essential conditions of a valid attestation is that two or more witnesses have seen the executant signing the instrument and that each of them sign in presence of the executant. However, a person who is a party to the deed or a Power of Attorney Holder cannot sign the deed as an attesting witness.

Possession of property

It is very important that the transferor transfers possession of the property in favour of the transferee. It is not necessary that actual possession has to be handed over to the transferee, but even constructive possession will transfer and create a right and interest over the property.

Registration of Deeds

There are certain categories of documents which require compulsory registration. If the document need not be compulsorily registered, then the mere execution of the document incorporating all the necessary causes will complete the act of transfer. On the other hand, the documents requiring compulsory registration is enforceable only after completing the formalities of registration. The main reason for insisting for registration is to protect the intending transferee against fraud and to maintain a public register at the office of the Sub-Registrar.

Thus, the transfer or assignment of right, title and interest over the property, irrespective of the nature of transfer, entirely depends upon the deed of conveyance. Any ambiguity, inadvertent addition or deletion in the deed may give rise to lot of legal problems, thereby obstructing peaceful possession and enjoyment of the property. Thus, the above discussed are the clauses required to be incorporated in all the documents to safeguard the interest of the parties to the deed.