Transfer of Property Act

A Beginner’s Guide to Transfer of Property Act, 1882

Transfer of Property Act, 1882 is an Indian legislation that applies to the transfer of property from one person to another. It specifies the legal requirements for such transfers and provides for both parties’ rights and liabilities. Property transfer can be in the form of a sale, gift, mortgage, exchange, actionable claim, or lease.

The act applies to the transfer of all kinds of immovable properties between individuals as well as companies and organizations.

As per this Act, anyone who is above the age of 18 and mentally sane is eligible to transfer property.

Transfer of Property necessarily requires a written agreement between the parties.

Understanding different types of property ownership in India:

Understanding property titles and ownership in India is vital for both buyers and sellers. It ensures transparency, minimizes legal risks and protects one’s investment.

The following are the types of property ownership:

Individual/sole ownership: This kind of ownership exists when an individual alone has the sole right of being the rightful owner of a property. No other person can claim any rights over this property.

Joint ownership: Such properties that are held jointly by multiple individuals are said to be under joint possession. The people who jointly own a property are known as co-owners or joint owners. Joint ownership can exist in several ways. Here, we mention the types of co-ownership of a property:

Joint Tenancy

Joint tenancy is the case when the property belongs to the co-owners equally. Such owners hold an equal share of the property.

Tenancy in entirety

Such joint-ownerships exist between couples who are married, and each person is officially entitled to the property held in co-ownership.

Tenancy in common

Tenancy in common is the co-ownership of property owners when two people jointly hold ownership of a property but do not hold equal rights over the property.


This kind of joint ownership of a property stands eligible for Hindu undivided families. The Hindu Law lacks provision for collective ownership and therefore, a coparcener form of ownership is eligible in such cases.

Ownership by Nomination: Ownership by way of nomination has become a common practice by the owners of properties as it allows them to pass on their properties to anyone they wish. This ensures that the property does not go unclaimed after the death of the owner.

However, the nominee does not get legal ownership unless he becomes the trustee of the property. The nominee is also required to hand over the property to the legal heir of the owner.

The process of property transfer in India: A step-by-step explanation:

Transferring a property simply means handing over the asset in the present or future to one or more persons. The process should involve a transfer deed to avoid any disputes between the transferor and the transferee.

A property transfer should always be accompanied by a deed. It is a legal document that makes the property transfer lawfully enforceable and provides a clear property title.

Types of property transfer deeds:

Sale deed

Any transfer of property made through sale or purchase must be documented through a sale deed. The deed includes all important details of the buyer and seller, like name and address, details of the property under question, location and address of the property, the total area of the property, etc.

In addition, the sale deed also includes an amount to be paid for the purchase of the property, the advance amount paid, time given for payments, and details of the bank.

Transfer deed

It is used when transferring the existing property title to someone else. Here, the owner transfers not only the property rights to the transferee but also all the benefits arising out of it.

Relinquishment deed

This instrument is used when the owner wants to willfully transfer the property to the co-owner and relinquishes his share in the property. Once signed this deed is irreversible.

Gift deed

This deed is documented when the buyer wants to transfer the property without any exchange of money, especially when gifting the property to someone. This deed should be registered at a sub registrar’s office, and once the deed is registered, the transfer is irrevocable.

Important points to remember while drafting a property sale agreement:

Here are a few major things to remember when executing a sale deed.

1.Ownership Transfer Clause: Ensure that the sale deed includes a clause transferring ownership rights to the buyer upon completion of the purchase.

2.Detailed Property Description: Include a detailed description of the property being purchased to avoid any confusion or disputes later on.

3.Clear Purchase Price: Specify the agreed-upon purchase price clearly to eliminate ambiguity and ensure both parties understand the financial commitment.

4.Clear Title: Verify that the property’s title is free from any encumbrances to avoid legal complications post-sale.

5.Encumbrance Verification: Have the registrar’s office verify the encumbrance status

of the property for added assurance.

6.Utility Bills and Taxes: Ensure all utility bills (water, electricity), property taxes, and any other related dues are paid up to date before the sale.

7.No Pending Dues: Confirm that there are no pending maintenance charges or other dues associated with the property.

8.Comprehensive Terms and Conditions: The sale deed should outline all terms and conditions of the sale comprehensively to avoid misunderstandings.

9.Dispute Resolution Mechanism: Specify the method for resolving disputes that may arise during the sale process, such as through mediation or arbitration, to streamline conflict resolution.

Role of Indemnity Bond in Property transfer:

The Indemnity bonds promise financial compensation in case there is any breach of contract due to any illegal activities. The primary purpose of drawing an Indemnity bond is to safeguard either of the parties from the loss.

An indemnity bond for property is a legal document that serves as a guarantee against any financial loss or damage that may occur due to the transfer of property.

The bond is typically issued by a third party, such as an insurance company or a financial institution, and it outlines the terms and conditions of the indemnity agreement. This type of bond provides an added layer of security and assurance for the parties involved in the property transaction.

When creating a property sales agreement, it is of utmost importance to include clauses that precisely outline the terms and conditions of the sale. These clauses should cover the transfer of ownership rights, the specified purchase price, and any potential disputes that may arise. Additionally, it is necessary to ensure that the property’s title is free from any encumbrances. By following these guidelines, all parties involved can avoid any legal complications and ensure a smooth property transfer process while safeguarding their interests.

Need more insights?
Feel free to write to us at

Share this post?