Sale of Immovable Property

Introduction

A sale relates to a transaction between living parties dealing with immoveable property. Section 54 contained in Chapter III of the Transfer of Property Act, 1882 (TPA) deals with the concept of sale.

Definition of Sale

Section 54 defines sale as a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised.

Registration of Sale

• As per Section 54, such transfer, in the case of tangible immoveable property of the value of one hundred rupees and upwards, or in the case of a reversion or other intangible thing, can be made only by a registered instrument.
• In the case of tangible immoveable property of a value less than one hundred rupees, such transfer may be made either by a registered instrument or by delivery of the property.
• Delivery of tangible immoveable property takes place when the seller places the buyer, or such person as he directs, in possession of the property.

Contract For Sale

• A contract for the sale of immoveable property is a contract that the sale of such property shall take place on terms settled between the parties.
• It does not, of itself, create any interest in or charge on such property.

Distinction Between Sale and Contract for Sale

Essentials of Valid Sale

• Parties to Sale: In a sale, there must be at least two parties. The person who transfers his / her property is known as the transferor / seller / vendor and the person to whom the property is transferred is known as the transferee / buyer / vendee.
• Competency: For a valid sale, both the buyer and seller have to be competent on the date of the sale:
  • The seller must have ownership of the property which he is going to sell.
  • The seller must have legal title to it, only then can he sell the property.
  • The seller must not be a minor.
  • The seller must not be of an unsound mind.
  • The seller must not be statutorily incompetent.
  • The buyer must be competent to take the ownership of the property.
  • The buyer should not be disqualified from buying the immovable property by any law in force at the time of the sale.
• Subject Matter of Sale: It specifically deals with the sale of immovable property. Immovable property can be tangible or intangible.
  • Tangible property is one that can be touched, such as a land, a house, a tree, things attached to earth, etc., while intangible property refers to a property that cannot be touched such as a right of ferry, a right to mortgage, a right of fishery, etc.
• Price or Consideration: Price is an essential element of the sale. At the time of the contract of a sale, a price must be ascertained at which the property is going to be transferred.
  • The price can be paid at the time of sale or before the sale in advance or after the sale. At the same time, it can be paid in a lump sum or in part.
• Conveyance: Section 54 provides two modes for transfer of property –
  • Delivery of possession
  • Registration of sale deed