real estate management-1
TRANSCRIPT
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REAL ESTATE MANAGEMENT
BY
MRS JYOTSNA CHAUBAL DESHPANDE
CHARTERED ENGINEER, CHARTERED PLANNER.CHARTERED VALUER.
FORMER JOINT DIRACTOR OF TOWN PLANNING
MAHARASHTRA STATE.
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REAL ESTATE
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PROPERTY
DICTIONARY MEANING
THINGS OWNED POSSESSION
ALL USEFUL THINGS OWNED BY MANCLASSIFIED ASWEALTH
PROPERTY-INTANGIBLE CONCEPT BEINGRIGHT TO POSSESS WEALTH
PROPERTY-LEGAL RIGHTTHATEXPRESSES THE RELATIONSHIP BETWEENOWNERS AND THEIR POSSESSIONS
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PROPERTY
DEFINITIONCONTINUOUS, EVER
LASTING USE, CONTROL AND
DISPOSITION EXERCISABLE BYOWNER OVER THING OR OBJECT.
PROPERTY SIGNIFIES SUM TOTAL OF
ALL RIGHTS AND POWERS INCIDENTTO OWNERSHIP.
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REALTY
LAND ORIGINALLY PROVIDED BY NATURE NOLONGER EXISTS ANYWHERE ON EARTH.
ALL LAND DIRECTLY ( BY CONSTRUCTION IFIMPROVEMENTS ON SITE ) OR INDIRECTLY (BYIMPROVEMENTS RELATED TO SITE) MODIFIEDBY MAN.
LAND TOGETHER WITH IMPROVEMENTS, ISDESIGNATED AS REALTY
REALTY INCLUDES LAND AND BUILDINGS, ASALSO ANYTHING PERMANENTLY AFFIXED TO
LAND I.E. FIXTURES.
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ESTATE
THE KIND OF ESTATEMEASURES THERIGHTS AND INTERESTS AN OWNER HASIN REAL PROPERTY IN TERMS OF:
DURATIONTIME GEOGRAHICAL EXTENTBREADTH,
DEPTH AND HEIGHT
DEGREESOLE OR CO-OWNERSHIP
CHARACTERLEASEHOLD, EASEMENTS
TERM ESTATE HAS BROADER MEANINGTHAN TERM TITLE.
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CLASSIFICATION OF REALESTATE
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PROPERTY
TYPES-1) CORPOREAL OR TANGIBLE
2) INCORPOREAL OR INTANGIBLE
TANGIBLEOWNERSHIP IN MATERIALTHINGS WHICH CAN BE PHYSIALLYTOUCHED OR FELT, E.G.LAND,FURNITURE, JEWELLARY ETC.
INTANGIBLEOWNERSHIP OF NON-MATERIAL THINGS WHICH CANNOT BEPOSSESSED IN PHYSICAL SENSE E.G.COPYRIGHTS, LEASES, GOODWILL,
EASEMENT RIGHTS ETC
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PROPERTY
CUSTOMARY CLASSIFICATION
1) MOVABLE.
2) IMMOVABLE.
MOVABLEFURNITURE , PLANT ANDMACHINARY, STOCKS, SHARES,DEBENTURES, INTELLECTUAL PROPERTY,GEMS AND JEWELLARY, CURRENCY, ARTS
AND ARTIFACTS ETC. IMMOVABLELAND AND BUILDINGS
ETC.
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IMMOVABLE PROPERTY
DEFINITION [AS PER SECTION 3(26) OFGENERAL CLAUSES ACT]
IMMOVABLE PROPERTY SHALL INCLUDELAND, BENEFITS TO ARISE OUT OF LAND ANDTHINGS ATTACHED TO THE EARTH ORPERMANANTLY FASTENED TO ANYTHINGATTACHED TO THE EARTH.
ATTACHED TO EARTH MEANS-
1. ROOTED IN EARTH AS TREES
2. IMBEDDED IN EARTH AS WALLS, BUIDG.
3.ATTACHED TO EMBEDDED FOR
PERMANAT BENEFICIALENJOYMENT.
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IMMOVABLE PROPERTY
(COND) AS PER TRANSFER OF PROPERTY ACTNO
POSSITIVE DEFINITION
STATES THAT IMMOVABLE PROPRTYDOES NOT INCLUDE STANDING TIMBERGROWING CROPS AND GRASS.
AS PER JUDICIAL DECISIONS
IMMOVABILITY IS INCAPACITY OF ATHING OF SUFFERING ALTERATION INRELATION TO PLACE, WITHOUT INJURYOR DAMAGING ITS SURROUNDINGS
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IMMOVABLE PROPERTY
( CONTD) CRITERIA
THE LINE OF DISTINCTION BETWEENMOVABLE AND IMMOVAVLE IS THIN.
THE INTENTION OF PARTIESKEY
THE MODE OF ANNEXATIONIMPORTANT
IF PLANT OR FIXTURE CANNOT BE
REMOVED WITHOUT GREAT DAMAGEINTENDED TO BE ANNEXED INPERPETUITY.
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LAND OWNERSHIP
LAND IS ORIGINAL AND BASIC FACTOR OFPRODUCTION.
LAND AS NATURE PROVIDED CONSISTS
OF THE EARTHS CRUST. LEGALLY, POSSESSION OF PART OF
EARTHS CRUST INCLUDES RIGHTS TOCONTROL MINERALS, GAS AND OIL
BELOW THE EARTHS SURFACE AS WELLAS AIR SPACE ABOVE THE GROUND.
SHAPEINVERTED PYRAMID.
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PROPERTY OWNERSHIP
OWNERSHIP OF REALTY CLASSIFIED ASPROPERTY.
TWO TYPES.
PERSONAL PROPERTYOWNERSHIP IS FOR A
LIMITED TERM OF YEARS. REAL PROPERTYOWNERSHIP OF REALTY
EXTENDS FOR A LIFETIME.
LESSEE POSSESSES PERSONAL PROPRETY IN
REALTY, WHERE AS LESSOR OWNS REALPROPERTY.
REAL PROPERTY CONSISTS OF LAND ANDOBJECTS PERMANENTLY ATTACHED TO
GROUND.
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ESTATES IN PROPERTY
FREEHOLD OR FEE SIMPLE
HIGHEST FORM OF RIGHT WITH REGARD TOREAL ESTATE. OWNER CAN:
USE PROPERTY IN ANY MANNER
ABUSE PROPERTY SO LONG AS IT DOES NOTRESULT IN A NUISANCE.
ENJOY PROPERTY BY EXCLUSIVE POSSESSION DERIVE BENEFITS, INCOME OR PROFIT FROM
PROPERTY.
DISPOSE THE PROPERTY BY SALE, GIFT OR
WILL.
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LESSER ESTATES IN
PROPERTY FREEHOLDERS RIGHT SUPERIOR TO ALL
OTHER RIGHTS.
ESTATES IN LAND OF LESSER QUANTITYTHAN WHOLE OWNERSHIP.
ESTATE THAT BELONGS TO A PERSON
ONLY UNDER CERTAIN TERMS AND
CONDITIONS OR REVERT IN CASE OF
CERTAIN EVENTS, ARE LESS THAN
ABSOLUTE.
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LEASE
OR ESTATE FOR YEARS
LEASE : FREEHOLD ESTATE GIVEN BYFREEHOLDER FOR USE FOR A FIXED DURATIONUNDER CERTAIN TERMS AND CONDITIONS.
LESSOR: FREEHOLDER OR LANDLORD. LESSEE : PERSON ACCEPTING LEASE.
RENT : LESSEE PAYS TO LESSOR RENT ORCOMPENSATION FOR USE OF LAND
LEASE DOCUMENT : WRITTEN PROMISE /COMMITMENT TO PERFORM CERTAIN DUTIESE.G. PAY TAXES, MAINTAIN PROPERTY ANDRETURN IN GOOD CONDITION ON TERMINATION
OF LEASE.
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SUBLEASE
LESSEE MAY TRANSFER HIS INTERESTFOR A SHORTER PERIOD THAN THEREMAINING PERIOD OF LEASE, WITHAPPROVAL OF LESSOR AND INCONFORMITY WITH THE LEASE TERMS .
SUB LESSEE : THE TRANSFEREE
HEAD LESSEE: THE MAIN LESSEE. HEAD LESSEE COLLECTS THEPROFIT
RENT.
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MORTGAGE
ANOTHER PROPERTY INTREST IS CREATEDWHEN FREEHOLDER MORTGAGES HISPROPERTY I.E. PLEDGES IT AS SECURITY
AGAINST LOAN. MORTGAGOR : OWNER OF PROPERTY
MORTGAGEE : LENDER OF LOAN
FAILURE TO RETURN PRINCIPAL OR INTEREST
AUTHORISES MORTGAGEE TO SELL THEMORTGAGED PROPERTY TO LIQUIDATE THEDEBT.
EQUITY : MORTGAGORS PROPERTY RIGHTS
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MORTGAGE
THE MOERTGAGOR AND THE
MORTGAGEE HAVE BECOME THEDIVERSE OWNERS IN A SINGLE
PROPERTY.
THEIR INTEREST ARECOMPLEMENTARY.
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EASEMENTS
EASEMENTS ARE MEANS BY WHICH
ONE PARTY MAY GAIN THE USE OF
SOMEONE ELSES LANDWITHOUTOBTAING THE TITLE.
OWNER MAY USE ADJACENT LAND
OWNED BY HIS NEIGHBOUR ON ATEMPORARY OR PERMANENT BASIS
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EASEMENTS
(CONTD)
DEFINITION:
A RIGHT GRANTED BY A
LANDOWNER TO SOMEONE FOR THE
NONEXCLUSIVE USE OF A PORTION
OF THE LAND FOR A SPECIFICPURPOSE.
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EASEMENTS
(CONTD) EASEMENT RIGHTS ARE FREELY
BOUGHT OR SOLD IN THE OPEN
MARKET. EASEMENTS:
RIGHT OF PASSAGE OR ACCESS
THROUGH PRIVATE ALLEYWAYS RIGHT OF USE OF AIRSPACE OVER A
PROPERTY
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OWNERSHIP
OWNERSHIP IS CONGLOMERATION
OF LEGAL RIGHTS.
OWNERSHIP DENOTES THE LEGAL
RELATION BETWEEN A PERSON AND
AN OBJECT.
IT IS THE SUM TOTAL OF RIGHTS A
PERSON HAS OVER AN OBJECT.
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OWNERSHIP
(CONTD)
RIGHTS:
1) THE RIGHT TO POSSESS AN OBJECT
(THOUGH HE MAY NOT HAVE THEPHYSICAL POSSESSION)
2) THE RIGHT TO USE AND ENJOY THETHING OWNED
3) THE RIGHT TO CONSUME, DESTROY ORALIENATE THE THINGS OWNED. THESEARE KNOWN AS THE LIBERTIES OFOWNERSHIP AND POWER.
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OWNERSHIP
(CONTD) 4) THE RIGHT TO ENJOY A PROPERTY
INDEFINATELY.
THUS HOUSE PROPERTY REMAINS UNDER THEOWNERSHIP OF THE LANDLORD UNTIL SOLD.
5) THE RIGHT TO RETAIN RESIDUAL RIGHTOVER A PROPERTY.
WHEN PROPERTY LET ON LEASE, OWNERRETAINS RIGHT OF REVERSION I.E. TORECEIVE BACK THE PROPERTY ON EXPIRY OFLEASE.
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POSSESSION
WORD PROPERTY IMPLIES BELONGING ORPOSSESSION.
CONCEPT OF POSSESSION IS AN ABSTRACTNOTION.
IT IS NOT PURELY LEGAL CONCEPT.
POSSESSION IS A FACTUAL CONCEPT.
IT DENOTES BOTH PHYSICAL CONTROL AS
WELL AS HAVING PHYSICAL CUSTODY OF THETHING.
PERSON HAVING POSSESSION ALSO HASPOWER TO EXCLUDE ALL OTHERS FROM
INTERFERING WITH HIS POSSESSION.
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TYPES OF OWNERSHIP
OWNERSHIP OF A PROPERTY NEED NOT BEALWAYS EXCLUSIVE.
IT COULD BE SHARED ONE.
PROPERTY MAY HAVE SEVERAL OWNERS. OWNERSHIP IS BUNDLE OF RIGHTS IN A
PROPERTY.
THE BUNDLE OF RIGHTS COULD BE OF
DIVERSE NATURE DEPENDING ON THEPROPERTY IN QUESTION AND MUST BECLEARLY DEFINED.
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GOVERNMENT LIMITATIONS
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GOVERNMENT
LIMITATIONS THEORETICALLY FREEHOLDESRS RIGHT
IS ABSOLUTE.
HOWEVER, EVEN THE FREEHOLDER IS
RESTRICTED FROM ABSOLUTEENJOYMENT.
Government limitations on ownership imposed forwelfare of all citizen
1. Police power - Restrict use of property2. Eminent DomainCompulsory Acquisition
3. Right of Taxation
4. EscheatAssume ownership of unowned property
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POLICE POWER
SOVEREIGN POWER INHERENT IN THEGOVERNMENT, DELEGATED TO LOCALAUTHORITY/ GOVERNING AGENCY
TO RESTRICT THE USE, OCCUPATION AND
RIGHTS IN PROPERTY TO PROTECT WELLBEINGWELFARE, MORALS OR SAFETY -- OF CITIZEN.
WITHOUT ANY COMPENSATION.
RESOURCE TAKEN FOR CITY PLANNING,ZONING AND BUILDING CONTROL.
REGULATIONS OF BUILDING, FIRE ANDHEALTH DEPARTMENTLIMITATIONS UPON
USE OF LAND.
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EMINENT DOMAIN
SOVEREIGN POWER INHERENT IN THEGOVERNMENT
TO TAKE ANY LAND, BY DUE PROCESSOF LAW.
TWO REQUIREMENTS TO BE MET:
1) USE MUST BE PUBLIC
2) JUST COMPENSATON MUST BE PAID. USED TO OBTAIN LAND FOR STREETS,
PARKS, PUBLIC BUILDINGS,PUBLIC/SOCIAL PURPOSES
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RIGHT OF TAXATION
TAXES LEVIED BY GOVERNMENT FOR ITSSUPPORT AND FOR MAINTENANCE OF ITSBRANCHES THAT PROTECT AND BENEFITCITIZEN.
FAIR THAT CITIZEN PAY FOR PROTECTION ANDBENEFITS RECEIVED.
LAND, DUE TO ITS PERMANENCE AND
ACCESSIBILITYCONVENIENT ARTICLE TOTAX.
BASIS FOR LOCAL TAXATION.
TAXES ARE A COST OF LAND USE AND
OPERATIONS.
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ESCHEAT
REVERSION OR ESCHEAT OF LAND
TO THE STATE.
WHEN OWNER DIES, LEAVING NOHEIRS OR WILL TO DISPOSE THE
LAND.
LOGICAL SOLUTION SINCE LANDCANNOT BECOME UNOWNED.
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OTHER LIMITATIONS
PRIVATE OR CONTRACTUAL LIMITATIONSON OWNERSHIP
USUALLY CONTAINED IN DEEDS
EASEMENTS AND LEASESORMORTGAGE INSTRUMENTS.
FREEHOLDER IS VESTED WITH AND HASCONTROL OVER BUNDLE OF RIGHTS
HE MAY GRANT LEASE, CREATEMORTGAGE, INDUCT LICENCE, IMPOSECHARGE & SO ON.
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STATUTORY PROVISIONS
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LAND USE CONTROLS
UNDER
MAHARASHTRA REGIONAL ANDTOWN PLANNING ACT,1966.
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CONTENTS OF
DEVELOPMENT PLAN SECTION 22--
1. ZONINGRESIDENTIAL/COMMERCIAL
INDUSTRIAL/RECREATIONAL 2. RESERVATION OF SITES FOR PUBLIC
PURPOSES --SCHOOLS, COLLEGES,
HOSPITALS, LIBRARIES,PARKS ANDGARDENS ETC.
3. ROAD NETWORK
4. DEVELOPMENT CONTROL RULES
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ZONING
RESTRICTIVE PLANNING RESIDENTIAL ZONE
INDUSTRIAL USE IS NOT PERMITTED
LIMITED COMMERCIAL USE PERMITTED NO DEVELOPMENT/GREEN ZONE
ONLY RECEATIONAL USE PERMITTED
THROUGH ZONING--
1. ADVANTAGES OF CONGLOMERATIONOF INDUSTRIES IS OBTAINED.
2. MIXING OF NON-CONFORMING USERSPREVENTED
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DEVELOPMENT CONTROL
RESTRICTIVE PLANNING DEVELOPMENT PERMISSION NECESSARY
BEFORE CARRYING OUT ANY
DEVELOPMENT.
PROPOSALS OF DEVELOPMENT PLAN
SHPULD BE TAKEN INTO ACCOUNT WHILE
GRANTING DEVELOPMENT PERMISSION. PROVISION OF APPEAL AGAINST REFUSAL
OR CONDITIONAL GRANT OF DEVELOPMENT
PERMISSION
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DEVELOPMENT CONTROL
RULES
PART AND PARCEL OF DEVELOPMENT PLAN.
FROM PUBLIC HEALTH AND SAFETY POINTOF VIEW.
FOR CONTROLLING AND GUIDING THEDEVELOPMENT TO ACHIEVE THE GOALSAND OBJECTIVES OF THE DEVELOPMENTPLAN.
STANDARDIZATION OF DEVELOPMENTCONTROL RULES FOR A, B, C CLASSMUNICIPAL COUNCILS AND MUNICIPALCORPORATIONS, KEEPING IN VIEW THE
NATIONAL BUILDING CODE.
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TRANSFER OF PROPERTY
UNDER
TRANSFER OF PROPERTY ACT, 1882.
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TRANSFER OF PROPERTY
ACT Ownership is a conglomeration of legal rights and
ownership denotes the legal relation between theowner and the real property and is thus the sum
total of his rights thereon.
It therefore, becomes necessary to learn the legalprovisions for Asset Acquisition or for AssetDisposition for that matter.
The Transfer of Property Act,1882 deals with theprinciples behind the transfer of all properties,movable or immovable.
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CONSIDERATION
Section 4 of the Transfer of Property Actstates that the chapters and sections of the
Act which relate to contracts shall beconsidered to be a part of the IndianContract Act, 1872. Likewise, certainsections of this Act dealing with registration
of transactions should be consideredsupplemental to the Indian Registration Act,1908.
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SECTION 5
Section 5 defines transfer of property as atransaction whereby the possession or ownershipof a property undergoes a change by the acts of the
parties to the said transaction. Examples of such achange of ownership or possession may be in theshape of a sale (where the ownership is totallyeffected), a mortgage (where possession of the
property is used as a security for payment of aloan) or a lease (where possession of a property isenjoyed on payment of a rent) among others.
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TRANSFER OF INTEREST
Ownership, as seen earlier, consists of a
bundle of rights. The rights which so make
up absolute ownership (e.g., right ofpossession or right of engagement) are
called interests in property and a transfer of
property is either a transfer of absoluteownership or a transfer of one of those
interests.
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SECTION 6
Transferability is the general rule in the law ofproperty and the right to property includes theright to transfer the property to another person.
Subject to this general principle, the Transfer ofProperty Act lists certain properties which cannotbe transferred.
Section 6 of the Act states that excepting these and
certain other properties whose transfers arerestricted by other laws, property of any kind maybe transferred.
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SECTION 7
Section 7 deals with competency to be atransferor. It states that a transferor must (a) becompetent to contract, and (b) have title to the
property, or authority to transfer the property if theproperty is not his own. In this connection,reference is made to Sec. 11 of the Indian ContractAct, 1872 which specifies the competency to
contract and states that a person is competent tocontract if he is (a) of the age of majorityaccording to the law to which he is subject, (b) ofsound mind, and (c) not otherwise disqualified
from contracting.
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POWER TO CONTRACT
It is thus clear that the power to transfer depends on thepower to contract, as without a contract to give andtake, there can be no transfer at all. Further, it is also a
well established principle of law that a minor lacks thecompetence to contract and consequently thecompetence to transfer, and what is more, a minor doesnot even have the competency to authorize another to
enter into a contract on his behalf. Although a minorcannot be a transferor, a transfer made to a minor is avalid one. In other words, a minor lacks thecompetence to be the transferor but he possesses the
competence to be a transferee.
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SECTION 8
Section 8 of the Act confers stability on title
and removes speculations in a transfer. It
elaborates the operation of a transfer andstates that unless a different intention is
expressed or implied, a transfer of a
property passes immediately to thetransferee.
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SECTION 8 (CONTD)
Section 8 also elaborates the legal incidents involved inthe transfer. Some of these are:
1. Where the property is a land- The easementsannexed thereto, the rents and profits accruing after thetransfer and all things attached to the earth.
2. Where the property is machinery attached to theearth- All movable parts thereof.
3. Where the property is a house- The easementsannexed to it, the rent accruing after the transfer as wellas locks, keys, doors, windows and all other thingsprovided for permanent use.
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SALE OF IMMOVABLE
PROPERTY Section 54 defines a sale as a transfer of ownership in
exchange for a price paid or promised or part paid andpart-promised.
In the case of a tangible immovable property of thevalue of Rs 100 or more, the sale can be made only bya registered instrument. In the case of a tangibleimmovable property of a value less than Rs 100, sale is
effected either by a registered instrument or by thedelivery of the property, that is, when the seller placesor directs the buyer in possession of this property.
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CONTRACT FOR SALE
A contract for the sale of immovable
property is a contract that a sale of suchproperty shall take place on terms settled by
the parties. A contract for sale does not
create any interest or charge on such
property.
O GAG S A C A G S
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MORTGAGES AND CHARGES
OF IMMOVABLE PROPERTY This comprises Section 58 to 104 of the Act.
Section 58 defines mortgage and associated terms.Mortgage is defined as the transfer of an interest in a
specific immovable property for the purpose ofsecuring the payment of money advanced or to beadvanced by way of loan, for an existing or future debt,or the performance of an engagement which may give
rise to a pecuniary liability. The 'Transferor' is calledthe mortgagor. The 'Transferee is called themortgagee. The principal money and interest is themortgage money. The instrument by which themortgage is created is called the mortgage-deed.
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FEATURES OF A LEASE
WHAT IS A LEASE
A lease of an immovable property is a transfer of a
right to enjoy such property for a certain time(express or implied), or in perpetuity, in
consideration of a price paid or promised, or of
money, a share of crops, service, or any other
thing of value, to be rendered periodically, or onspecified occasions, to the transferor by the
transferee, who accepts the transfer on such terms.
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FEATURES OF A LEASE
(CONTD) The price is called the premium. The
money, share, service or other thing to be
rendered periodically is called the rent. The transferor is the lessor.
The transferee is the lessee.
The lease of immovable property isgoverned by Sections 105 to 117 of theTransfer of Property Act.
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ESSENTIAL ELEMENTS OF
LEASE Lessor
He / She must be a person competent to enter intoa contract and must have authority and title to doso.
Lessee
He / She must be a person competent to enter into
a contract on the date of execution of the lease.Whereas a sale or a mortgage to a minor is valid, alease to a minor is void, as the lease is to beexecuted both by the lessor and the lessee.
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ESSENTIAL ELEMENTS OF
LEASE Subject matter
The subject matter of the lease must be a propertyand its description must be fully given in the leasedeed.
Duration
A lease must be made for a certain time, express
or implied, or -in perpetuity. It may be noted herethat under English law, a lease into perpetuity isunknown. In India, however, such leases may becreated by an express or a presumed grant.
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ESSENTIAL ELEMENTS OF
LEASE Consideration
Consideration may be premium plus rent, or
premium alone or rent alone. Premium isthe price paid or promised in consideration
of a transfer by way of lease. Any payment
by the lessee that is part of the considerationof the lessee is rent.
FEATURES OF A LEASE
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FEATURES OF A LEASE
(CONTD)
Agreement There must be an agreement of lease between lessor and
lessee. At the same time, merely an agreement to lease doesnot establish a legal relationship between lessor and lessee.
The term demise is used in English law but is not defined inthe Transfer of Property Act. The test for determiningwhether an agreement to lease effects a present demise isnot whether the transfer is to operate immediately but
whether the right to enjoy the property is actuallytransferred or not. An agreement to lease creating a presentdemise required writing and registration without which itwill not be admissible in evidence. The lessee must acceptthe lease.
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FEATURES OF A LEASE
Ordinarily, a lease is a grant of property for use, for a
specified time by lessor to lessee, the consideration being,
usually, the payment of premium and / or rent. In any case,
certain rights are conferred on the lessee by the lessor. Theessential features of a lease are as follows:
1. In a lease, there is a transfer of an interest in the
immovable property. For determining whether an interest in
land is transferred or not, the main test is the delivery of'exclusive possession'. If the exclusive possession is not
with the grantee, and the subject-matter is in the control and
possession of the grantor, then it is not a lease.
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FEATURES OF A LEASE
(CONTD) 2. If during the continuance of the lease, any
accretion is made to the property, such accretion
shall be deemed to be comprised in the lease.
3. A lease is transferable and heritable.
4. A lease can be terminated by forfeiture.
5. A lease can be terminated only in one of the
eight different ways enumerated in Section 111 of
the Transfer of Property Act.
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FEATURES OF A LEASE
(CONTD)
6. The lessee's interest is not liable to be defeated
by a subsequent transfer of the leased property
(Section 109of Transfer of Property Act).
7. A lessee is entitled to maintain a suit in his own
name, against trespassers and strangers. 8. Death of either party does not affect a lease.
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HOW A LEASE CAN BE
MADE A lease of an immovable property can be made, from
year to year or for any term exceeding one year orreserving a yearly rent, only by a registered
instrument. In any other case, it can be made eitherby a registered instrument or by an oral agreementaccompanied by delivery of possession.
In the case of a lease by a registered instrument, or
by two or more instruments, the instrument or eachof the instruments must be executed by both thelessor and lessee (Section 107 of the Transfer-ofProperty Act).
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DURATION AND
TERMINATION OF LEASE A lease of an immovable property for agricultural
or manufacturing purpose is deemed to be a lease
from year to year terminable on the part of eitherlessor or lessee by giving six months' noticeexpiring with the end of a year of the tenancy.
For any other purpose, a lease of an immovable
property is deemed to be from month to monthand terminable on the part of either lessor orlessee by giving a 15 days' notice and expires atthe end of the month of the tenancy.
DURATION AND
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DURATION AND
TERMINATION OF LEASE The aforesaid statutory presumptions regarding
duration arise only when there is no agreement betweenthe parties, or local usage is to the contrary (Section106 of the Transfer of Property Act).
Every notice under Section 106 must be in writing,signed by or on behalf of the persons giving it. It musteither be sent by post to the party who is intended to bebound by it or be tendered or delivered personally tosuch party, or to one of his family or servants at hisresidence, or (if such tender or delivery is notpracticable) affixed to a conspicuous part of theproperty.
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DURATION AND
TERMINATION OF LEASE Notice to quit is deemed to have been
waived, when, with the express or implied
consent of the person to whom it is given,
the person giving it does an act showing an
intention to treat the lease as subsisting
(Section 113).
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COMPUTATION OF LEASE
This is governed by Section 110 of the Transfer of
Property Act.
1. Where the time limited by a lease of immovableproperty is expressed as commencing from a
particular day, in computing that time, such day is
to be excluded. Where no day of
commencement" is named, the time so limitedbegins from the making of the lease.
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COMPUTATION OF LEASE
2. Where the time limited by a lease is a year or anumber of years, in the absence of an expressagreement to the contrary, the lease shall last
during the whole anniversary of the day fromwhich such time commences.
3. Where the time limited by a lease is expressedto be terminable before its expiration, and the
lease omits to mention at whose option it is soterminable, the lessee and not the lessor shall havesuch option.
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REGISTRATION
UNDER
BOMBAY STAMP ACT, 1958.
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TAX ON TRANSFER OF
PROPERTY The Bombay Stamp Act, 1958, is a fiscal
measure enacted by the Government of
Maharashtra to secure revenue for the state
on certain cases of instruments.
It extends to the whole State.
An actual Transfer of Property is necessary
to regard the document as conveyance.
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INSTRUMENT
Instrument includes every document by
which any right or liability is, or purports to
be, created, transferred,limited, extended,
extinguished or recorded but does not
include a bill of exchange, cheque,
promissory note, transfer of sharedebenture, proxy and receipt.
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CONVEYANCE
Conveyance includes
1. A conveyance on sale,
2. Every instrument,3. Every decree or final order of any court,
4. Every order made by High Court u/s 394
of Companies Act, 1956,by which property or any other estate or
interest is transferred.
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AMENDMENT
Section 31, sub-section (3), of the Bombay
Stamp Act, 1958: He shall, for the purpose of assessing the
stamp duty, determine the true market value of
such property as laid down in the Bombay
Stamp (Determination of the True Market
Value of Property) Rules, 1995.
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MARKET VALUE
The concept of Market Value was first time
introduced in the Act, by amending Act 16 0f 1979.
Prior to the amendment, the stamp duty waschargeable on the amount set forth in the instrument.
Thus the basis of determining value of the property
for charging stamp duty was shifted fromconsideration set forth in the instrument to the
Market Value.
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REAL ESTATE APPRAISAL
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DEFINITION OF MARKET
VALUE THE MARKET VALUE OF A PARTICULAR
INTEREST IN LANDED PROPERTY MAY BE
DEFINED AS THE AMOUNT OF MONEYOFFERED BY A WILLING PURCHASER TO AWILLING SELLER OF THAT INTEREST,IN THEOPEN MARKET, WHERE THERE ISCOMPETITION, AND BOTH PARTIES ARE
BEING ACTUATED BY ECONOMICCONSIDERATIONS, AND WHERE THERE IS NOUNDUE PRESSURE ON EITHER OF THEM.
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VALUATION
OF IMMOVABLE PROPERTIES PROPERTY: - Right to own and possess andto put to Legal and possible
uses.
- Land together with building
improvements plus anything
permanently affixed to it.
IMMOVABLE: Land + Anything attached to it+ Anything embedded in it.
VALUATION: For highest, best and most
profitable legal use.
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COST AND PRICE
COST Expenditure on inputs.
PRICEExpenditure on input +
Profit.
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VALUE
Result of Interaction of Demand and
supply.
Value is not intrinsic in Object. People
create Value.
Individual / Subjective Value.
Market / Objective Value.
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CHARACTERISTICS OF VALUE
FUNDAMENTAL PRINCIPLE OF ECONOMICS IS THAT,FOR ANOBJECT TO HAVE VALUE. IT MUST SATISFY FOLLOWINGBASIC CONDITIONS
UTILITYThe power to render a service or fill a need.
SCARCITYin relation to supply and demand and
possible alternative uses.
DEMANDNeed with monetary power to fill demand.
TRANSFERABILITYRights of possession and control
of ownership of property.
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VALUATION
It is an art or science of estimating the
value for a specific purpose of a
particular interest in property at aparticular moment in time taking into
account all features of the property and
considering all factors of the market.
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PURPOSE OF VALUATION
I) PURCHASE FOR INVESTMENT OR FOR OCCUPATION.
II) SALE/TRANSFER OF THE PROPERTY.
III) MORTGAGE AND OTHER SECURITY.
IV) RENT FIXATION.
V) LAND ACQUISITION.
VI) BETTERMENT CHARGES. VII) AUCTION BIDS.
VIII) PROBATE.
IX) SPECULATION.
X) TAXATION.
XI) INSURANCE.
XII) PARTITION.
XIII) COURT FEES & STAMP DUTYREADY RECKONER.
XIV) RATABLE VALUE.
XV) ARBITRATION.
XVI) LEASES INTEREST/LESSEES INTEREST.
XVII) MERGER AND ACQUISITION OF INDUSTRIAL UNITS.REVALUATION OF ASSETS FOR MARKET CAPITALIZATION.
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INTERESTS IN REAL ESTATE
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INTERESTS IN LANDED
PROPERTY
1] FREEHOLD INTEREST.
2] LEASEHOLD INTEREST.3] SUBLEASEHOLD INTEREST.
4] LIFE INTEREST.
6] RIGHTS OF OCCUPANCY.
7] RIGHT OF WAY.
8] RIGHT OF LIGHT AND VENTILATION.
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PARTICULAR MOMENT IN TIME
The valuation of a property is related to the
date of valuation and is different at different
moments in time.
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FEATURES OF THE PROPERTY
Location
Situation
UserResidential/Industrial/Commercial SizeSmall/Gross
ShapeRegular/Irregular
F.S.I. permissible Road FrontageSmall/Large,
Important Road/Local Road
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FACTORS AFFECTING
REAL ESTATE MARKET
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FACTORS AFFECTING REAL
ESTATE MARKET
Political, Legal, Social, Urban and Economic
forces influence the real estate market.
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TYPES OF LANDED PROPERTY
1] RESIDENTIAL.
a) HOUSES OF VARIOUS TYPES.
b) FLATS AND TENEMENTS.
2] INDUSTRIAL.
I) FACTORIES.
II) WAREHOUSES AND GODOWNS.
3] COMMERCIAL.
a) SHOPS.
b) OFFICES.
4] AGRICULTURAL.
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METHODS OF VALUATION
1] THE DIRECT COMPARISON OR
COMPARATIVE METHOD.2] THE CONTRACTORS METHOD.
3] THE PROFITS OR ACCOUNTS
METHOD.4] THE RESIDUAL METHOD.
5] THE INVESTMENT METHOD.
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COMPARATIVE METHOD
FIND OUT CONSIDERATION ACTUALLY PAID FOR OTHER SIMILARPROPERTIES IN THE SAME LOCALITY AND THREE TO FIVEYEARS PRIOR TO THE DATE OF VALUATION.
FACTORS TO BE TAKEN INTO CONSIDERATION:
1] LOCATION OF PROPERTY.
2] SITUATION.
3] LEVEL OF AMENITIES & FACILITIES.
4] USER OF PROPERTY.
5] AGE OF PROPERTY.
6] CONDITION OF PROPERTY.
7] FACILITES AVAILABLE IN THE PROPERTY.
8] SIZE (FLOOR AREA) OF PROPERTY.
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The Evidence The Market
Should be based on
Transactions of similarproperties
IN the same area
Obtained from
Recent Records
ComparativeValuation
Should befairly stable
Underlyingeconomicfactors shouldbe studied
of Frequenttransactions
The evidence
Transactions of similarproperties COMPARATIVE
VALUATION
In the same area
Recent Records FrequentTransactions
The Market
Should beFairly stable
UnderlyingEconomic
Factors shouldBe studied
COMPARATIVE METHOD
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BELTING METHOD
If the depth of the plot is more than then
the depth of the comparable plots in sales
considered, this method is adopted to value
the land.
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1st Belt
2nd Belt
3rd Belt
X
1 X
Remaining
Full Value
3/4th Value
Of 1st Belt
Value
Of 1st Belt
Recess Land
of Belt Value
Recess Land of Belt Value
R O A D
BELTING METHOD
CONSIDERATION FOR
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CONSIDERATION FOR
DIFFERENT LANDS
Land with return frontage :- Give positive
allowance depending on the importance of
road on which return frontage. Land with irregular shape :- Carve out
regular shape by drawing perpendiculars to
road and give negative allowance toremaining land.
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THANK YOU