We have often wondered about the Transfer of Property Act landscape of Pakistan. It is all about buying/ selling, or in simple words, the ownership or transfer of a particular property from one person to another. Now, here comes the hassle that it is not a convenient or easy task but a demanding deal.
You are supposed to study the Transfer of Property Act to understand the methods and due documentation required when executing the Act in Pakistan. In this short blog, we will help you understand the reasons, situations, and valid conditions required for property transfer procedures.
Meaning of Transfer of Property Act - Legality
Transfer of Property Act here in Pakistan means if you possess a title, you are legally the property owner, as transfer of property comprises landholding from one person to another. Several types of simple transfers do not imply the sale of the property but are transferred in other forms, including:
Mortgage: In this type of property purchase and investment, the Transfer of Property Act provides legal support to both the lender and the borrower and ensures the lender’s property is secure until the loan is completely repaid.
Gift Deed: As per the Transfer of Property Act, the donor and the done both fully fulfill all the legalities protecting the transactions from any ambiguity, disputes, or claims. Hence, the property transfer is successfully done without monetary considerations.
Lease & Exchange: The Act governs the rights and responsibilities of lessors and lessees as per lease agreement laws. It includes terms of duration, rent, and possessions, ensuring legality and clarity.
Transfer Act in real estate means dealing with immovable properties. Now, the question arises: what are immovable properties? Hence, it means any property which cannot be moved without alteration in its nature. Only its category could be changed, but it will remain fixed to the earth, called immovable property. In simple words, the transfer of property is preserving the heritage or legacy from one generation to another in most cases. Still, it also means earning ROI or selling for profit in certain situations.
However, the Transfer Act clearly highlights the fact that property is transferable if a compatible contract exists. Also, the person involved in the transfer must undertake an absolute or conditional transfer according to the dedicated laws at the time of transfer.
Transfer of Property Act Pakistan
The Act in Pakistan abides by the following laws that thoroughly govern its application. The following points should be thoroughly learned and understood as the sale and purchase of property will be effectively monitored.
Property of every kind can be transferred under certain conditions, as per the law and its framework.
- The law prohibits the transfer if an heir is due to appear or succeed in a person’s property after their death.
- The right of re-entry for the breach is only allowed to the property owner to avoid malpractice.
- An easement cannot be transferred apart if the easementary rights are accrued due to the transfer of the dominant heritage.
- The restricted property cannot be transferred for the enjoyment of anyone other than the owner. In this case, the right of preemption is an example of non-transferable interest.
- The right to future maintenance is non-transferable.
- The public office or salary of the public officer is non-transferable.
- Stipends allowed to paramilitary and military are non-transferable.
Transfer of Property Act 1882
This Transfer of Property Act 1882 was enacted in July 1882. This law governs property transfers in the form of sale, lease, and mortgage, as discussed earlier. There are specific types of transfers as per the transfer of property. Some are discussed below.
Oral Transfer
The law has specific provisions for property transfers, especially oral transfers. A particular property may be transferred without writing in cases where writing is not expressly required by law.
Mutation of Rights
In revenue records, the transfer of property rights to title ownership from one person to another is referred to as the Mutation of rights. The Land Revenue Act of 1967 governs this process. All provinces of Pakistan apply and follow it, with slight amendments.
The owner, ideally, is responsible for paying the tax and revenue on that particular property. The board of revenue maintains the agricultural lands record, and you can challenge these entries in records-of-rights in courts since the law does not guarantee the title.
Registration Authorities & Sale or Transfer Deed
Large urban cities have a completely different method for recording property transfers or rights of property. Numerous entities administer urban land with their own practices and procedures. Hence, the Registration Act of 1908 regulates the registration of documents. It maintains documents such as lease agreements and sale deeds.
The authorities have offices at Assistant Commissioner, Tehsildar, and Mukhtiarkar. Another unfortunate happening is that the registrar records the transaction while registration but does not validate it by guaranteeing the deal. However, we advise our investors to maintain due diligence before planning to invest or carry out a transaction in real estate.
Transfer Under the Registration Act 1908
You do not need to record gift deeds under the Registration Act of 1908. Similarly, you don’t need to register a deed. Hence, creating a valid, perfect title could be recorded anywhere.
Ostensible Owner Transfer
Simply put, an apparent owner is a transferor authorized by the real owner. The law expects that parties conduct due diligence and assures that the transferor has the right to transfer. Hence, this transfer cannot be null or void, stating that the transferor had no authority.
Transfer of Property Act Pakistan pdf
Let us detail some of the points in the Transfer of Property Act Pakistan PDF that mention the do’s and don’ts of ownership in different cases.
Sale of Immovable Property
The word sale means a transfer of ownership in exchange for a paid price or a promised price to another party. People make such transfers for immovable property valued at one hundred rupees and onwards or for a reversion or other intangible thing using only a registered instrument.
It does change in the case of tangible immovable property of less value than one hundred rupees. Such transfers could be made either by a registered instrument or by delivery of property.
The delivery of tangible immovable property takes place when the seller gives the property to the buyer or such other person as he directs.
A contract for sale is a contract for the sale of immovable property such that a sale of property shall occur on terms settled between parties. It doesn’t itself create any interest in or charge on such property.
Rights and Liabilities of Buyer and Seller
In the absence of a contract to the contrary, the buyer and the seller of the immovable property are subject to liabilities and have the following rights mentioned as applicable to the property sold.
- The seller must disclose any particular material defect in the property that the buyer is unaware of or could not discover with ordinary diligence.
- To produce all the documents related to the property to the buyer upon request for examination.
- The relevant questions asked or put forward by the buyer with respect to the property or title must be answered to the best of his information.
- To execute the proper conveyance of property on payment or tender of the amount due regarding the price.
- To take as much care of the property and all documents as possible between the dates of the contract of sale and delivery of the property.
- To give possession of the property as its nature admits to the buyer or such persons as directed or being so required.
- To pay public charges and rent accrued due to the property up to the date of the sale.
Conclusion
The Transfer of Property Act in Pakistan is the bedrock of real estate transactions, and it steps and assures clarity with the follow-up of legal protocols. It fosters a transparent and secure property market due to the standard outlined rights and responsibilities for all the parties involved directly and indirectly. Hence, adherence to understanding these legal rules and regulations is crucial for safeguarding investments and promoting fair practices.
Hence, if you are interested in investing in Pakistan real estate, diligently researching will make a huge difference.
Finding the right property that will yield the maximum return on investment is an art. You need to narrow down your research specifications, like listing potential projects and schemes and comparing the prices. Later, you will step forward to invest in the best possible property that will bring in profits.
Also, I need to understand the legalities necessary for transparency, legality, and security. The legal framework is a guideline for property transactions that enables parties to engage with clarity and confidence.
