Rights And Liabilities Of Buyer And Seller

In property transactions, it is important to understand the rights and obligations of both the buyer and the seller. Responsibilities such as these in India are primarily governed by the Transfer of Property Act 1882 in India. Your property goes through this law, which ensures transparency, security, and fairness in dealing with property transactions by documenting what is expected from both parties in that exchange.

Readers of this article will get a simplified overview of the key rights and liabilities between buyers and sellers in property transactions.

Key Terms And Definitions Of Buyer And Seller

Before diving into specific rights and liabilities, it is important to clarify a few terms:

Buyer: The person or company purchasing the property.

Seller: The person or entity selling the property.

Transfer of Property Act, 1882: Property transfer law in India like selling property or real estate.

Immovable property: This is used to refer mainly to land and buildings and is distinct from movable assets, such as a car or personal belongings.

Rights And Liabilities Of The Seller

The seller has certain rights and certain liabilities in a property transaction. They have divided it to an extent.

Rights of the Seller

• Right to Earn Profit Until Transfer: The seller is entitled to the income or profit generated from the property, such as rent or lease payments until the ownership is legally transferred to the buyer. This continues until the sale is completed.
• Right to Reclaim Property if Payment is Not Made: If the buyer fails to pay the agreed amount, the seller may be able to retain or reclaim the property. This helps safeguard the seller from financial losses if the buyer does not fulfill their payment obligation.
• Right to Cancel the Sale if Contract Conditions Aren’t Met: If the buyer does not meet certain conditions in the sales contract, the seller has the right to cancel the sale. This right is often part of the contract.

Liabilities of the Seller

• Disclosure of Defects in Property: Legally, the seller is required to disclose any material defects in the property that will impact the value or utility of the property. If the buyer does not know what they are investing in, they can use this against you, and it can be legal.
• Duty to Transfer Title and Documents: Once the property is sold, the seller must ensure that the buyer gets the legal title (or ownership) of the property as well as the relevant documents, deeds, and other papers required for a smooth transfer.
• Delivery of Possession: When the payment is complete, the seller has to transfer the physical possession of the property to the buyer. This is a very important step, as the buyer must have the right access to the property.
• Payment of Liabilities Before Transfer: When things go wrong, you appeal to that group to pay their liabilities before contracting them and transferring currencies from hand to hand. When the property is transferred from the seller to the buyer, they are obligated to pay any existing debts, taxes, or other charges for the property. This helps the buyer avoid the liabilities that come with the property.

Also Read : Rights And Duties Of Buyer

Rights And Liabilities Of The Buyer

At the same time, the buyer enjoys certain rights and is responsible for certain responsibilities in a property transaction.

Rights of the Buyer

• Right to Inspect the Property and Documents: The buyer has the 'right to inspect and see' the documents relating to the property before the purchase is completed. You will also have to check the title deed, ownership documents, and any document that is required to show that the property is legally available for purchase.
• Right to Acquire Clear Title: As per the law, the seller must provide the buyer with his 'clear and unencumbered title' to the property. This should mean that there should be no legal issues, liens, or ownership disputes when the transfer is made.
• Right to Claim Damages for Concealed Defects: If major defects or flaws in the property are not disclosed by the seller, the buyer has the right to either seek compensation or reverse the transaction, depending on the magnitude of the defect.
• Right to Possession After Payment: As soon as the payment is made, the buyer gets the right to take possession of the property. Any delay or denial of possession can be legally challenged.

Liabilities of the Buyer

• Duty to Pay Agreed Price on Time: The buyer's responsibility relates to making payments as per the terms of the agreement. It is also required to pay any advance deposits or installments, which is legally binding under the contract.
• Duty to Bear Costs of Registration and Stamp Duty: The seller provides the title documents, but the buyer pays for the legal transfer of the property and (if applicable) the stamp duty. Paying these charges is necessary for the transfer of ownership to be complete.
• Obligation to Check Ownership Validity: The buyer should only ensure that the property he is buying is legal and who owns it. This manages to avoid legal issues and makes the buyer aware of the past history of the property.
• Responsibility for Property Maintenance Post-Purchase: The buyer takes possession and is then responsible for maintaining the property. This includes all repairs, renovations, or maintenance required to maintain or improve the value of the property.

Key Provisions Of Section 55

Section 55 of the Transfer of Property Act, of 1882, outlines the rights and duties of both buyers and sellers in property transactions. This key provision ensures fairness by establishing clear responsibilities regarding title, possession, and pricing.

Section 55 of the Transfer of Property Act, 1882

• Rights and Duties as per Agreement: This section governs the rights and duties of the buyer and the seller, except as otherwise agreed in a contract between them and in the absence of such a contract. In simple terms, it means that if the parties agree on different terms, they can circumvent the default provisions contained under the Act.
• Seller’s Duty to Provide Title and Possession: The Act requires the seller to transfer ownership and hand over possession of the property at the time of sale.
• Buyer’s Right to Fair Price and Clear Title: In Section 55, which protects the buyer’s interests in a sale, the buyer has the right to expect the property to be free of encumbrances and should get a fair valuation of the property.

Conclusion

It is important to know the rights and liabilities of the buyer and seller before carrying out a smooth property transaction. By following the Transfer of Property Act of 1882, if both parties in a transaction adhere to the principles of the Act, they not only ensure a fair and transparent transaction but also a legally sound one.

Buyers and sellers should be aware of these provisions and, if necessary, consult professionals before entering into any transaction, and ensure that they act by their obligations as well as their interests.

FAQs On Rights & Liabilities Of Buyer And Seller Under The Transfer Of Property Act, 1882

The Transfer of Property Act, 1882 outlines the rights and liabilities of both buyers and sellers in property transactions. Here are some frequently asked questions to help clarify these key aspects.

Question- What are the seller’s obligations under Section 55 of the Transfer of Property Act?

The seller is required to provide clear title to the property and hand over possession to the buyer. Additionally, the seller must disclose any encumbrances on the property and ensure the property is free from such claims.

Question- What rights does the buyer have under Section 55?

The buyer has the right to receive the property free of encumbrances, with a fair valuation, and to take possession upon completion of the sale. The buyer can also expect the title of the property to be valid and clear of any legal disputes.

Question- Can the rights and duties of the buyer and seller be modified by agreement?

Yes, Section 55 allows buyers and sellers to modify their rights and duties through an agreement, as long as it is not in violation of any law. In the absence of such an agreement, the default provisions of the Transfer of Property Act apply.

Question- What happens if the seller fails to transfer the property as agreed?

If the seller fails to transfer the property or provide the agreed-upon title and possession, the buyer can seek legal remedies, including demanding specific performance or compensation for any loss incurred.