The term property is used in numerous ways in general. Every object whether it is tangible or intangible has some value to human beings, may be termed as property. The essential characteristic of the property is the value attached to it. The value may be monetary or personal. Generally, property consists of land, shares, buildings and so on. Howbeit, in legal context it is right to enjoy and to dispose of certain things in an absolute manner as one thinks it fit.

What the term property means?

The term “property” is derived from the Latin word “Proprietary” which suggests “a thing owned.” The concept of property and ownership are very similar to each other. However, there is a fine line which makes distinction between the both terms. It might not be inappropriate to mention that humans are conscious of their rights to possess what they rightfully own for long.

What does mean by transfer of property?

Transfer includes the transfer via sale, mortgage, lease, actionable claim gift or exchange. Although transfer can be operated by operation of law like inheritance, forfeiture, insolvency, or sale through the execution of a decree, but this Act does not deal such transfers. The transfer of property can be made in two ways one is by the act of parties and the rest is by the operation of law.

To illustrate, if two living parties are involved in transfer of any immovable property then it will done under the Transfer of Property Act, similarly, if both living parties decided to transfer any movable property then the same will be completed under Sale of Goods Act. Additionally, if property is going to be transferred to the living person from the estate of dead person then it will come under the ambit of Indian Succession Act.

Who can transfer property under the Act?

The following eligibilities are to be fulfilled by an individual to form transfer under the Act:-

  • A person must be competent to enter into a contract like must be above the 18 years of age and have sound mind.
  • Along with competency person must be entitled to transfer the property.
  • In case of non-existence of entitlement a person who is authorized to dispose of the transferable property whether full or partial can transfer the property to the extent of its authority.

What are the various sorts of transfer under the Act?

Sale: – Under this ownership has been transferred to the buyer by seller in exchange of some monetary consideration. In addition to that, possession of the property in sale has been transferred to the buyer on receipt of consideration.

Mortgage: – The property has been transferred to the buyer by the seller in form of mortgage to secure a loan. The mortgagor has to pay the principal loan along with interest to release the immovable property from the mortgagee.

Exchange of immovable property: – When two persons mutually transfer owner of one property for the ownership of another, then such mode of transfer is named exchange.

Lease: – Under this mode, the possession of the property is transferred by one person to another person for fixed price for some time period and ownership rights does not transferred. A lessee doesn’t entitle to further transfer the property. The time period for lease is usually mentioned in lease agreement.

Gift: – The Section 122 of the Act deals with the transfer of property by way of gift. It refers to voluntary transfer of movable or immovable property without any consideration. In such kind of transaction, the person who gives the gift is called donor and the person who receives gift is called donee.  It is notable here that gift cannot be made of uncertain property or future property. The property must be existed.

What are the essentials of valid transfer under the Act?

Here are the components which are required for any transfer to be valid under the Act:-

  • Transfer must be between two living entities: – The property must be transferred between two or more persons who are living. There shall be act of conveyance by some living person to constitute a transfer.
  • Property must be transferrable: – Section 6 of the Act talks about the properties which can’t be transferred. These properties include the follows:-
  1. Chance of heir to succeed an estate.
  2. Right of re-entry except the owner of the property.
  3. An easement aside from the dominant heritage.
  4. A right to future maintenance in any manner.
  5. An interest which is restricted to the owner for private use, for instance tenure of services etc.
  6. Right to sue.
  7. Public office or salary of a public officer.
  8. Pensionary benefits of military and civil personnels.
  9. Properties which do not belong to anybody like sunlight, water, air and so on.
  10. Transfer to an individual who is not qualified to be a transferee.
  • Transferor must be competent: The person who intends to transfer the property must be competent to contract and entitled to transfer the property or authorized to eliminate the transferable property just in case he/she is not the owner of the property. It is marked here that competency includes that a person must have attained the age of 18 years, and is of sound mind and should not be disqualified by law.
  • Transfer should be made consistent with the mode prescribed by the Act: Section 9 of the Act mandates the registration, stamp and attests the documents of transfer so that future hassles can be avoided. Property must be transferred through valid document that is to be executed by the transferor in writing and is attested and registered. However, transfer of property can be made without written document wherein it is specifically provided by the law.
  • Transfer must not offend the rule against perpetuity: According to this rule, no transfer of property can be affected to create an interest which is to take place after the lifetime of one or more persons living at the date of such transfer. The rule of perpetuity ensures that one cannot postpone the vesting of property in a transferee beyond a particular limit.
  • Conditional transfer: If transfer of any property is formed subject to any condition then such condition must not be impossible or forbidden by law or against public policy. The interest accruing in the transfer subject to condition fails and automatically the transfer becomes void.

Formalities of transfer:-

Generally, immovable property can be transferred through registered instrument only but if value of the transferable property is less than 100 rupees then registration is not required. A person who executes the transfer is known as executant. The subsequent steps are included in the formalities of transfer:-

  • Attestation: – The must bear the signature of the executant and attestator also put the signature on the document in the testimony of the very fact of its execution. After this, there must be two witnesses and every witness is required to sign the document in the presence of executant and attestator.
  • Registration: – It is necessary to in some transactions in order to avoid the future complications. The most advantage of the registration is that person handling with the transferred property has to abide by the rights and liabilities provided in the agreement.


Several conditions must be satisfied for valid transfer of property. There are numerous kinds of transfer containing different conditions under the piece of legislation. Apart from this, person intending to enter into any kind of transfer of property must verify the title of the property such as examination of title deeds and registration documents etc.

-Kiranpreet Kaur

Associate at Aggarwals & Associates, S.A.S. Nagar, Mohali