Immovable Property: Transfering Provisions

Introduction 

The term “property” is used in a variety of contexts. When one looks around the area, everything that is available might be classified as Property. Property can be defined as any tangible or intangible object that has some value to humans. The property’s most important feature is the value linked to it. It is a source of riches in one form or another. Although the value can be monetary or personal. Property, in a broad sense, includes land, stock, buildings, and debts owed to another person. When employed in a legal context, however, the term has a distinct meaning. It is the absolute right to enjoy and dispose of particular goods in any way.

Origin

The word “property” comes from the Latin word proprietary and the French counterpart properties, which both imply “owned object.” Property and ownership are two concepts that are extremely similar. There is, however, a thin line that separates the two terms. It is not inaccurate to assert that humans have long been conscious of their rights to acquire what is properly theirs. Diverse jurists, including Salmond, Bentham, and Austin, have construed the term property in various ways. Close examination of their definitions will aid us in a better understanding of the notion.

Kinds of Property

Corporeal property and incorporeal property are the two types of property. The difference between corporeal and incorporeal property is that corporeal property is visible and tangible, but the incorporeal property is not. Furthermore, corporeal Property refers to the right of ownership over the tangible property, whereas incorporeal Property refers to an intangible right in rem. Movable and immovable property are two types of corporeal property. Rights in re propria and rights in re aliena or encumbrances are the two types of incorporeal property.

Transfer of Property meaning

The act of passing property from one person to another, whether now or in the future, is known as a transfer of property. By transferring property, the transferor transfers all rights in the property, according to section 8 of the Transfer of Property Act 1882 (The Act). There are several ways to transfer property ownership: 1) permanent relinquishment, 2) temporary relinquishment, 3) purchase,  4) as a gift,  5) as a short-term mortgage,  6) The lease, as well as the leave and licence agreement.

Section 38

When a person who is only authorised to dispose of immovable property under circumstances that are inherently variable transfers such property for consideration while alleging the existence of such circumstances, they are deemed to have existed between the transferee and the transferor and other persons (if any) affected by the transfer on the one hand and the transferor and other persons (if any) affected by the transfer on the other hand.

Essential Elements of section 38

1. The transferor must transfer the property for consideration 
2. The transferor should have a limited power of alienation over the property.
3. The transferor is used certain special circumstances authorised to transfer the property. Special circumstances are generally variable in nature.
4. The transferee must have used reasonable care to ascertain the existence of such circumstances.
5. The transferor must allege the existence of special circumstances at the time of transfer.
6. The transferee must have acted in good faith and must have honestly believed in the existence of those circumstances.

Section 39

When a third person has a right to receive maintenance, advancement, or marriage from the profits of immovable property, and that property is transferred, the right may be enforced against the transferee if he has notice of the right or if the transfer is gratuitous; but not against a transferee for consideration and without notice of the right, nor against such property in his hands.

Rights protected under section 39

There are three definite rights that are protected under this section-

1. A provision for marriage 
2. A right of maintenance 
3. A provision for the advancement 

According to this section, protection is given to a widow, unmarried daughter, wife, son, etc. who are entitled to receive maintenance out of the profits of immovable property. This section provides the security to maintenance not only in the first place but also provides a right to receive the enhanced amount of maintenance if there is any material change. Whereas, the “provision for advancement” means where a property has been purchased in the name of any near relation such as wife or children. Then there is a presumption of the gift of that property in order to enable them to inherit. Taking about the provision of Marriage states that income of the property may be made for the marriage of the members of a Joint Hindu Family. Under this clause, such persons have the right to pursue their rights against transferees for consideration of such property or a gratuitous transferee of such property.

Example

Sultanpur is to be sold by A to B. He sells Sultanpur to C, who has been given notice of the contract, while it is still in effect. B has the same rights to enforce the contract against C as he does against A.

Section 40

Where a third person has the right to prohibit the enjoyment for the more advantageous enjoyment of his own immoveable property, irrespective of any interest in the immoveable property of another or of any easement thereon, or of a contract obligation annexed to ownership but not amounting to an interest or easement. Where a third party is entitled to the benefit of a contract obligation annexed to the ownership of immovable property but not amounting to interest or easement thereon, such a right or obligation may be enforced against a transferee with notice of the right or obligation or a gratuitous transferee of the property affected by it, but not against a transferee for consideration and without notice of the right or obligation, and not against the property in his possession.

Case law

Tulk vs. Monday

Facts: Tulk, the claimant, owned multiple properties in Leicester Square, London, and sold one of them to another, requiring the purchaser to pledge not to build on the property in order to keep Leicester Square ‘unbuilt’ and create an equitable covenant. The land was later sold by the purchaser, and it went through several transactions until being purchased by the defendant, Moxhay. Despite the fact that Moxhay was aware of the covenant linked to the land at the time of the acquisition, he argued it was unenforceable because he was not a party to the original transaction.

Issue: Whether an equitable covenant restricting a property’s usage could “run with the land” and bind a future owner.

Held: The High Court, presided over by Lord Cottenham, ruled in favour of Tulk and issued an injunction prohibiting Moxhay from constructing on the property. At the time of its creation, the covenant was intended to run with the land, and all subsequent purchasers were told of its existence. Furthermore, because a covenant is a contract between a vendor and a vendee, it can be enforced for value against a purchaser with either constructive or actual notice. Moxhay was bound to follow the covenant because he was aware of it.