The transaction of sale is an ordinary contractual transaction and is governed by the Indian Contract Act 1872. Parties may settle any terms of sale, which shall be binding upon them. Where no terms are settled between the buyer and seller, or the contract is silent on certain terms, the residuary terms have been provided in Section 55 of the Transfer of Property Act, which will become operational between the buyer and the seller.
Rights to the buyer
- Benefits of any improvements in the immovable property
- Benefits of increase of value of the immovable property
- Benefits of rents and profits of the immovable property
- Charge on the property in favour of the buyer. The charge would last until the conveyance is executed by the seller, and possession is given to the purchaser.
- Original title deeds to the property after full payments have been made. This is not applicable where the buyer is buying part property and the seller retains any part of the property. The buyer is still entitled to a certified copy of the same.
Liabilities of the buyer
The buyer is liable to pay to the seller
- The purchase money at the time and place of executing the sale deed. Where the immovable property is not free from encumbrances, the buyer has the right to retain the part of sale consideration to meet such encumbrances.
- To bear the loss, after the ownership in the property has been passed on to him, arising from damage, injury or decrease in value in the said immovable property.
- All public charges and rent from the date of sale.
Rights of the Seller
- Seller is entitled to the rents and profits of the immovable property till the ownership is passed on to the buyer
- Seller has the charge over the immovable property in cases where the consideration is promised or part paid.
Liabilities of the Seller
- To disclose any material defect in the property, which the buyer could not have detected in ordinary care
- To produce any document of title of the immovable property when requested by the buyer
- To answer all relevant questions to the buyer in respect of the title or the property sold
- To execute a proper conveyance of the immovable property on receipt of entire sale consideration at a proper time and place
- To take care of the immovable property and title documents between the date of contract of sale and delivery of property
- To give possession of the immovable property to the buyer or his authorized representative
- To pay the public charge and rent in respect of the immovable property till the date of sale
