Planning to purchase land? A big hurrah on your ventures!
As you plan your purchase, look into the documents you will have to produce during the purchase of the land to make the process hassle-free. A basic knowledge of the documents involved in the buying and selling of land can help you a great deal.
This article will outline the role and importance of a land title deed and its different types.
What is a Land Title Deed?
A land title deed is a crucial document that establishes the ownership of a specific property. It is the legal proof that you can use or sell a piece of land at your discretion.
The land title deed is commonly called a sale deed. The sale deed becomes the title deed when the document gets registered and validated by the court. The Registration Act of 1908 mandates the registration of the sale deed to make it legally authoritative and establish the ownership of the property.
What Does a Land Title Deed Include?
A land title deed usually contains details on the property and its ownership like:
- Location of the property
- Size of the property
- Boundaries of the property
- Name and details of the current owner(s)
- Name and details of the previous owner(s)
- History of ownership transfers
- Limitations on the use of the property
- Rights of use of the property granted to others, like public access
Importance of a Land Title Deed
A land title deed is an extremely important document one has to hold to claim ownership over a piece of property. The document comes with legal perks and other benefits. Some of the important uses of a land title deed include the following:
- A documented ownership history helps resolve conflicts involving claims of ownership and boundary disputes.
- Helps to negotiate proper compensation in case of land acquisition by the government.
- Highly needed while using the property as collateral for availing bank loans and in mortgaging.
- Buying Land is a strong reason for stable investments and attracts development projects.
- Extremely required while selling or transferring the ownership of the property.
Above all, owning proper legally verified land title deeds provides peace of mind, knowing that the ownership of your properties is well-protected.
Types of Title Deed
There are different types of title deeds that are based on specific circumstances and legal requirements. The different types of land title deeds available include:
- Sales deed
- Gift deed
- Mortgage deed
- Lease / rental deed
- Warranty deed
- Quitclaim deed
- Pledges
- Chattel Mortgage
Sales Deed
A sales deed highlights that the ownership of a property has changed. It must be registered per the Registration Act of 1908, and the court must verify it to make it legally qualified. A sales deed usually contains the details of the transaction process.
Gift Deed
A gift deed is donated to a party per the conscious wish of a donor. To make it legitimate, the donor can register the property transaction in a Sub-Registrar’s office, and the donee has to accept the ownership during the donor’s lifetime. Gift deeds do not require payment on behalf of the donee to the donor for transfer of property rights.
Mortgage Deed
A mortgage deed outlines the terms and conditions of the mortgage. It has to be registered to make it legitimate. A mortgage deed acts as collateral. It transfers the title of ownership to the lender to secure a loan. The lender can hold the mortgage deed as collateral until the loan is repaid as agreed in the contract. Upon failure to abide by the terms agreed upon, the lender can take ownership of the property.
Lease or Rental Deed
A lease agreement or a rental deed is a legal document drawn between a property owner and a tenant. A lease or rent deed outlines the terms and conditions regarding the occupancy and utilization of the property, the duration of occupancy, payments, and others. If the lease or rental agreement exceeds 12 months, it has to be registered with a sub-registrar’s office.
Warranty Deed
Warranty deeds come with many benefits and are considered to be the most secure among the different kinds of deeds. It highlights whether the seller is the rightful owner of the property and has the legal right to transfer the ownership if the property is free from encumbrances. Properties with warranty deeds tend to have a higher resale value.
Quitclaim Deed
A quitclaim deed contains details about the property, the landlord’s name, address, and other relevant information. It transfers property ownership rights to the buyer but is not as clear as a warranty deed regarding the encumbrances issues.
Pledges
Pledges are typically used in trust agreements. Under certain conditions, land is pledged as a collateral security. However, unlike mortgages, pledges are not utilized in money-borrowing scenarios. Pledges are similar to promises, such as when a property is pledged or promised to be passed down to specific beneficiaries upon the owner’s demise.
How to Obtain a Title Deed?
To obtain a title deed in India, you would have to take up the following initiatives:
Step 1: Verify the documents that state the ownership of the property.
Step 2: Do a title search with the help of a lawyer. It will help you identify if there are any encumbrances, disputes, or outstanding claims regarding the title of the property.
Step 3: Visit the Sub-Registrar Office (SRO) linked to the land’s jurisdiction and fill out the application form for property registration.
Step 4: Submit the required documents like:
- Proof of ownership documents
- Identity proof (Aadhaar card, PAN card, etc.)
- Address proof
- Land survey documents
- No Objection Certificate (NOC) from any relevant authorities (if applicable)
- Sale agreement (if purchased)
Step 5: Pay the registration fee and any applicable stamp duty charges.
Step 6: Upon scrutiny of the submitted documents and application, you will be asked to sign the deed in the presence of an SRO officer.
Step 7: The SRO officer will then register the deed and issue a copy of the registered deed. The registered deed is the official land title deed.
Do I Need a Land Title Deed to Sell It?
Yes, a title deed is essential when selling land. The deed provides proof of ownership and security for the buyers. Land with a proper title deed tends to be sold quickly.
Selling or buying lands without proper title deeds is not advisable. Title deeds are only required in cases of informal agreements and the selling of unregistered lands. It is advisable to register your property and obtain a legally verified title deed as early as possible if you do not have one.
Benefits of Obtaining a Title Deed
The advantages of owning a legally qualified title deed include:
- Undeniable proof of ownership
- Security during property transactions
- Provides clarity during property transactions
- Useful during mortgaging and availing loans
- Helps in a smooth transaction of property
Challenges of Obtaining a Title Deed
Title deed undoubtedly comes with a lot of benefits. However, some challenges you might face while obtaining a title deed may include:
- The cost associated with securing title deeds like title search fees, recording fees, and so on
- Delay in granting title deeds
- Chances of fraudulency
- Updating of any modifications done like subdivision or easements of properties
Wrap Up
Land title deeds are highly important documents you must hold to secure your ownership or title to a piece of land. A proper land title deed clearly highlights the details of the land and the history of ownership.
Since there are many benefits associated with title deeds, register your land and obtain a title deed as early as possible.
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