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    Saturday, 28 March 2015

    Rights and Liabilities of Seller and Buyer

    1. Introduction
    Sale is considered main mode of transfer of property. Through this mode of transfer of property, both seller and buyer of immoveable property get some rights and both are subject to some liabilities. However, such rights and liabilities emerge in absence of contract to contrary.

    2. Meaning of Sale
    A contract between two parties, called, respectively, the seller and the buyer, by which the former in consideration of the payment or promise of payment of a certain price in money transfers to the latter the title and possession of property. (Black’s Law Dictionary)

    3. Definition of Sale
    Sale is a transfer of ownership in exchange for a price paid or promised or part paid and part promised.

    4. Rights and Liabilities of Seller

    Following are the rights and liabilities of seller

    (i) Production of documents
    On buyer’s request for examination, seller is bound to produce to buyer all documents of title, which related to immoveable property and which are in seller’s possession or power.

    (ii) Disclose to the buyer material defect
    The is bound to disclose to the buyer any material defect in the property or in the seller’s title thereto of which the seller is and the buyer is not, aware and which the buyer could not with ordinary care discover.

    (iii) Answer to Questions
    Seller is bound to answer to best of his information all relevant questions, which buyer puts to him in respect to immoveable property or title to immoveable property.

    (iv) Rent and Profits
    The seller is entitled to the rents and profits of the property till the ownership thereof passes to the buyer.

    (v) Care of Immoveable Property and Documents
    Between date of contract of sale and delivery of immoveable property, seller is bound to take as much care of the property and all documents of title as an owner of ordinary prudence would take care of such property and documents.

    (vi) Delivery of Possession of Immoveable Property
    Seller is bound to give possession of immoveable property to buyer or some other person according to directions of buyer.

    (vii) To give Possession
    The seller is bound to give on being so required the buyer or such person as he directs, such possession of the property as its nature admits.

    (viii) To pay all public charges
    The seller is bound to pay all public charges and rent accrued due in respect of the property upto date of the sale, the interests on all encumbrances on such property due on such date, and except where the property is sold subject to encumbrances, to discharge all encumbrances on the property then existing.

    (ix) To deliver documents
    The seller is bound, where the whole of the purchase money has been paid to the seller to deliver to the buyer all documents of title relating to the property which are in seller’s possession or power.

    (x) Subsistence of Interest
    Seller is deemed to contract with buyer that interest, which seller professes to transfer to buyer, subsists and that he has power to transfer such interest. And when sale is made by a person in a fiduciary character, he is deemed to contract with buyer that seller has done no act whereby immoveable property is encumbered or whereby he is hindered from transferring it.

    (ix) Payment of Purchase money
    When ownership of immoveable property has been passed to buyer before payment of whole of purchase-money, seller is entitled to a charge upon that property, which is in hands of buyer.

    5. Rights and Liabilities of buyer

    Following are rights and liabilities of buyer

    (i) Right to get benefit of improvement
    The buyer is entitled where the ownership of the property has passed to him, to the benefit of any improvement in or increase in value of the property and to the rents and profits thereof.

    (ii) To disclose any fact about property
    The buyer is bound to disclose to the seller any fact as to the nature or extent of the seller’s interest in the property of which the buyer is aware but of which he has reason to believe that the seller is not aware and which materially increase the value of such interest.

    (iii) Payment or tendering of purchase-money
    Buyer is bound to pay or tender purchase-money to seller or some other person according to directions of seller at time and place of completing sale.

    (iv) Bearing of Loss
    When ownership of immoveable property has been passed to buyer, he is bound to bear any loss, which arises from destruction, injury or decrease in value of the property when such destruction, injury or decrease is not caused by seller.

    (v) Entitlement to improvement and increase in value of immoveable property
    When ownership of immoveable property has been passed to buyer, he is entitled to benefit of any improvement in the property or increase in value of the property.

    (vi) Entitlement of Rents and Profits
    When ownership of immoveable property has been passed to buyer, he is entitled to rents and profits of the property.

    (vii) Entitlement to charge on immoveable property
    Buyer is entitled to charge on immoveable property to extent of seller’s interest in the property, to charge for amount of any purchase-money, which is properly paid by buyer in anticipation of delivery, and to charge for interest on such amount. Such charge is against seller and all persons, who claim under seller. Here condition is that buyer should not have improperly declined to accept delivery of the property.

    Conclusion

    To conclude, it can be stated that rights of seller have not been described in transfer of property act. In fact, rights of seller can be determined through liabilities of buyer.
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