Rights and Responsibilities of Property Seller in India

The Transfer of Property Act is applicable to immovable property in India. As per the norm, the buyer and the seller of the immovable property are bestowed certain rights and responsibilities, to carefully execute the transaction involving the sale or purchase of immovable properties. Following these norms and key points will help to avoid a lot of heartache and drainage of investment for both the buyer and seller. Buying a property can be confusing especially for homeowners, as it comprises many complex steps and the language used in the legal documents is full of jargon and legalese.

Responsibilities of Seller

Make clear of any Material Defect in Property Title

As per the Act, the seller must disclose to the buyer any known material defect in the property or in the seller’s title, that the buyer is not aware of and could not discover with ordinary care. A material defect is an issue within a part or system of a residential property that could negatively impact the value of the concerned property, or that poses an unreasonable risk to the resident, such as a temporarily concealed seepage problem, the unstable foundation of the building, etc.

Provide Complete Documents & Information for Examination

The seller is required to provide all documents of title at the buyer’s request, relating to the property for examination, which is in the seller’s possession or power. Additionally, the seller is required to answer to the best of his information all relevant questions put to him by the buyer related to the property or its title.

Execute proper property transfer documents

The seller is required to execute a proper conveyance of the property at a proper time and place on payment or tender of the consideration for the property. Further, the buyer must take care of the property and all documents of title between the date of the contract for the sale and delivery of the property.

Give Possession to Property

During the execution of conveyance, the buyer shall deliver to the seller or to any person directed by the seller, prior to selling, settle all Dues. 

All accumulated rent and public charges for the property up to the time of the transaction must be paid by the seller. Further, the seller is responsible for paying all interest payable on encumbrances on the property due on a such date unless the property is sold subject to encumbrances.

Seller’s Interest in the Property

When a seller and a buyer enter into a contract for the sale of the property, it is considered that the seller has the authority to transfer the property and that the buyer might actually receive the interest that the seller claims to be transferring.

Transfer of Property Documents

The seller is required to deliver all documents of title to the buyer relating to the property which is in the seller’s possession or power once the full payment for acquisition is received. The seller is entitled to retain the property documents If in case, the seller retains any part of the property. The buyer of a lot of the greatest value is entitled to the original property documents, in case the property is being sold to multiple buyers. 

Property Sellers Rights

The property seller enjoys the following rights as per the Transfer of Property Act:

Rents and Profits

Unless the transfer of property ownership to the buyer, the seller is entitled to the rents and profits of the property.

Charge on Property

The seller has a right to a charge upon the property in the hands of the buyer in case ownership of the property has been transferred to the buyer before receiving the full payment. From the date of the possession of the property by the buyer, the seller has the right to the total payable amount or unpaid part of the consideration and for interest on such amount or part of it. 

Final thoughts 

Apart from these duties and rights of the seller, which are usually reflected in the ‘Sale Agreement’ to enter into with the buyer, it is advised to add a penalty clause in the agreement. According to this clause, any deposit or token money paid to the seller by the buyer is non-refundable in case the buyer fails to pay the remaining amount on time or back out of the deal. 

It is advisable to research and study the duties and rights of a seller so that one is informed and aware of his duties and rights and what is expected from him during the selling process. 

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