If you are considering investing in immovable property, Here is everything you need to know.
Since the commencement of evolution, humans have categorised properties based on their shape, size, and use. The real estate incorporates two categories: immovables and movables. As the name suggests, immovable property can not be easily dragged or moved from one place to another.
Examples of personal property include everything from cash and vehicles to jewellery and watches. Immovable properties cannot be moved or rearranged as a rigid structure, such as a house.
Ownership of Immovable Property
The sales agreement may contain a list of equipment included or excluded from the sale agreement. This listing will clarify who owns each property item after the transfer. Items such as blinds, floating shelves, and satellite dishes are typically bolted to the facility. They are therefore classified as fixed items, while items such as curtains and paintings are considered movable items.
A party may include in an offer to purchase specific tangible property acquired by a buyer. Or, the parties may even enter a separate agreement under which the buyer buys certain tangible assets from the seller. The seller and the buyer should understand what is and is not included in the sales contract.
The land is any specific area of the surface that is not vulnerable to getting submerged by water, a surface column on the surface of the earth, or the earth itself. These are the components defined under the term" land". Of course, objects that are above or below the surface also occur. In addition, immovable property is anything erected or filled by people to permanently characterise a space, such as walls, buildings, fences, etc.
Profits derived from land property
If not seen just as physical land, all the benefits arising from the land are considered immovable property. The Registration Act also covers immovable property, hereditary allowances, fishing and ferry benefits. The immovable property also includes the right to collect profits from the property and rent it, as well as the right to tax certain land markets.
Essential Elements of Immovable Property
Property must get registered if its value exceeds Rs. 100 under the Registration Act, 1908.
The accrual of such property is not comparable to movable property, and the transfer may be completed after registration of such ownership. Immovable property can get supplemented as co-inheritance. Registration fees and stamp duty may be collected upon registration of this property. Immovable property cannot be moved from one place to another.
In a legal transfer, ownership must be registered in the transferee’s name. Registration of immovable property is compulsory under the Indian Registration Act of 1908 if its value exceeds 100 rupees.
Rules and Regulations Under Laws Related to Immovable Property
Immovable Property, as the name suggests, is a property that is permanently fixed to the surface of the earth and cannot be moved. The surface of the earth usually means land or real property. Immovable property, therefore, includes land and materials permanently attached to the land. Various laws define immovable property.
- Property Transfers Act, 1882 – Section 3 of the Act defines immovable property as:
It elaborates that trees, grasses and cultivated crops are not considered real property. This definition under the Transfers of Property Act 1882 is not exhaustive and does not convey the full meaning of the term "real property". Everything movable is not immovable property.
- General Clauses Act, 1897 – To understand the definition of real property, reference is made to the General Clauses Act 1897, which is defined as: – Property includes property, interest arising from property, and anything grounded or permanently attached to anything grounded.
Immovable property is anything permanently affixed to the ground, such as land or any other material other than trees, cultivated crops, or grass, according to the definitions in the Transfer of Ownership Act of 1882 and the General Clauses Act of 1897.
What are the Rights Associated with Immovable Property?
If you are the owner of real estate, you have the following rights: These include:
Right to Collect Rent – The property owner has the legal right to collect rental income by renting or leasing the property in question.
Right to Tax Due – When a property is rented to build on it or use it through other services, the property owner has the right to collect dues.
Ferry Rights – This refers to the right of authorities to keep vessels in waters and transport people and vehicles in return for payment. A ferry can also be an extension of a highway from one side of a body of water to the other.
Right of Way – Certain land is either public or private, and trespassing may be a legal offence.
Right to Fisheries – You may have the right to fish in certain waters or access factories, which is limited to the property owner only.
Doctrine of Estoppel (section 43)
Someone with the wrong intention presents himself as if he is the rightful owner of an existing immovable property and agrees to transfer that property to a specific person in lieu of a consideration; these types of transfers shall get executed with respect to the transferee’s will, whether or not it is related to any interest the transferor may possess in that property within the duration of the contract of transfer.
Section 43 also expounds on the fact that if a property is transferred wrongfully by a transferor establishing himself as the rightful owner, then that person will be commanded to give up that property if future interests arise. The contract is not put under the resignation procedure.
Some of the prerequisites include the following:
- If a representation made was a fraudulent one.
- Such exhibitions have led to the transfer of property.
- If a transferee has acquired a stake in the property.
- The transfer of property is being discussed.
- The honesty of the transferee is predominant.
Doctrine of Fraudulent Transfers (section 53)
If the transferred property misleads the creditor, that transfer will be referred to as fraudulent.
Suppose the transfer of immovable property is done solely to defeat or procrastinate the transferor’s creditors. In that case, they shall not remain in existence against the will of the subdued and hampered creditors.
If a creditor wants to cancel the transactions, they will always have the option to revoke them. It gives the derivation that if a contract is made and creditors do not have an objection, that transaction would be considered a right and vice versa.
A transfer will be considered valid as long as the creditor does not file a suit against it and get an order issued that is against the transfer.
Immovable property is one of the most popular investment modes and is favoured by investors with a long investment horizon. Due to its non-depreciable nature, it can be called an evergreen investment option.
The buyer may consider certain items fixed while the seller considers them their own. To avoid this, both the seller and the buyer should require a detailed list of all personal property that is part of the purchase procedure of the property to be attached to the deed of sale.
What looks like immovable property but isn't?
Logs, grass, and growing crops look like real estate, but they aren’t.
What is a property called in Hindi?
The property is called ‘Achal Sampatti’ in Hindi.
What is an Annual Assets Statement?
All government personnel holding Group A and Group B posts are required by Regulation 18(1)(ii) of the CCS (Code of Conduct) of 1964 to file an annual tax return that includes comprehensive information about all of their real estate interests. They could inherit by taking out a mortgage or lease, either in their name or that of a relative.
What is a TDS for real estate for sale?
Any person who buys real estate property except agricultural land for Rs 50 lac is obligated to subtract 1% tax from the price paid to the seller (except agricultural land). The Finance Act of 2013 added this additional regulation to the Income Tax Act’s section 194IA.
What is the objective of real estate NOC applications for an immovable property?
To secure and register with the appropriate authorities, you must get the essential permits to guarantee ownership confirmation. The authorities give a No-objection Certificate (NOC) for immovable property.
What exactly qualifies as immovable property?
The immovable property covers land, inherited rights, structures, lights, fisheries, ferries, and any other benefits anticipated to flow from it. Objects that are attached to the ground or anything else that is fastened to the earth are also immovable property.