What are the Rights and Liabilities of a Seller of An Immovable Property?

By Kopal Chaturvedi 9 Minutes Read

Section 55 in The Transfer of Property Act, 1882^[1] mentions the rights and liabilities of a seller of the immovable property. In absence of the existence of any contrary contract, the following provisions shall be applied:

Duties of a Seller^[2]:

1. The seller shall always disclose to the buyer of any material about the defect present in the property whichsoever he/she is selling or in the seller’s title, where the seller is aware of such defect but the buyer is not. He must also disclose any such default if the buyer cannot discover it with ordinary care, it is the basic part in regard to the duty of the seller. 
2. The seller is bound to produce all the relevant documents related to the property which are in his possession, for examination to the buyer in case he requests for the same and that too disclose all the relevant documents which are in any relation related to the document. 
3. He must also answer all the relevant questions which are put to him by the buyer related to the property or the title. He must give all the details to the best of his knowledge which he himself or under any scenario deems it necessary for the buyer to be aware of^[3].
4. He must bear all the costs on payment or tender in respect of a proper conveyance of the property whenever the buyer tenders it to him for implementation at the correct time and place.
5. He must take due and proper care of the property and documents in his possession during the period lying between the date of the contract of sale and the delivery of the property as it is the mandatory obligation of every seller to take proper care of the documents as well as the property before handing over the documents to the buyer.
6. The seller must give the possession of his property either to the buyer or to any such person as desired by the buyer and before handing the possession to any person there should be due care that the person to whom the possession is provided is the only person who the buyer has assigned the duty of taking the possession of the property sold^[4]. 
7. He is also liable to pay all public charges and rent pending up to the date of the sale. He shall also attach the interest on all the encumbrances of such property.
8. Once the property is sold, the seller shall be deemed to have agreed with a buyer through a contract that the interest which the seller professes to transfer to the buyer subsists and that he has the power to transfer the same but in situations where the sale is made by a person in a fiduciary character, he shall be deemed to contract with the buyer that the seller has done no act whereby the property is encumbered or whereby he is hindered from transferring it. 
9. In cases where the whole of the purchase-money is already paid to the seller, he is bound to give the buyer all relevant documents of title relating to the property which are in his possession or power^[5]. But if the seller is retaining a certain part of the property, he is allowed to retain all the documents related to the same. In fact, if such property is sold to multiple buyers, whoever has the maximum value of share must keep the documents. These buyers and sellers are bound to produce the concerned documents to the buyer who requests so. Whoever has the possession of such documents, he must keep the said documents safe, uncancelled and undefaced, unless prevented from doing so by fire or other inevitable accident.

Rights of a Seller:

1. The seller is entitled to all the rents and profits of the property before the ownership of such property passes to the buyer.
2. In case where the ownership of the property has passed to the buyer before payment of the whole of the purchase-money, the seller is entitled to a charge upon the property in the hands of the buyer, for the amount of the purchase-money, or any part thereof remaining unpaid, and for interest on such amount or part. The charge begins from the date on which possession has been delivered^[6].
3. The seller has a right to know the facts related to his property as far as his interest in the property is concerned. In case the buyer knows of some facts related to the property which materially increases the value of the interest of which the seller is not aware, he must reveal the same facts to the seller.
4. The seller is entitled to get, at the time and place of completing the sale, the purchase-money. Where the property is sold free from encumbrances, the buyer can keep some amount from the purchase money for the payment of any future encumbrances that might exist on the date of sale. 
5. 5.    The seller will not be liable to pay for any losses which might occur due to any loss arising from the destruction, injury, or decrease in value of the property after the property is transferred. These losses must not be caused by the seller himself.
6. Where the ownership of the property has passed to the buyer, the seller becomes free from any payment for public charges, the rent which may become payable in respect of the property, the principal money due on any encumbrances, and the interest thereon afterward accruing due.

These are some basic rights and duties of the seller as well as the buyer and they can be considered as an obligation for both the buyer as well as the seller and without the fulfilment of these duties and obligations a sale of any property can’t take place in the usual scenario.

[1] Source Link.
[2]Source Link.
[3] Source Link.
[4] Source Link.
[5] Source Link.
[6] Basalingava Revanshiddappa … vs Chinnava Karibasappa (1932) 34 BOMLR 427

Kopal Chaturvedi