REAL ESTATE MANAGEMENT

BY MRS JYOTSNA CHAUBAL DESHPANDE CHARTERED ENGINEER, CHARTERED PLANNER. CHARTERED VALUER. FORMER JOINT DIRACTOR OF TOWN PLANNING MAHARASHTRA STATE.

REAL ESTATE

PROPERTY
DICTIONARY MEANING THINGS OWNED POSSESSION ALL USEFUL THINGS OWNED BY MAN CLASSIFIED AS WEALTH PROPERTY- INTANGIBLE CONCEPT BEING RIGHT TO POSSESS WEALTH PROPERTY- LEGAL RIGHT THAT EXPRESSES THE RELATIONSHIP BETWEEN OWNERS AND THEIR POSSESSIONS

PROPERTY
DEFINITION CONTINUOUS, EVER LASTING USE, CONTROL AND DISPOSITION EXERCISABLE BY OWNER OVER THING OR OBJECT. PROPERTY SIGNIFIES SUM TOTAL OF ALL RIGHTS AND POWERS INCIDENT TO OWNERSHIP.

REALTY
LAND ORIGINALLY PROVIDED BY NATURE NO LONGER EXISTS ANYWHERE ON EARTH. ALL LAND DIRECTLY ( BY CONSTRUCTION IF IMPROVEMENTS ON SITE ) OR INDIRECTLY (BY IMPROVEMENTS RELATED TO SITE) MODIFIED BY MAN. LAND TOGETHER WITH IMPROVEMENTS, IS DESIGNATED AS REALTY REALTY INCLUDES LAND AND BUILDINGS, AS ALSO ANYTHING PERMANENTLY AFFIXED TO LAND I.E. FIXTURES.

ESTATE
THE KIND OF ESTATE MEASURES THE RIGHTS AND INTERESTS AN OWNER HAS IN REAL PROPERTY IN TERMS OF: DURATION TIME GEOGRAHICAL EXTENT BREADTH, DEPTH AND HEIGHT DEGREE SOLE OR CO-OWNERSHIP CHARACTER LEASEHOLD, EASEMENTS TERM ESTATE HAS BROADER MEANING THAN TERM TITLE.

CLASSIFICATION OF REAL ESTATE

PROPERTY
TYPES-1) CORPOREAL OR TANGIBLE 2) INCORPOREAL OR INTANGIBLE TANGIBLEOWNERSHIP IN MATERIAL THINGS WHICH CAN BE PHYSIALLY TOUCHED OR FELT, E.G. LAND,FURNITURE, JEWELLARY ETC. INTANGIBLEOWNERSHIP OF NONMATERIAL THINGS WHICH CANNOT BE POSSESSED IN PHYSICAL SENSE E.G. COPYRIGHTS, LEASES, GOODWILL, EASEMENT RIGHTS ETC

PROPERTY
CUSTOMARY CLASSIFICATION 1) MOVABLE. 2) IMMOVABLE. MOVABLEFURNITURE , PLANT AND MACHINARY, STOCKS, SHARES, DEBENTURES, INTELLECTUAL PROPERTY, GEMS AND JEWELLARY, CURRENCY, ARTS AND ARTIFACTS ETC. IMMOVABLELAND AND BUILDINGS ETC.

IMMOVABLE PROPERTY
DEFINITION [AS PER SECTION 3(26) OF GENERAL CLAUSES ACT] IMMOVABLE PROPERTY SHALL INCLUDE LAND, BENEFITS TO ARISE OUT OF LAND AND THINGS ATTACHED TO THE EARTH OR PERMANANTLY FASTENED TO ANYTHING ATTACHED TO THE EARTH. ATTACHED TO EARTH MEANS1. ROOTED IN EARTH AS TREES 2. IMBEDDED IN EARTH AS WALLS, BUIDG. 3.ATTACHED TO EMBEDDED FOR PERMANAT BENEFICIALENJOYMENT.

IMMOVABLE PROPERTY (COND)

AS PER TRANSFER OF PROPERTY ACT NO POSSITIVE DEFINITION STATES THAT IMMOVABLE PROPRTY DOES NOT INCLUDE STANDING TIMBER GROWING CROPS AND GRASS. AS PER JUDICIAL DECISIONS IMMOVABILITY IS INCAPACITY OF A THING OF SUFFERING ALTERATION IN RELATION TO PLACE, WITHOUT INJURY OR DAMAGING ITS SURROUNDINGS

IMMOVABLE PROPERTY ( CONTD)

CRITERIA THE LINE OF DISTINCTION BETWEEN MOVABLE AND IMMOVAVLE IS THIN. THE INTENTION OF PARTIES KEY THE MODE OF ANNEXATION IMPORTANT IF PLANT OR FIXTURE CANNOT BE REMOVED WITHOUT GREAT DAMAGE INTENDED TO BE ANNEXED IN PERPETUITY.

LAND OWNERSHIP
LAND IS ORIGINAL AND BASIC FACTOR OF PRODUCTION. LAND AS NATURE PROVIDED CONSISTS OF THE EARTHS CRUST. LEGALLY, POSSESSION OF PART OF EARTHS CRUST INCLUDES RIGHTS TO CONTROL MINERALS, GAS AND OIL BELOW THE EARTHS SURFACE AS WELL AS AIR SPACE ABOVE THE GROUND. SHAPEINVERTED PYRAMID.

PROPERTY OWNERSHIP
OWNERSHIP OF REALTY CLASSIFIED AS PROPERTY. TWO TYPES. PERSONAL PROPERTY OWNERSHIP IS FOR A LIMITED TERM OF YEARS. REAL PROPERTY OWNERSHIP OF REALTY EXTENDS FOR A LIFETIME. LESSEE POSSESSES PERSONAL PROPRETY IN REALTY, WHERE AS LESSOR OWNS REAL PROPERTY. REAL PROPERTY CONSISTS OF LAND AND OBJECTS PERMANENTLY ATTACHED TO GROUND.

ESTATES IN PROPERTY
FREEHOLD OR FEE SIMPLE HIGHEST FORM OF RIGHT WITH REGARD TO REAL ESTATE. OWNER CAN: USE PROPERTY IN ANY MANNER ABUSE PROPERTY SO LONG AS IT DOES NOT RESULT IN A NUISANCE. ENJOY PROPERTY BY EXCLUSIVE POSSESSION DERIVE BENEFITS, INCOME OR PROFIT FROM PROPERTY. DISPOSE THE PROPERTY BY SALE, GIFT OR WILL.

LESSER ESTATES IN PROPERTY

FREEHOLDERS RIGHT SUPERIOR TO ALL OTHER RIGHTS. ESTATES IN LAND OF LESSER QUANTITY THAN WHOLE OWNERSHIP. ESTATE THAT BELONGS TO A PERSON ONLY UNDER CERTAIN TERMS AND CONDITIONS OR REVERT IN CASE OF CERTAIN EVENTS, ARE LESS THAN ABSOLUTE.

LEASE OR ESTATE FOR YEARS

LEASE : FREEHOLD ESTATE GIVEN BY FREEHOLDER FOR USE FOR A FIXED DURATION UNDER CERTAIN TERMS AND CONDITIONS. LESSOR: FREEHOLDER OR LANDLORD. LESSEE : PERSON ACCEPTING LEASE. RENT : LESSEE PAYS TO LESSOR RENT OR COMPENSATION FOR USE OF LAND LEASE DOCUMENT : WRITTEN PROMISE / COMMITMENT TO PERFORM CERTAIN DUTIES E.G. PAY TAXES, MAINTAIN PROPERTY AND RETURN IN GOOD CONDITION ON TERMINATION OF LEASE.

SUBLEASE
LESSEE MAY TRANSFER HIS INTEREST FOR A SHORTER PERIOD THAN THE REMAINING PERIOD OF LEASE, WITH APPROVAL OF LESSOR AND IN CONFORMITY WITH THE LEASE TERMS . SUB LESSEE : THE TRANSFEREE HEAD LESSEE : THE MAIN LESSEE. HEAD LESSEE COLLECTS THE PROFIT RENT.

MORTGAGE
ANOTHER PROPERTY INTREST IS CREATED WHEN FREEHOLDER MORTGAGES HIS PROPERTY I.E. PLEDGES IT AS SECURITY AGAINST LOAN. MORTGAGOR : OWNER OF PROPERTY MORTGAGEE : LENDER OF LOAN FAILURE TO RETURN PRINCIPAL OR INTEREST AUTHORISES MORTGAGEE TO SELL THE MORTGAGED PROPERTY TO LIQUIDATE THE DEBT. EQUITY : MORTGAGORS PROPERTY RIGHTS

MORTGAGE
THE MOERTGAGOR AND THE MORTGAGEE HAVE BECOME THE DIVERSE OWNERS IN A SINGLE PROPERTY. THEIR INTEREST ARE COMPLEMENTARY.

EASEMENTS
EASEMENTS ARE MEANS BY WHICH ONE PARTY MAY GAIN THE USE OF SOMEONE ELSES LAND WITHOUT OBTAING THE TITLE. OWNER MAY USE ADJACENT LAND OWNED BY HIS NEIGHBOUR ON A TEMPORARY OR PERMANENT BASIS

EASEMENTS (CONTD)
DEFINITION: A RIGHT GRANTED BY A LANDOWNER TO SOMEONE FOR THE NONEXCLUSIVE USE OF A PORTION OF THE LAND FOR A SPECIFIC PURPOSE.

EASEMENTS (CONTD)
EASEMENT RIGHTS ARE FREELY BOUGHT OR SOLD IN THE OPEN MARKET. EASEMENTS: RIGHT OF PASSAGE OR ACCESS THROUGH PRIVATE ALLEYWAYS RIGHT OF USE OF AIRSPACE OVER A PROPERTY

OWNERSHIP
OWNERSHIP IS CONGLOMERATION OF LEGAL RIGHTS. OWNERSHIP DENOTES THE LEGAL RELATION BETWEEN A PERSON AND AN OBJECT. IT IS THE SUM TOTAL OF RIGHTS A PERSON HAS OVER AN OBJECT.

OWNERSHIP (CONTD)
RIGHTS: 1) THE RIGHT TO POSSESS AN OBJECT (THOUGH HE MAY NOT HAVE THE PHYSICAL POSSESSION) 2) THE RIGHT TO USE AND ENJOY THE THING OWNED 3) THE RIGHT TO CONSUME, DESTROY OR ALIENATE THE THINGS OWNED. THESE ARE KNOWN AS THE LIBERTIES OF OWNERSHIP AND POWER.

OWNERSHIP (CONTD)
4) THE RIGHT TO ENJOY A PROPERTY INDEFINATELY. THUS HOUSE PROPERTY REMAINS UNDER THE OWNERSHIP OF THE LANDLORD UNTIL SOLD. 5) THE RIGHT TO RETAIN RESIDUAL RIGHT OVER A PROPERTY. WHEN PROPERTY LET ON LEASE, OWNER RETAINS RIGHT OF REVERSION I.E. TO RECEIVE BACK THE PROPERTY ON EXPIRY OF LEASE.

POSSESSION
WORD PROPERTY IMPLIES BELONGING OR POSSESSION. CONCEPT OF POSSESSION IS AN ABSTRACT NOTION. IT IS NOT PURELY LEGAL CONCEPT. POSSESSION IS A FACTUAL CONCEPT. IT DENOTES BOTH PHYSICAL CONTROL AS WELL AS HAVING PHYSICAL CUSTODY OF THE THING. PERSON HAVING POSSESSION ALSO HAS POWER TO EXCLUDE ALL OTHERS FROM INTERFERING WITH HIS POSSESSION.

TYPES OF OWNERSHIP
OWNERSHIP OF A PROPERTY NEED NOT BE ALWAYS EXCLUSIVE. IT COULD BE SHARED ONE. PROPERTY MAY HAVE SEVERAL OWNERS. OWNERSHIP IS BUNDLE OF RIGHTS IN A PROPERTY. THE BUNDLE OF RIGHTS COULD BE OF DIVERSE NATURE DEPENDING ON THE PROPERTY IN QUESTION AND MUST BE CLEARLY DEFINED.

GOVERNMENT LIMITATIONS

GOVERNMENT LIMITATIONS
THEORETICALLY FREEHOLDESRS RIGHT IS ABSOLUTE. HOWEVER, EVEN THE FREEHOLDER IS RESTRICTED FROM ABSOLUTE ENJOYMENT. Government limitations on ownership imposed for welfare of all citizen
1. 2. 3. 4. Police power - Restrict use of property Eminent Domain Compulsory Acquisition Right of Taxation Escheat Assume ownership of unowned property

POLICE POWER
SOVEREIGN POWER INHERENT IN THE GOVERNMENT, DELEGATED TO LOCAL AUTHORITY/ GOVERNING AGENCY TO RESTRICT THE USE, OCCUPATION AND RIGHTS IN PROPERTY TO PROTECT WELLBEING WELFARE, MORALS OR SAFETY -- OF CITIZEN. WITHOUT ANY COMPENSATION. RESOURCE TAKEN FOR CITY PLANNING, ZONING AND BUILDING CONTROL. REGULATIONS OF BUILDING, FIRE AND HEALTH DEPARTMENTLIMITATIONS UPON USE OF LAND.

EMINENT DOMAIN
SOVEREIGN POWER INHERENT IN THE GOVERNMENT TO TAKE ANY LAND, BY DUE PROCESS OF LAW. TWO REQUIREMENTS TO BE MET: 1) USE MUST BE PUBLIC 2) JUST COMPENSATON MUST BE PAID. USED TO OBTAIN LAND FOR STREETS, PARKS, PUBLIC BUILDINGS, PUBLIC/SOCIAL PURPOSES

RIGHT OF TAXATION
TAXES LEVIED BY GOVERNMENT FOR ITS SUPPORT AND FOR MAINTENANCE OF ITS BRANCHES THAT PROTECT AND BENEFIT CITIZEN. FAIR THAT CITIZEN PAY FOR PROTECTION AND BENEFITS RECEIVED. LAND, DUE TO ITS PERMANENCE AND ACCESSIBILITY CONVENIENT ARTICLE TO TAX. BASIS FOR LOCAL TAXATION. TAXES ARE A COST OF LAND USE AND OPERATIONS.

ESCHEAT
REVERSION OR ESCHEAT OF LAND TO THE STATE. WHEN OWNER DIES, LEAVING NO HEIRS OR WILL TO DISPOSE THE LAND. LOGICAL SOLUTION SINCE LAND CANNOT BECOME UNOWNED.

OTHER LIMITATIONS
PRIVATE OR CONTRACTUAL LIMITATIONS ON OWNERSHIP USUALLY CONTAINED IN DEEDS EASEMENTS AND LEASES OR MORTGAGE INSTRUMENTS. FREEHOLDER IS VESTED WITH AND HAS CONTROL OVER BUNDLE OF RIGHTS HE MAY GRANT LEASE, CREATE MORTGAGE, INDUCT LICENCE, IMPOSE CHARGE & SO ON.

STATUTORY PROVISIONS

LAND USE CONTROLS

UNDER MAHARASHTRA REGIONAL AND TOWN PLANNING ACT,1966.

CONTENTS OF DEVELOPMENT PLAN

SECTION 22- 1. ZONINGRESIDENTIAL/COMMERCIAL INDUSTRIAL/RECREATIONAL 2. RESERVATION OF SITES FOR PUBLIC PURPOSES --SCHOOLS, COLLEGES, HOSPITALS, LIBRARIES,PARKS AND GARDENS ETC. 3. ROAD NETWORK 4. DEVELOPMENT CONTROL RULES

ZONING RESTRICTIVE PLANNING

RESIDENTIAL ZONE INDUSTRIAL USE IS NOT PERMITTED LIMITED COMMERCIAL USE PERMITTED NO DEVELOPMENT/GREEN ZONE ONLY RECEATIONAL USE PERMITTED THROUGH ZONING-1. ADVANTAGES OF CONGLOMERATION OF INDUSTRIES IS OBTAINED. 2. MIXING OF NON-CONFORMING USERS PREVENTED

DEVELOPMENT CONTROL RESTRICTIVE PLANNING

DEVELOPMENT PERMISSION NECESSARY BEFORE CARRYING OUT ANY DEVELOPMENT. PROPOSALS OF DEVELOPMENT PLAN SHPULD BE TAKEN INTO ACCOUNT WHILE GRANTING DEVELOPMENT PERMISSION. PROVISION OF APPEAL AGAINST REFUSAL OR CONDITIONAL GRANT OF DEVELOPMENT PERMISSION

DEVELOPMENT CONTROL RULES

PART AND PARCEL OF DEVELOPMENT PLAN. FROM PUBLIC HEALTH AND SAFETY POINT OF VIEW. FOR CONTROLLING AND GUIDING THE DEVELOPMENT TO ACHIEVE THE GOALS AND OBJECTIVES OF THE DEVELOPMENT PLAN. STANDARDIZATION OF DEVELOPMENT CONTROL RULES FOR A, B, C CLASS MUNICIPAL COUNCILS AND MUNICIPAL CORPORATIONS, KEEPING IN VIEW THE NATIONAL BUILDING CODE.

TRANSFER OF PROPERTY

UNDER TRANSFER OF PROPERTY ACT, 1882.

TRANSFER OF PROPERTY ACT

Ownership is a conglomeration of legal rights and ownership denotes the legal relation between the owner and the real property and is thus the sum total of his rights thereon. It therefore, becomes necessary to learn the legal provisions for Asset Acquisition or for Asset Disposition for that matter. The Transfer of Property Act,1882 deals with the principles behind the transfer of all properties, movable or immovable.

CONSIDERATION
Section 4 of the Transfer of Property Act states that the chapters and sections of the Act which relate to contracts shall be considered to be a part of the Indian Contract Act, 1872. Likewise, certain sections of this Act dealing with registration of transactions should be considered supplemental to the Indian Registration Act, 1908.

SECTION 5
Section 5 defines transfer of property as a transaction whereby the possession or ownership of a property undergoes a change by the acts of the parties to the said transaction. Examples of such a change of ownership or possession may be in the shape of a sale (where the ownership is totally effected), a mortgage (where possession of the property is used as a security for payment of a loan) or a lease (where possession of a property is enjoyed on payment of a rent) among others.

TRANSFER OF INTEREST
Ownership, as seen earlier, consists of a bundle of rights. The rights which so make up absolute ownership (e.g., right of possession or right of engagement) are called interests in property and a transfer of property is either a transfer of absolute ownership or a transfer of one of those interests.

SECTION 6
Transferability is the general rule in the law of property and the right to property includes the right to transfer the property to another person. Subject to this general principle, the Transfer of Property Act lists certain properties which cannot be transferred. Section 6 of the Act states that excepting these and certain other properties whose transfers are restricted by other laws, property of any kind may be transferred.

SECTION 7
Section 7 deals with competency to be a transferor. It states that a transferor must (a) be competent to contract, and (b) have title to the property, or authority to transfer the property if the property is not his own. In this connection, reference is made to Sec. 11 of the Indian Contract Act, 1872 which specifies the competency to contract and states that a person is competent to contract if he is (a) of the age of majority according to the law to which he is subject, (b) of sound mind, and (c) not otherwise disqualified from contracting.

POWER TO CONTRACT
It is thus clear that the power to transfer depends on the power to contract, as without a contract to give and take, there can be no transfer at all. Further, it is also a well established principle of law that a minor lacks the competence to contract and consequently the competence to transfer, and what is more, a minor does not even have the competency to authorize another to enter into a contract on his behalf. Although a minor cannot be a transferor, a transfer made to a minor is a valid one. In other words, a minor lacks the competence to be the transferor but he possesses the competence to be a transferee.

SECTION 8
Section 8 of the Act confers stability on title and removes speculations in a transfer. It elaborates the operation of a transfer and states that unless a different intention is expressed or implied, a transfer of a property passes immediately to the transferee.

SECTION 8 (CONTD)
Section 8 also elaborates the legal incidents involved in the transfer. Some of these are: 1. Where the property is a land- The easements annexed thereto, the rents and profits accruing after the transfer and all things attached to the earth. 2. Where the property is machinery attached to the earth- All movable parts thereof. 3. Where the property is a house- The easements annexed to it, the rent accruing after the transfer as well as locks, keys, doors, windows and all other things provided for permanent use.

SALE OF IMMOVABLE PROPERTY

Section 54 defines a sale as a transfer of ownership in exchange for a price paid or promised or part paid and part-promised. In the case of a tangible immovable property of the value of Rs 100 or more, the sale can be made only by a registered instrument. In the case of a tangible immovable property of a value less than Rs 100, sale is effected either by a registered instrument or by the delivery of the property, that is, when the seller places or directs the buyer in possession of this property.

CONTRACT FOR SALE

A contract for the sale of immovable property is a contract that a sale of such property shall take place on terms settled by the parties. A contract for sale does not create any interest or charge on such property.

MORTGAGES AND CHARGES OF IMMOVABLE PROPERTY

This comprises Section 58 to 104 of the Act. Section 58 defines mortgage and associated terms. Mortgage is defined as the transfer of an interest in a specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, for an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability. The 'Transferor' is called the mortgagor. The 'Transferee is called the mortgagee. The principal money and interest is the mortgage money. The instrument by which the mortgage is created is called the mortgage-deed.

FEATURES OF A LEASE
WHAT IS A LEASE A lease of an immovable property is a transfer of a right to enjoy such property for a certain time (express or implied), or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service, or any other thing of value, to be rendered periodically, or on specified occasions, to the transferor by the transferee, who accepts the transfer on such terms.

FEATURES OF A LEASE (CONTD)

The price is called the premium. The money, share, service or other thing to be rendered periodically is called the rent. The transferor is the lessor. The transferee is the lessee. The lease of immovable property is governed by Sections 105 to 117 of the Transfer of Property Act.

ESSENTIAL ELEMENTS OF LEASE

Lessor He / She must be a person competent to enter into a contract and must have authority and title to do so. Lessee He / She must be a person competent to enter into a contract on the date of execution of the lease. Whereas a sale or a mortgage to a minor is valid, a lease to a minor is void, as the lease is to be executed both by the lessor and the lessee.

ESSENTIAL ELEMENTS OF LEASE

Subject matter The subject matter of the lease must be a property and its description must be fully given in the lease deed. Duration A lease must be made for a certain time, express or implied, or -in perpetuity. It may be noted here that under English law, a lease into perpetuity is unknown. In India, however, such leases may be created by an express or a presumed grant.

ESSENTIAL ELEMENTS OF LEASE

Consideration Consideration may be premium plus rent, or premium alone or rent alone. Premium is the price paid or promised in consideration of a transfer by way of lease. Any payment by the lessee that is part of the consideration of the lessee is rent.

 Agreement There must be an agreement of lease between lessor and lessee. At the same time, merely an agreement to lease does not establish a legal relationship between lessor and lessee. The term demise is used in English law but is not defined in the Transfer of Property Act. The test for determining whether an agreement to lease effects a present demise is not whether the transfer is to operate immediately but whether the right to enjoy the property is actually transferred or not. An agreement to lease creating a present demise required writing and registration without which it will not be admissible in evidence. The lessee must accept the lease.

FEATURES OF A LEASE (CONTD)

FEATURES OF A LEASE
Ordinarily, a lease is a grant of property for use, for a specified time by lessor to lessee, the consideration being, usually, the payment of premium and / or rent. In any case, certain rights are conferred on the lessee by the lessor. The essential features of a lease are as follows: 1. In a lease, there is a transfer of an interest in the immovable property. For determining whether an interest in land is transferred or not, the main test is the delivery of 'exclusive possession'. If the exclusive possession is not with the grantee, and the subject-matter is in the control and possession of the grantor, then it is not a lease.

FEATURES OF A LEASE (CONTD)

2. If during the continuance of the lease, any accretion is made to the property, such accretion shall be deemed to be comprised in the lease. 3. A lease is transferable and heritable. 4. A lease can be terminated by forfeiture. 5. A lease can be terminated only in one of the eight different ways enumerated in Section 111 of the Transfer of Property Act.

FEATURES OF A LEASE (CONTD)

6. The lessee's interest is not liable to be defeated by a subsequent transfer of the leased property (Section 109 of Transfer of Property Act). 7. A lessee is entitled to maintain a suit in his own name, against trespassers and strangers. 8. Death of either party does not affect a lease.

HOW A LEASE CAN BE MADE

A lease of an immovable property can be made, from year to year or for any term exceeding one year or reserving a yearly rent, only by a registered instrument. In any other case, it can be made either by a registered instrument or by an oral agreement accompanied by delivery of possession. In the case of a lease by a registered instrument, or by two or more instruments, the instrument or each of the instruments must be executed by both the lessor and lessee (Section 107 of the Transfer-of Property Act).

DURATION AND TERMINATION OF LEASE

A lease of an immovable property for agricultural or manufacturing purpose is deemed to be a lease from year to year terminable on the part of either lessor or lessee by giving six months' notice expiring with the end of a year of the tenancy. For any other purpose, a lease of an immovable property is deemed to be from month to month and terminable on the part of either lessor or lessee by giving a 15 days' notice and expires at the end of the month of the tenancy.

DURATION AND TERMINATION OF LEASE

The aforesaid statutory presumptions regarding duration arise only when there is no agreement between the parties, or local usage is to the contrary (Section 106 of the Transfer of Property Act). Every notice under Section 106 must be in writing, signed by or on behalf of the persons giving it. It must either be sent by post to the party who is intended to be bound by it or be tendered or delivered personally to such party, or to one of his family or servants at his residence, or (if such tender or delivery is not practicable) affixed to a conspicuous part of the property.

DURATION AND TERMINATION OF LEASE

Notice to quit is deemed to have been waived, when, with the express or implied consent of the person to whom it is given, the person giving it does an act showing an intention to treat the lease as subsisting (Section 113).

COMPUTATION OF LEASE
This is governed by Section 110 of the Transfer of Property Act. 1. Where the time limited by a lease of immovable property is expressed as commencing from a particular day, in computing that time, such day is to be excluded. Where no day of commencement" is named, the time so limited begins from the making of the lease.

COMPUTATION OF LEASE
2. Where the time limited by a lease is a year or a number of years, in the absence of an express agreement to the contrary, the lease shall last during the whole anniversary of the day from which such time commences. 3. Where the time limited by a lease is expressed to be terminable before its expiration, and the lease omits to mention at whose option it is so terminable, the lessee and not the lessor shall have such option.

REGISTRATION

UNDER BOMBAY STAMP ACT, 1958.

TAX ON TRANSFER OF PROPERTY

The Bombay Stamp Act, 1958, is a fiscal measure enacted by the Government of Maharashtra to secure revenue for the state on certain cases of instruments. It extends to the whole State. An actual Transfer of Property is necessary to regard the document as conveyance.

INSTRUMENT
Instrument includes every document by which any right or liability is, or purports to be, created, transferred,limited, extended, extinguished or recorded but does not include a bill of exchange, cheque, promissory note, transfer of share debenture, proxy and receipt.

CONVEYANCE
Conveyance includes 1. A conveyance on sale, 2. Every instrument, 3. Every decree or final order of any court, 4. Every order made by High Court u/s 394 of Companies Act, 1956, by which property or any other estate or interest is transferred.

AMENDMENT
Section 31, sub-section (3), of the Bombay Stamp Act, 1958: He shall, for the purpose of assessing the stamp duty, determine the true market value of such property as laid down in the Bombay Stamp (Determination of the True Market Value of Property) Rules, 1995.

MARKET VALUE
The concept of Market Value was first time introduced in the Act, by amending Act 16 0f 1979. Prior to the amendment, the stamp duty was chargeable on the amount set forth in the instrument. Thus the basis of determining value of the property for charging stamp duty was shifted from consideration set forth in the instrument to the Market Value.

REAL ESTATE APPRAISAL

DEFINITION OF MARKET VALUE

THE MARKET VALUE OF A PARTICULAR INTEREST IN LANDED PROPERTY MAY BE DEFINED AS THE AMOUNT OF MONEY OFFERED BY A WILLING PURCHASER TO A WILLING SELLER OF THAT INTEREST,IN THE OPEN MARKET, WHERE THERE IS COMPETITION, AND BOTH PARTIES ARE BEING ACTUATED BY ECONOMIC CONSIDERATIONS, AND WHERE THERE IS NO UNDUE PRESSURE ON EITHER OF THEM.

VALUATION OF IMMOVABLE PROPERTIES

PROPERTY: - Right to own and possess and to put to Legal and possible uses. - Land together with building improvements plus anything permanently affixed to it. IMMOVABLE: Land + Anything attached to it + Anything embedded in it. VALUATION: For highest, best and most profitable legal use.

COST AND PRICE

COST Expenditure on inputs. PRICE Expenditure on input + Profit.

VALUE
Result of Interaction of Demand and supply. Value is not intrinsic in Object. People create Value. Individual / Subjective Value. Market / Objective Value.

CHARACTERISTICS OF VALUE
FUNDAMENTAL PRINCIPLE OF ECONOMICS IS THAT,FOR AN OBJECT TO HAVE VALUE. IT MUST SATISFY FOLLOWING BASIC CONDITIONS UTILITY The power to render a service or fill a need. SCARCITY in relation to supply and demand and possible alternative uses. DEMAND Need with monetary power to fill demand. TRANSFERABILITY Rights of possession and control of ownership of property.

VALUATION
It is an art or science of estimating the value for a specific purpose of a particular interest in property at a particular moment in time taking into account all features of the property and considering all factors of the market.

PURPOSE OF VALUATION
I) PURCHASE FOR INVESTMENT OR FOR OCCUPATION. II) SALE/TRANSFER OF THE PROPERTY. III) MORTGAGE AND OTHER SECURITY. IV) RENT FIXATION. V) LAND ACQUISITION. VI) BETTERMENT CHARGES. VII) AUCTION BIDS. VIII) PROBATE. IX) SPECULATION. X) TAXATION. XI) INSURANCE. XII) PARTITION. XIII) COURT FEES & STAMP DUTY READY RECKONER. XIV) RATABLE VALUE. XV) ARBITRATION. XVI) LEASES INTEREST/LESSEES INTEREST. XVII) MERGER AND ACQUISITION OF INDUSTRIAL UNITS. REVALUATION OF ASSETS FOR MARKET CAPITALIZATION.

INTERESTS IN REAL ESTATE

INTERESTS IN LANDED PROPERTY

1] FREEHOLD INTEREST. 2] LEASEHOLD INTEREST. 3] SUBLEASEHOLD INTEREST. 4] LIFE INTEREST. 6] RIGHTS OF OCCUPANCY. 7] RIGHT OF WAY. 8] RIGHT OF LIGHT AND VENTILATION.

PARTICULAR MOMENT IN TIME

The valuation of a property is related to the date of valuation and is different at different moments in time.

FEATURES OF THE PROPERTY

Location Situation User Residential/Industrial/Commercial Size Small/Gross Shape Regular/Irregular F.S.I. permissible Road Frontage Small/Large, Important Road/Local Road

FACTORS AFFECTING REAL ESTATE MARKET

FACTORS AFFECTING REAL ESTATE MARKET

Political, Legal, Social, Urban and Economic forces influence the real estate market.

TYPES OF LANDED PROPERTY

1] RESIDENTIAL. a) HOUSES OF VARIOUS TYPES. b) FLATS AND TENEMENTS. 2] INDUSTRIAL. I) FACTORIES. II) WAREHOUSES AND GODOWNS. 3] COMMERCIAL. a) SHOPS. b) OFFICES. 4] AGRICULTURAL.

METHODS OF VALUATION
1] THE DIRECT COMPARISON OR COMPARATIVE METHOD. 2] THE CONTRACTORS METHOD. 3] THE PROFITS OR ACCOUNTS METHOD. 4] THE RESIDUAL METHOD. 5] THE INVESTMENT METHOD.

COMPARATIVE METHOD
FIND OUT CONSIDERATION ACTUALLY PAID FOR OTHER SIMILAR PROPERTIES IN THE SAME LOCALITY AND THREE TO FIVE YEARS PRIOR TO THE DATE OF VALUATION.

FACTORS TO BE TAKEN INTO CONSIDERATION: 1] LOCATION OF PROPERTY. 2] SITUATION. 3] LEVEL OF AMENITIES & FACILITIES. 4] USER OF PROPERTY. 5] AGE OF PROPERTY. 6] CONDITION OF PROPERTY. 7] FACILITES AVAILABLE IN THE PROPERTY. 8] SIZE (FLOOR AREA) OF PROPERTY.

COMPARATIVE METHOD
The Evidence The evidence
Should be based on Transactions of similar Transactions of similar properties properties IN the same area In the same area

The Market The Market

Comparative COMPARATIVE Valuation VALUATION

Should be Should be fairly stable Fairly stable

Obtained from
Recent Records of Frequent Frequent transactions Transactions

Underlying Underlying economic Economic factors Factors should be studied Be studied

BELTING METHOD
If the depth of the plot is more than then the depth of the comparable plots in sales considered, this method is adopted to value the land.

BELTING METHOD
3rd Belt Recess Land of Belt Value 2nd Belt 1X 3/4th Value Of 1st Belt Remaining Value Of 1st Belt

Recess Land of Belt Value

1st Belt R O A D

Full Value

CONSIDERATION FOR DIFFERENT LANDS

Land with return frontage :- Give positive allowance depending on the importance of road on which return frontage. Land with irregular shape :- Carve out regular shape by drawing perpendiculars to road and give negative allowance to remaining land.

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