This post generally explains the basic things which are to be attended to while scrutinising a title deed of property. There may be different forms adopted by different professionals in presenting the report and different methods will be involved in scrutinising the deeds and documents. Hence without specifying those aspects, the core contents which are needed is dealt with in this post.
Contents of a Title deed
The property deed has to be read carefully from word to word. You may be required to read between the lines also. If we know what is a title deed and what are the things which are to be included in it, then scrutiny will become easier. A title deed, as the name suggests, evidences the title to a particular property to a particular person named in the deed. So there will be a description of the property in it which includes the measurement, boundaries, items of survey records, nature of property, presence of building etc. The seller's and purchaser's name will be present. Details of prior documents will be there. Note down everything. You can create a separate format either as soft copy or hard copy for jotting the details. This will help in writing/typing the Scrutiny Report and for future reference.
You have to find out the connected document of the deed. The connected documents include the prior deeds, tax receipts of land and building, encumbrance certificates, power of attorneys, etc. These documents will have great relevance with regard to the present transaction. You will need the prior deeds to find out the flow of title. This will help to find out whether there are any legal impediments to the present title deed by any restrictive covenants contained in the previous deed. If the prior deed is a partition deed, we will get to know the real extent of share standing to the name of present seller which he can alienate through the present deed. Thus various documents will have their own relevance. Other documents like tax receipts will enable us to find out whether the property is properly taxed and tax is being paid regularly. You have to obtain latest tax paid receipts from the concerned authorities for the same. Possession certificate will enable you to find out the person who is in legal possession of the same.
For this you may have to know various laws relating to property and revenue. In India, there is Transfer of Property Act which contains rights and duties of seller and buyer, their liabilities and powers, rules regarding alienation of property etc. It details various restrictions on alienation of property. So knowledge of this basic law will help you easily finish up scrutinising the deed in hand. Apart from this there is easement law also. Several states have their own laws regarding property rights and limitations. Knowledge of various things including conveyance, conservancy, reforms, utilisation etc pertaining to the property in force is essential. Verification in revenue records or the sub-registry with regard to any express restriction for alienation is essential. Sometimes there will be any order of Court or Tribunal restricting alienation. An encumbrance certificate for a period of 14 years or more is essential as per Indian laws. By this document you can know what all transactions have taken place in relation to the subject property.
You may have to look other important basic law of Contract. In India the Indian Contract Act, 1872 deals with the law relating to contracts. The rights of minor and life interest of parties to the prior deeds are to be looked into.
Legal Scrutiny Report
Now it is the time you finalise the Legal Scrutiny Report. The matter should be presented in such a way in which it is easily understood. The name and address of the owner of property is to be given. The Survey or plot number, extent, nature, village, taluk, district etc of the properties to be given. The boundaries are to be stated. Now give a brief description of documents showing the flow of title. This should go to the root of the document which means that the history should be traced. A period covering 13 or 42 should be studied and you should state the whole transactions up to date mentioning each document number and year with survey numbers and extents. Give a clean title certificate only if all the things are clear. For evidence you can specify what all documents you have verified in separate heads after the brief description of flow of title. Thus details of Encumbrance Certificate verified, details of property tax receipts verified etc can be made to separate heads.
Certificate and Advice
You can certify in the end regarding the clarity of title. If there are any legal restrictions you can mention that thing. If the title is clear or not you can give suitable advice. If there are any other documents to be obtained which are either primary or supportive, these can also be stated. If the title is not clear, give the reasons along with your judgement.