Real Estate Management-1

7/31/2019 Real Estate Management-1

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REAL ESTATE MANAGEMENT

BY

MRS JYOTSNA CHAUBAL DESHPANDE

CHARTERED ENGINEER, CHARTERED PLANNER.CHARTERED VALUER.

FORMER JOINT DIRACTOR OF TOWN PLANNING

MAHARASHTRA STATE.


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REAL ESTATE


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PROPERTY

DICTIONARY MEANING

THINGS OWNED POSSESSION

ALL USEFUL THINGS OWNED BY MANCLASSIFIED ASWEALTH

PROPERTY-INTANGIBLE CONCEPT BEINGRIGHT TO POSSESS WEALTH

PROPERTY-LEGAL RIGHTTHATEXPRESSES THE RELATIONSHIP BETWEENOWNERS AND THEIR POSSESSIONS


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PROPERTY

DEFINITIONCONTINUOUS, EVER

LASTING USE, CONTROL AND

DISPOSITION EXERCISABLE BYOWNER OVER THING OR OBJECT.

PROPERTY SIGNIFIES SUM TOTAL OF

ALL RIGHTS AND POWERS INCIDENTTO OWNERSHIP.


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REALTY

LAND ORIGINALLY PROVIDED BY NATURE NOLONGER EXISTS ANYWHERE ON EARTH.

ALL LAND DIRECTLY ( BY CONSTRUCTION IFIMPROVEMENTS ON SITE ) OR INDIRECTLY (BYIMPROVEMENTS RELATED TO SITE) MODIFIEDBY MAN.

LAND TOGETHER WITH IMPROVEMENTS, ISDESIGNATED AS REALTY

REALTY INCLUDES LAND AND BUILDINGS, ASALSO ANYTHING PERMANENTLY AFFIXED TO

LAND I.E. FIXTURES.


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ESTATE

THE KIND OF ESTATEMEASURES THERIGHTS AND INTERESTS AN OWNER HASIN REAL PROPERTY IN TERMS OF:

DURATIONTIME GEOGRAHICAL EXTENTBREADTH,

DEPTH AND HEIGHT

DEGREESOLE OR CO-OWNERSHIP

CHARACTERLEASEHOLD, EASEMENTS

TERM ESTATE HAS BROADER MEANINGTHAN TERM TITLE.


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CLASSIFICATION OF REALESTATE


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PROPERTY

TYPES-1) CORPOREAL OR TANGIBLE

2) INCORPOREAL OR INTANGIBLE

TANGIBLEOWNERSHIP IN MATERIALTHINGS WHICH CAN BE PHYSIALLYTOUCHED OR FELT, E.G.LAND,FURNITURE, JEWELLARY ETC.

INTANGIBLEOWNERSHIP OF NON-MATERIAL THINGS WHICH CANNOT BEPOSSESSED IN PHYSICAL SENSE E.G.COPYRIGHTS, LEASES, GOODWILL,

EASEMENT RIGHTS ETC


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PROPERTY

CUSTOMARY CLASSIFICATION

1) MOVABLE.

2) IMMOVABLE.

MOVABLEFURNITURE , PLANT ANDMACHINARY, STOCKS, SHARES,DEBENTURES, INTELLECTUAL PROPERTY,GEMS AND JEWELLARY, CURRENCY, ARTS

AND ARTIFACTS ETC. IMMOVABLELAND AND BUILDINGS

ETC.


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IMMOVABLE PROPERTY

DEFINITION [AS PER SECTION 3(26) OFGENERAL CLAUSES ACT]

IMMOVABLE PROPERTY SHALL INCLUDELAND, BENEFITS TO ARISE OUT OF LAND ANDTHINGS ATTACHED TO THE EARTH ORPERMANANTLY FASTENED TO ANYTHINGATTACHED TO THE EARTH.

ATTACHED TO EARTH MEANS-

1. ROOTED IN EARTH AS TREES

2. IMBEDDED IN EARTH AS WALLS, BUIDG.

3.ATTACHED TO EMBEDDED FOR

PERMANAT BENEFICIALENJOYMENT.


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IMMOVABLE PROPERTY

(COND) AS PER TRANSFER OF PROPERTY ACTNO

POSSITIVE DEFINITION

STATES THAT IMMOVABLE PROPRTYDOES NOT INCLUDE STANDING TIMBERGROWING CROPS AND GRASS.

AS PER JUDICIAL DECISIONS

IMMOVABILITY IS INCAPACITY OF ATHING OF SUFFERING ALTERATION INRELATION TO PLACE, WITHOUT INJURYOR DAMAGING ITS SURROUNDINGS


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IMMOVABLE PROPERTY

( CONTD) CRITERIA

THE LINE OF DISTINCTION BETWEENMOVABLE AND IMMOVAVLE IS THIN.

THE INTENTION OF PARTIESKEY

THE MODE OF ANNEXATIONIMPORTANT

IF PLANT OR FIXTURE CANNOT BE

REMOVED WITHOUT GREAT DAMAGEINTENDED TO BE ANNEXED INPERPETUITY.


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LAND OWNERSHIP

LAND IS ORIGINAL AND BASIC FACTOR OFPRODUCTION.

LAND AS NATURE PROVIDED CONSISTS

OF THE EARTHS CRUST. LEGALLY, POSSESSION OF PART OF

EARTHS CRUST INCLUDES RIGHTS TOCONTROL MINERALS, GAS AND OIL

BELOW THE EARTHS SURFACE AS WELLAS AIR SPACE ABOVE THE GROUND.

SHAPEINVERTED PYRAMID.


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PROPERTY OWNERSHIP

OWNERSHIP OF REALTY CLASSIFIED ASPROPERTY.

TWO TYPES.

PERSONAL PROPERTYOWNERSHIP IS FOR A

LIMITED TERM OF YEARS. REAL PROPERTYOWNERSHIP OF REALTY

EXTENDS FOR A LIFETIME.

LESSEE POSSESSES PERSONAL PROPRETY IN

REALTY, WHERE AS LESSOR OWNS REALPROPERTY.

REAL PROPERTY CONSISTS OF LAND ANDOBJECTS PERMANENTLY ATTACHED TO

GROUND.


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ESTATES IN PROPERTY

FREEHOLD OR FEE SIMPLE

HIGHEST FORM OF RIGHT WITH REGARD TOREAL ESTATE. OWNER CAN:

USE PROPERTY IN ANY MANNER

ABUSE PROPERTY SO LONG AS IT DOES NOTRESULT IN A NUISANCE.

ENJOY PROPERTY BY EXCLUSIVE POSSESSION DERIVE BENEFITS, INCOME OR PROFIT FROM

PROPERTY.

DISPOSE THE PROPERTY BY SALE, GIFT OR

WILL.


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LESSER ESTATES IN

PROPERTY FREEHOLDERS RIGHT SUPERIOR TO ALL

OTHER RIGHTS.

ESTATES IN LAND OF LESSER QUANTITYTHAN 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.


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LEASE

OR ESTATE FOR YEARS

LEASE : FREEHOLD ESTATE GIVEN BYFREEHOLDER FOR USE FOR A FIXED DURATIONUNDER CERTAIN TERMS AND CONDITIONS.

LESSOR: FREEHOLDER OR LANDLORD. LESSEE : PERSON ACCEPTING LEASE.

RENT : LESSEE PAYS TO LESSOR RENT ORCOMPENSATION FOR USE OF LAND

LEASE DOCUMENT : WRITTEN PROMISE /COMMITMENT TO PERFORM CERTAIN DUTIESE.G. PAY TAXES, MAINTAIN PROPERTY ANDRETURN IN GOOD CONDITION ON TERMINATION

OF LEASE.


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SUBLEASE

LESSEE MAY TRANSFER HIS INTERESTFOR A SHORTER PERIOD THAN THEREMAINING PERIOD OF LEASE, WITHAPPROVAL OF LESSOR AND INCONFORMITY WITH THE LEASE TERMS .

SUB LESSEE : THE TRANSFEREE

HEAD LESSEE: THE MAIN LESSEE. HEAD LESSEE COLLECTS THEPROFIT

RENT.


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MORTGAGE

ANOTHER PROPERTY INTREST IS CREATEDWHEN FREEHOLDER MORTGAGES HISPROPERTY 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 THEMORTGAGED PROPERTY TO LIQUIDATE THEDEBT.

EQUITY : MORTGAGORS PROPERTY RIGHTS


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MORTGAGE

THE MOERTGAGOR AND THE

MORTGAGEE HAVE BECOME THEDIVERSE OWNERS IN A SINGLE

PROPERTY.

THEIR INTEREST ARECOMPLEMENTARY.


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EASEMENTS

EASEMENTS ARE MEANS BY WHICH

ONE PARTY MAY GAIN THE USE OF

SOMEONE ELSES LANDWITHOUTOBTAING THE TITLE.

OWNER MAY USE ADJACENT LAND

OWNED BY HIS NEIGHBOUR ON ATEMPORARY OR PERMANENT BASIS


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EASEMENTS

(CONTD)

DEFINITION:

A RIGHT GRANTED BY A

LANDOWNER TO SOMEONE FOR THE

NONEXCLUSIVE USE OF A PORTION

OF THE LAND FOR A SPECIFICPURPOSE.


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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


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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.


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OWNERSHIP

(CONTD)

RIGHTS:

1) THE RIGHT TO POSSESS AN OBJECT

(THOUGH HE MAY NOT HAVE THEPHYSICAL POSSESSION)

2) THE RIGHT TO USE AND ENJOY THETHING OWNED

3) THE RIGHT TO CONSUME, DESTROY ORALIENATE THE THINGS OWNED. THESEARE KNOWN AS THE LIBERTIES OFOWNERSHIP AND POWER.


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OWNERSHIP

(CONTD) 4) THE RIGHT TO ENJOY A PROPERTY

INDEFINATELY.

THUS HOUSE PROPERTY REMAINS UNDER THEOWNERSHIP OF THE LANDLORD UNTIL SOLD.

5) THE RIGHT TO RETAIN RESIDUAL RIGHTOVER A PROPERTY.

WHEN PROPERTY LET ON LEASE, OWNERRETAINS RIGHT OF REVERSION I.E. TORECEIVE BACK THE PROPERTY ON EXPIRY OFLEASE.


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POSSESSION

WORD PROPERTY IMPLIES BELONGING ORPOSSESSION.

CONCEPT OF POSSESSION IS AN ABSTRACTNOTION.

IT IS NOT PURELY LEGAL CONCEPT.

POSSESSION IS A FACTUAL CONCEPT.

IT DENOTES BOTH PHYSICAL CONTROL AS

WELL AS HAVING PHYSICAL CUSTODY OF THETHING.

PERSON HAVING POSSESSION ALSO HASPOWER TO EXCLUDE ALL OTHERS FROM

INTERFERING WITH HIS POSSESSION.


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TYPES OF OWNERSHIP

OWNERSHIP OF A PROPERTY NEED NOT BEALWAYS 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 THEPROPERTY IN QUESTION AND MUST BECLEARLY DEFINED.


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GOVERNMENT LIMITATIONS


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GOVERNMENT

LIMITATIONS THEORETICALLY FREEHOLDESRS RIGHT

IS ABSOLUTE.

HOWEVER, EVEN THE FREEHOLDER IS

RESTRICTED FROM ABSOLUTEENJOYMENT.

Government limitations on ownership imposed forwelfare of all citizen

1. Police power - Restrict use of property2. Eminent DomainCompulsory Acquisition

3. Right of Taxation

4. EscheatAssume ownership of unowned property


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POLICE POWER

SOVEREIGN POWER INHERENT IN THEGOVERNMENT, DELEGATED TO LOCALAUTHORITY/ GOVERNING AGENCY

TO RESTRICT THE USE, OCCUPATION AND

RIGHTS IN PROPERTY TO PROTECT WELLBEINGWELFARE, MORALS OR SAFETY -- OF CITIZEN.

WITHOUT ANY COMPENSATION.

RESOURCE TAKEN FOR CITY PLANNING,ZONING AND BUILDING CONTROL.

REGULATIONS OF BUILDING, FIRE ANDHEALTH DEPARTMENTLIMITATIONS UPON

USE OF LAND.


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EMINENT DOMAIN

SOVEREIGN POWER INHERENT IN THEGOVERNMENT

TO TAKE ANY LAND, BY DUE PROCESSOF 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


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RIGHT OF TAXATION

TAXES LEVIED BY GOVERNMENT FOR ITSSUPPORT AND FOR MAINTENANCE OF ITSBRANCHES THAT PROTECT AND BENEFITCITIZEN.

FAIR THAT CITIZEN PAY FOR PROTECTION ANDBENEFITS RECEIVED.

LAND, DUE TO ITS PERMANENCE AND

ACCESSIBILITYCONVENIENT ARTICLE TOTAX.

BASIS FOR LOCAL TAXATION.

TAXES ARE A COST OF LAND USE AND

OPERATIONS.


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ESCHEAT

REVERSION OR ESCHEAT OF LAND

TO THE STATE.

WHEN OWNER DIES, LEAVING NOHEIRS OR WILL TO DISPOSE THE

LAND.

LOGICAL SOLUTION SINCE LANDCANNOT BECOME UNOWNED.


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OTHER LIMITATIONS

PRIVATE OR CONTRACTUAL LIMITATIONSON OWNERSHIP

USUALLY CONTAINED IN DEEDS

EASEMENTS AND LEASESORMORTGAGE INSTRUMENTS.

FREEHOLDER IS VESTED WITH AND HASCONTROL OVER BUNDLE OF RIGHTS

HE MAY GRANT LEASE, CREATEMORTGAGE, INDUCT LICENCE, IMPOSECHARGE & SO ON.


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STATUTORY PROVISIONS


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LAND USE CONTROLS

UNDER

MAHARASHTRA REGIONAL ANDTOWN PLANNING ACT,1966.


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CONTENTS OF

DEVELOPMENT PLAN SECTION 22--

1. ZONINGRESIDENTIAL/COMMERCIAL

INDUSTRIAL/RECREATIONAL 2. RESERVATION OF SITES FOR PUBLIC

PURPOSES --SCHOOLS, COLLEGES,

HOSPITALS, LIBRARIES,PARKS ANDGARDENS ETC.

3. ROAD NETWORK

4. DEVELOPMENT CONTROL RULES


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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 CONGLOMERATIONOF INDUSTRIES IS OBTAINED.

2. MIXING OF NON-CONFORMING USERSPREVENTED


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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


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DEVELOPMENT CONTROL

RULES

PART AND PARCEL OF DEVELOPMENT PLAN.

FROM PUBLIC HEALTH AND SAFETY POINTOF VIEW.

FOR CONTROLLING AND GUIDING THEDEVELOPMENT TO ACHIEVE THE GOALSAND OBJECTIVES OF THE DEVELOPMENTPLAN.

STANDARDIZATION OF DEVELOPMENTCONTROL RULES FOR A, B, C CLASSMUNICIPAL COUNCILS AND MUNICIPALCORPORATIONS, KEEPING IN VIEW THE

NATIONAL BUILDING CODE.


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TRANSFER OF PROPERTY

UNDER

TRANSFER OF PROPERTY ACT, 1882.


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TRANSFER OF PROPERTY

ACT Ownership is a conglomeration of legal rights and

ownership denotes the legal relation between theowner and the real property and is thus the sum

total of his rights thereon.

It therefore, becomes necessary to learn the legalprovisions for Asset Acquisition or for AssetDisposition for that matter.

The Transfer of Property Act,1882 deals with theprinciples behind the transfer of all properties,movable or immovable.


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CONSIDERATION

Section 4 of the Transfer of Property Actstates that the chapters and sections of the

Act which relate to contracts shall beconsidered to be a part of the IndianContract Act, 1872. Likewise, certainsections of this Act dealing with registration

of transactions should be consideredsupplemental to the Indian Registration Act,1908.


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SECTION 5

Section 5 defines transfer of property as atransaction whereby the possession or ownershipof a property undergoes a change by the acts of the

parties to the said transaction. Examples of such achange of ownership or possession may be in theshape of a sale (where the ownership is totallyeffected), a mortgage (where possession of the

property is used as a security for payment of aloan) or a lease (where possession of a property isenjoyed on payment of a rent) among others.


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TRANSFER OF INTEREST

Ownership, as seen earlier, consists of a

bundle of rights. The rights which so make

up absolute ownership (e.g., right ofpossession or right of engagement) are

called interests in property and a transfer of

property is either a transfer of absoluteownership or a transfer of one of those

interests.


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SECTION 6

Transferability is the general rule in the law ofproperty and the right to property includes theright to transfer the property to another person.

Subject to this general principle, the Transfer ofProperty Act lists certain properties which cannotbe transferred.

Section 6 of the Act states that excepting these and

certain other properties whose transfers arerestricted by other laws, property of any kind maybe transferred.


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SECTION 7

Section 7 deals with competency to be atransferor. It states that a transferor must (a) becompetent to contract, and (b) have title to the

property, or authority to transfer the property if theproperty is not his own. In this connection,reference is made to Sec. 11 of the Indian ContractAct, 1872 which specifies the competency to

contract and states that a person is competent tocontract if he is (a) of the age of majorityaccording to the law to which he is subject, (b) ofsound mind, and (c) not otherwise disqualified

from contracting.


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POWER TO CONTRACT

It is thus clear that the power to transfer depends on thepower to contract, as without a contract to give andtake, there can be no transfer at all. Further, it is also a

well established principle of law that a minor lacks thecompetence to contract and consequently thecompetence to transfer, and what is more, a minor doesnot even have the competency to authorize another to

enter into a contract on his behalf. Although a minorcannot be a transferor, a transfer made to a minor is avalid one. In other words, a minor lacks thecompetence to be the transferor but he possesses the

competence to be a transferee.


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SECTION 8

Section 8 of the Act confers stability on title

and removes speculations in a transfer. It

elaborates the operation of a transfer andstates that unless a different intention is

expressed or implied, a transfer of a

property passes immediately to thetransferee.


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SECTION 8 (CONTD)

Section 8 also elaborates the legal incidents involved inthe transfer. Some of these are:

1. Where the property is a land- The easementsannexed thereto, the rents and profits accruing after thetransfer and all things attached to the earth.

2. Where the property is machinery attached to theearth- All movable parts thereof.

3. Where the property is a house- The easementsannexed to it, the rent accruing after the transfer as wellas locks, keys, doors, windows and all other thingsprovided for permanent use.


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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 andpart-promised.

In the case of a tangible immovable property of thevalue of Rs 100 or more, the sale can be made only bya registered instrument. In the case of a tangibleimmovable property of a value less than Rs 100, sale is

effected either by a registered instrument or by thedelivery of the property, that is, when the seller placesor directs the buyer in possession of this property.


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CONTRACT FOR SALE

A contract for the sale of immovable

property is a contract that a sale of suchproperty shall take place on terms settled by

the parties. A contract for sale does not

create any interest or charge on such

property.

O GAG S A C A G S


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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 ofsecuring the payment of money advanced or to beadvanced 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 calledthe mortgagor. The 'Transferee is called themortgagee. The principal money and interest is themortgage money. The instrument by which themortgage is created is called the mortgage-deed.


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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 onspecified occasions, to the transferor by the

transferee, who accepts the transfer on such terms.


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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 isgoverned by Sections 105 to 117 of theTransfer of Property Act.


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ESSENTIAL ELEMENTS OF

LEASE Lessor

He / She must be a person competent to enter intoa contract and must have authority and title to doso.

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, alease to a minor is void, as the lease is to beexecuted both by the lessor and the lessee.


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LEASE Subject matter

The subject matter of the lease must be a propertyand its description must be fully given in the leasedeed.

Duration

A lease must be made for a certain time, express

or implied, or -in perpetuity. It may be noted herethat under English law, a lease into perpetuity isunknown. In India, however, such leases may becreated by an express or a presumed grant.


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LEASE Consideration

Consideration may be premium plus rent, or

premium alone or rent alone. Premium isthe price paid or promised in consideration

of a transfer by way of lease. Any payment

by the lessee that is part of the considerationof the lessee is rent.

FEATURES OF A LEASE


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FEATURES OF A LEASE

(CONTD)

Agreement There must be an agreement of lease between lessor and

lessee. At the same time, merely an agreement to lease doesnot establish a legal relationship between lessor and lessee.

The term demise is used in English law but is not defined inthe Transfer of Property Act. The test for determiningwhether an agreement to lease effects a present demise isnot whether the transfer is to operate immediately but

whether the right to enjoy the property is actuallytransferred or not. An agreement to lease creating a presentdemise required writing and registration without which itwill not be admissible in evidence. The lessee must acceptthe lease.


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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. Theessential 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.


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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.


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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 109of 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.


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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 orreserving a yearly rent, only by a registered

instrument. In any other case, it can be made eitherby a registered instrument or by an oral agreementaccompanied by delivery of possession.

In the case of a lease by a registered instrument, or

by two or more instruments, the instrument or eachof the instruments must be executed by both thelessor and lessee (Section 107 of the Transfer-ofProperty Act).


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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 eitherlessor or lessee by giving six months' noticeexpiring 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 monthand terminable on the part of either lessor orlessee by giving a 15 days' notice and expires atthe end of the month of the tenancy.

DURATION AND


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DURATION AND

TERMINATION OF LEASE The aforesaid statutory presumptions regarding

duration arise only when there is no agreement betweenthe parties, or local usage is to the contrary (Section106 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 musteither be sent by post to the party who is intended to bebound by it or be tendered or delivered personally tosuch party, or to one of his family or servants at hisresidence, or (if such tender or delivery is notpracticable) affixed to a conspicuous part of theproperty.


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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).


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COMPUTATION OF LEASE

This is governed by Section 110 of the Transfer of

Property Act.

1. Where the time limited by a lease of immovableproperty 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 limitedbegins from the making of the lease.


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COMPUTATION OF LEASE

2. Where the time limited by a lease is a year or anumber of years, in the absence of an expressagreement to the contrary, the lease shall last

during the whole anniversary of the day fromwhich such time commences.

3. Where the time limited by a lease is expressedto be terminable before its expiration, and the

lease omits to mention at whose option it is soterminable, the lessee and not the lessor shall havesuch option.


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REGISTRATION

UNDER

BOMBAY STAMP ACT, 1958.


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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.


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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 sharedebenture, proxy and receipt.


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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.


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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.


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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 waschargeable on the amount set forth in the instrument.

Thus the basis of determining value of the property

for charging stamp duty was shifted fromconsideration set forth in the instrument to the

Market Value.


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REAL ESTATE APPRAISAL


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DEFINITION OF MARKET

VALUE THE MARKET VALUE OF A PARTICULAR

INTEREST IN LANDED PROPERTY MAY BE

DEFINED AS THE AMOUNT OF MONEYOFFERED BY A WILLING PURCHASER TO AWILLING SELLER OF THAT INTEREST,IN THEOPEN MARKET, WHERE THERE ISCOMPETITION, AND BOTH PARTIES ARE

BEING ACTUATED BY ECONOMICCONSIDERATIONS, AND WHERE THERE IS NOUNDUE PRESSURE ON EITHER OF THEM.


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VALUATION

OF IMMOVABLE PROPERTIES PROPERTY: - Right to own and possess andto 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.


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COST AND PRICE

COST Expenditure on inputs.

PRICEExpenditure on input +

Profit.


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VALUE

Result of Interaction of Demand and

supply.

Value is not intrinsic in Object. People

create Value.

Individual / Subjective Value.

Market / Objective Value.


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CHARACTERISTICS OF VALUE

FUNDAMENTAL PRINCIPLE OF ECONOMICS IS THAT,FOR ANOBJECT TO HAVE VALUE. IT MUST SATISFY FOLLOWINGBASIC CONDITIONS

UTILITYThe power to render a service or fill a need.

SCARCITYin relation to supply and demand and

possible alternative uses.

DEMANDNeed with monetary power to fill demand.

TRANSFERABILITYRights of possession and control

of ownership of property.


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VALUATION

It is an art or science of estimating the

value for a specific purpose of a

particular interest in property at aparticular moment in time taking into

account all features of the property and

considering all factors of the market.


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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 DUTYREADY RECKONER.

XIV) RATABLE VALUE.

XV) ARBITRATION.

XVI) LEASES INTEREST/LESSEES INTEREST.

XVII) MERGER AND ACQUISITION OF INDUSTRIAL UNITS.REVALUATION OF ASSETS FOR MARKET CAPITALIZATION.


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INTERESTS IN REAL ESTATE


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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.


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PARTICULAR MOMENT IN TIME

The valuation of a property is related to the

date of valuation and is different at different

moments in time.


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FEATURES OF THE PROPERTY

Location

Situation

UserResidential/Industrial/Commercial SizeSmall/Gross

ShapeRegular/Irregular

F.S.I. permissible Road FrontageSmall/Large,

Important Road/Local Road


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FACTORS AFFECTING

REAL ESTATE MARKET


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FACTORS AFFECTING REAL

ESTATE MARKET

Political, Legal, Social, Urban and Economic

forces influence the real estate market.


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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.


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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.


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COMPARATIVE METHOD

FIND OUT CONSIDERATION ACTUALLY PAID FOR OTHER SIMILARPROPERTIES IN THE SAME LOCALITY AND THREE TO FIVEYEARS 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.


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The Evidence The Market

Should be based on

Transactions of similarproperties

IN the same area

Obtained from

Recent Records

ComparativeValuation

Should befairly stable

Underlyingeconomicfactors shouldbe studied

of Frequenttransactions

The evidence

Transactions of similarproperties COMPARATIVE

VALUATION

In the same area

Recent Records FrequentTransactions

The Market

Should beFairly stable

UnderlyingEconomic

Factors shouldBe studied

COMPARATIVE METHOD


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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.


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1st Belt

2nd Belt

3rd Belt

X

1 X

Remaining

Full Value

3/4th Value

Of 1st Belt

Value

Of 1st Belt

Recess Land

of Belt Value

Recess Land of Belt Value

R O A D

BELTING METHOD

CONSIDERATION FOR


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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 toremaining land.


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THANK YOU

Date post:	05-Apr-2018
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