Forming of Opinion of Title

How to form opinion?

The techniques and reasons for scrutiny are explained in previous artilce and based on which genuineness of the deed can be found, then the proplawyer has to discuss probable challenges, disputes, etc and then form a opinion on flow of title and its marketability.

While reading the deed, the reader shall apparently understand and form an opinion that the executant has executed the deed out of free mind without coercion, influence. It is not sufficient that the deed has a mention about the free will and wish of the executant.

How the vendor has got the ownership is to be identified. Whether it is a self acquired one or ancestral one, if  it is a ancestral, whether he has got partitioned the property are the questions to be asked and the answers are to be found. The ancestral property becomes a self acquired one on partition of the same. Otherwise, it is to be checked whether the vendor has 100% share over the property or lesser undivided share. For this, the proplawyer has to scrutinize the present deed and its previous deeds.

By any act of the parties viz., SD, Will, settlement, release, partition, succession, gift, assignment, decree, adverse possession or by the operation of law, the present owner might have got the ownership. To find whether the property has properly devolved on or transferred to the executant, the present deed and its previous documents are to be scrutinized.

Root document is one from which the title devolves ownership and documents prior to this document are not needed. There is no definite procedure to what extent and what period, the previous deed are to perused. However, it is advised as a general rule to scrutinize the deeds for a period of 30 years. If the title is not ascertained within 30 years or no transaction has happened in last 30 years or root document is beyond 30 years, it becomes necessary to make search and investigation beyond 30 years up to the root of title and peruse the same.

For example, in 1972, a woman acquired a land, constructed a house in 1974, and later expired in 2002. Her one son released his half share in favour his brother in 2004. Now, the root document is the document of the year 1972, which beyond 40 years. Hence, the search has to be made up to 1972

Next, nature of right/ ownership, the seller/ owner has over the property also to be found out. The ownership may be absolute or limited or conditional. Absolute means complete ownership which allows the owner to alienate the property. Limited ownership means nothing but lifetime estate, he has no alienation rights as such the owner can enjoy the yields of the property and cannot mortgage, create any charge, lien or encumbrance over the property or sell the property.

Genuineness by witnesses

The next important, usually avoided, stage of scrutinizing is perusal of witnesses. They play a very important role in proving the execution of the deed by the executant in clear mind and also act as a human identity device. They shall prevent any claim, disputes, challenges and hence it becomes necessary to check the relationship between the witness and the executant or claimant. The importance of witness is clearly discussed previously under the title scrutinizing of deeds and under the heading witness.

Probable challenges, disputes, claims

Next, the proplawyer shall imagine whether the property may subject to any challenges, by the legal heirs of executant in future, based on the contents of the deed on hand, the devolution of property or from the heirs of previous owners.

The reason for deed is also to be studied, it may be noted that the cost of registration for Settlement Deed and General Power of Attorney (GPA) are comparatively very less and for that reason more cheatings and frauds are happened through settlement deeds and GPA. In case of settlement deed, the reason for excluding other deserving persons/ heirs is also to be found and in case of GPA, special scrutiny is needed on reason for non availability of original owner and circumstance behind appointing agent. Though it is discussed under the title, “Scrutiny of Deeds”, it is again told here considering the importance. If the proplawyer smells any  discrepancy, the client may be advised so.

The probable disputes by adjacent property owners are also to be imagined by comparing the schedule of the property, field measurement record, with the documents of the adjoining property. In normal practice, the neighbors won’t give the copies of their title deeds and hence the client may not be in a position to produce the same for scrutiny and opinion. We can get certified copy of documents of adjoining property from the registrar office. In such an event, it is to be advised to the client to measure the boundary of the property in presence of the owners of the adjoining properties.

Flawless document

Wordings of the document shall be carefully scrutinised as it communicates the motive of the deed. It shall not give any room for ambiguous matter or not be a matter of interpretation.

It shall not contain any error in it, otherwise it has to be advised to get it corrected by rectification deed. Sometimes, one part of a deed may be written in contrary to other part of deed, which may make the deed voidable.

For example:

This settlement deed was executed by a father in favour of his daughter excluding his son. He had stated that the transfer of property shall take effect after the lifetime of the executant. He further added a clause, as usually available in all sale deeds, that there is no charge, lien, encumbrance in the property and assured that he would clear them, if any, found later.

It is clear that the transfer shall take effect only after the life time of the executant and in the event of finding any lien or charge or encumbrance, the promise of clearing the same by the executant would not be possible when he would not be alive.

Thus the above guarantee clause is contrary to operative clause which shall direct us to a decision that executant had not understood the meaning of the contents of the settlement deed or in fact he did not study the document, which shall result in invalidating the document.

Tracing of title

Now, the title to be traced from the root and it is to be found whether the title is devolved properly on the present owner. Root document is one from which the title devolves ownership and documents prior to this document are not needed. There is no definite procedure to what extent and what period, the previous deed are to perused. However, it is advised as a general rule to scrutinize the deeds for a period of 30 years. If the title is not ascertained within 30 years or no transaction has happened in last 30 years or root document is beyond 30 years, it becomes necessary to make search and investigation beyond 30 years up to the root of title and peruse the same.

For example, in 1972, a woman acquired a land, constructed a house in 1974, and later expired in 2002. Her one son released his half share in favour his brother in 2004. Now, the root document is the document of the year 1972, which beyond 40 years. Hence, the search has to be made up to 1972

The client to be advised to see all the documents in original, if the vendor does not want to give them, being original, to the purchaser (the client here), the lawyer has to ask the vendor to bring the original deeds and to produce the same to the lawyer in order to verify and form a conclusive opinion.

Conditional transfer

Sometimes, the property is transferred on any condition . if any condition is found in a document, such conditions are to be examined. Sometimes, a condition may be imposed that the claimant has to pay certain amount periodically to the executant or to any person nominated by the executant as maintenance. In this case, if the claimant does not pay the maintenance as directed in the document, the transfer of property by that document becomes invalid.

The condition may be imposed restricting the alienation for a certain period or till the happening of a certain/ specific event. In this case, validity of the condition and the happening of a certain/ specific event have to be examined.

Time of effect

In some other cases, the transfer of property vide a deed may not come into effect immediately and it may transfer to the claimant after the lifetime of executant or on happening of a certain/ specific events. The client may be advised to verify the status of the condition and thus the validity of the deed.

For example, a property may be attached with (on sale of) another property as an guarantee. If the buyer of the property is selling suffering from any damages due to inadequacy of the title, the seller has to rectify the same in normal practice, but in this case, the buyer can acquire the title of the attached property as an indemnity or relief for damages. This guarantee may be for twelve years.

In this way, the buyer is not the owner of the attached property till the damage is happened and as such he cannot own or sell the same.

In some settlement cases/ gift cases, the transfer may take effect after the life time of the executant. Here, the proplawyer has to ensure that the present executant has got ownership and there is no condition restricting him away from alienation.

Lien, charge

Some transactions are unregistered as such they wont be reflected in encumbrance certificate. Just a deposit of title deed is enough to create equity mortgage which does not require any instrument or its registration. Many banks advanced and advances loan against the property on deposit of original title deeds. Like this lease, easement, any order of a Court are not registered. Wills/ codicils are also need not be registered and as such not reflected in encumbrance certificate.

Hence, it is advisable to inspect the documents in original and also to publish notice, if needed, in local news paper and ask for any objection in order to get convinced that the property is not affected by or subjected to any claim due to any lien, charge, etc.

Forming of opinion

After going through all documents and deeds and seeing them in original, the solicitor can understand whether the property has devolved on the present owner properly, the title has transferred to him or herself legally.

Then the solicitor shall find any restriction available or imposed on usage of the property and condition to alienate the property. After ensuring the same, the lawyer shall check for probable dispute, challenge, claims, frauds, etc on the previous deeds for which lien, charge, encumbrance are to be scrutinized.

The lawyer shall have to confirm there is no proposal by government for land acquisition for any project or any public purpose or any proceedings under land ceiling Act or any other Acts. For which, the lawyer may have to get information from revenue department, Taluk Office. And then finally, ownership is to be ensured.

If findings on all the above are in the affirmative, jurisprudence/ judicial conscience shall form an opinion that the present owner is conferred with ownership rights and the title is clear and marketable.

If any finding is negative, the lawyer shall have to take a decision, as discussed in this book at various places under various headings in order to advice the client suitably and accordingly.

Making of Report of Opinion on Title

After framing the opinion, the prop-lawyer has to convey his formed opinion on the title of the property in a report form, which may contain the following:

  • Description of property
  • List of documents scrutinised (in original and Xerox)
  • Devolution of title of property
  • Probable challenges (Optional)
  • Opinion

In addition to this, the lawyer has to issue a covering letter addressed to the client stating the short version or abstract of his opinion in about 25 words duly enclosing the report.

 

Published in Property Law
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