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LegalKart Editor

LegalKart has an inhouse team of editors who research on the most relevant topics and write articles which can help understand the issue in a simple and easy manner. LegalKart aims to simplify law and make legal accessible to every Indian.

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Property Title Verification In India – The Process, Methods & Other Aspects

Property Title Verification In India – The Process, Methods & Other Aspects

Title is a legal term; It means right of ownership of property. The title of the property is the prime concern of everyone at the time of property purchase. Every property has a title. Title is the proof of the right of ownership or the basis of the right of ownership. Title can be created by act of parties or by operation of law.

The title to the immovable property is ascertained by reading the relevant "documents" and "deeds" relating to such property. The word "document" has a very broad import. Under common law 'document' means any substance expressed or described by means of letters, figures or marks for the purpose of recording that matter. Documents relating to property or commercial transactions are generally called instruments or deeds.

Land is a subject under the powers of the state governments under the Constitution of India and hence, property laws in India may differ from state to state. Apart from local laws, several laws framed by the central government also govern the acquisition and ownership of property (including interest in property) by way of purchase/sale, transfer, mortgage, inheritance or gift.

Transfer of property other than agricultural land, registration of deeds and documents come under the Concurrent List. When a person acquires or owns immovable property, the law also entitles him to use, lease, sell, rent or transfer/gift the land. The owner also has the right to mortgage his immovable property as security for the loan.

Here we'll tackle title checks required for a variety of purposes, including sale, lease, sublease and mortgage. For the purpose of brevity, reference to sale shall also include the purposes of lease, sublease, license and mortgage where applicable.

Importance of title verification

1. A title proves ownership. Barring a valid legal dispute, a land title serves as an official record for the ownership of the land. Without the appropriate title, the legal system would not recognize an unfiltered deed or informal contract.

2. All owners can hold their own duplicate title: Each owner of a land title can hold a legally valid copy of the title. The Register of Works will make a note of each owner's copy in the recordkeeping system to confirm the validity of the copy issued by each county. In the case of trust and company-based ownership, an accredited administrator may retain a copy of the title on behalf of the trust or company.

3. Prospective land owners often conduct title searches to uncover potential issues: During a title search, an investigator will look at years of land documents to identify potential issues with land ownership. A title search can prevent new owners from accepting liability for past issues. For example, a property owner cannot sell or transfer ownership rights to a property with unresolved tax issues. An outstanding lien can make any ownership transaction invalid.

Title searches reveal information about property taxes, property deeds contracts, CC&Rs (contracts, terms and restrictions), deed document issues and unresolved ownership claims, and more. If the previous property owner granted the easement or rights to use the property to a company or individual, the search will also reveal these recorded contracts.

While buyers and lenders commonly use title searches during the buy/sell process, many other parties can benefit from a title search. Home builders, businesses and government officials can use title searches for risk management and investment protection purposes.

4. Title Insurance Offsets the Risk Associated with Title Transfer: To mitigate the effects of issues not discovered during the title search, many land buyers invest in title insurance as part of the closing costs of the transaction. Owner's title insurance often provides coverage for damages up to the full value of the title in case an issuer jeopardizes a future claim of ownership. Owner's insurance policies will also cover dispute resolution legal costs, including damages paid to another party to the extent of the policy. Lender's title insurance protects the lender's agreement with the borrower. In the event of a land dispute, the policy will cover the lender's loss and legal expenses.

It is clear that title verification is a necessary activity before buying a property.

Property Title Verification Process & Method

The search for property title or legal description is done by the attorney or a title company in most real estate transactions. The Attorney/Title Company must first look at the past records of the property. A property can have a "Chain of Titles". The attorney has to see whether there is any encumbrance on the property.

Sometimes a legal succession certificate is also required to determine the title of the property if there is more than one person as the owner of the property. It is necessary to define the relationship of owners. But this is generally done when the property owner is a deceased person and that person has more than one legal representative. In such a situation, it is necessary to show the relationship between the deceased and his legal representative. It will also have to be checked that no objection has been raised on the sale of the said property.

Mother Deed is necessary to trace the origin of the property. It is a document that helps in further sale of property, thereby establishing new ownership. In the absence of the original deed, certified copies should be obtained from the registered authorities. Mother Deed covers change in ownership of property, whether through sale, partition, gift or inheritance. It is very important that the mother deed records the references to past ownership in a sequence and must be continuous and unbroken. In case of missing sequence, one should mention the text (Preamble) in records, revenue records or other documents from the registration offices. The sequence must be updated to the current owner.

Property title verification is necessary to prevent legal disputes after the sale of property. This is usually done with the help of the buyer's attorney. The attorney will determine by going through the past records of the property. Hence title verification assumes a major importance in the sale of property.

How To File Mutual Divorce? Mutual Divorce Process

How To File Mutual Divorce? Mutual Divorce Process

The Meaning And The Explanation Of Mutual Consent Divorce

A Mutual Consent Divorce is when both the husband and wife want to terminate the marriage. It is a decision taken by mutual consent, and hence, the mutual divorce process is a lot smoother than divorce by other means. As per the Hindu Marriage Act, 1955, both spouses have the right to file for the dissolution of their marriage by a decree of divorce on more than one ground specifically enumerated in Section 13. Section 28 of the Special Marriage Act, 1954 and Section 10A of the Divorce Act, 1869, also provides for divorce by mutual consent.

What Are The Conditions To file For A Mutual Divorce

As per Section 13B of the Hindu Marriage Act, 1955, the following conditions must be met to file for a mutual divorce.

(i) Both spouses must live separately for at least one year.

(ii) Both spouses feel that they cannot live together.

(iii) Both the husband and wife mutually agree that their marriage has collapsed

(iv) Both parties agree to comply and file jointly for a mutual divorce without any undue influence


The Documents Required for initiation of Mutual Divorce Process:

Marriage Certificate
Address Proof – Husband and Wife.
Four Photographs of Marriage.
Income tax Statement of last 3 years.
Details of profession and Income (Salary slips, appointment letter)
Details of Property and Asset owned
Information about family (husband and wife)
Evidence of Staying separately for an year


Step 1: Filing a Divorce Petition

A mutual divorce process is commenced with the filing of a divorce petition, which may be filed at any of the following places;

1.    Court where the couple last lived

2.    Court where the couple’s marriage was solemnized

3.    The court in the area where the wife currently resides

The divorce petition must be filed jointly by the concerned parties, and the notice is served to the family court by both parties. The grounds for divorce is that the spouses feel they cannot live with each other anymore, and hence, have agreed mutually to dissolve their marriage. Another common ground used to get a mutual divorce is that due to unavoidable differences, the couple has been living separately for over a year. The joint petition must be signed by both parties involved.

Step 2: Court hearing and inspection

After this, both the parties appear in the family court along with their lawyers. The court after going over the petition and all the supporting documents presented as proof before the court. It can also try to bring reconciliation, and if this is not possible, the mutual divorce process continues.

Step 3: Record Statement on Oath

the court passes an order, after duly scrutinizing their petition, to record the party’s statements on oath.

Step 4: First Motion

After recording their statements, the first motion is passed by the honourable court. Following this, the couple has to wait for 6 months before filing the second motion. However, the second motion must be submitted at least before 18 months after passing the first motion.

Step 5: Second Motion and Final Hearing

Once they decide to file the second motion, they can go ahead with the final hearing before the court. The final hearing includes both parties stating their case, and the court recording their statements on oath in the family court. Also, recently, the SC stated in their finding that the 6-months interim period can be avoided if the court wishes it to be. Courts do so if they feel both parties are sure about the divorce, and also if there are no issues related to alimony, child custody, or property.


Step 6: Divorce Decree

Once the couple state that they do not have any differences in matters concerning alimony, child custody, or sharing of property, the mutual divorce process reaches the final stage. Therefore, the couple must reach an agreement for the court to take a final decision. With the court’s satisfaction, it passes a decree of divorce, which declares that the marriage is dissolved, and this makes the divorce final.


Duration In Mutual Divorce:

Under Section 13B, when a couple files for divorce with mutual consent, they first have to establish a 12-month separation period, which is then followed by a "cooling off" period of six months. However, the Supreme Court had in 2020 ruled that on case to case basis, this period can be waived. 

How is alimony calculated?

  1. There is no fixed formula or hard and fast rule for the calculation of alimony that the husband needs to provide to his wife. The alimony can be provided as a periodical or monthly payment, or as a one-time payment in the form of a lump-sum amount.

If the alimony is being paid on a monthly basis, the Supreme Court of India has set 25% of the husband’s net monthly salary as the benchmark amount that should be granted to the wife. There is no such benchmark for one-time settlement, but usually, the amount ranges between 1/5th to 1/3rd of the husband’s net worth.

Who is eligible to get alimony?

Under Section 25 of the Hindu Marriage Act, permanent alimony is provided by the court to the wife or even to the husband for her or his support and maintenance. In case the wife is a working woman, but there is a considerable difference between her and her husband’s net earnings, she will still be awarded alimony to help her maintain the same standard of living as her husband.

If the wife is not earning, the court will consider her age, educational qualification and ability to earn to decide the amount of alimony. If the husband is disabled and is unable to earn and the wife is earning, then the court grants alimony to the husband.

Know Various Aspects Related To The Term Sheet

Know Various Aspects Related To The Term Sheet

1. What is a Term Sheet?

A term sheet is a nonbinding agreement that shows the basic terms and conditions of an investment. The term sheet serves as a template and basis for more detailed, legally binding documents. Once the parties involved reach an agreement on the details laid out in the term sheet, a binding agreement or contract that conforms to the term sheet details is drawn up.

2. Term Sheet in the Indian Context 

A term sheet may likewise be referred as a letter of intent, an MOU i.e. memorandum of understanding. The first round of speculation from a financial investor is known as a term sheet. Every round of investment has its own terms & conditions and these terms define a business seeking outside capital funding. The label isn't imperative, and regarding their structure and drafting they set out the key business and legitimate terms in regard to a proposed transaction.

You may also read Partnership Firms - The Principle Of Together We Rise, Together We Sink.

3. Is the Term Sheet legally binding in India?

One of the fundamental aspects in every corporate transaction is ascertaining whether the term sheet is intended to be binding or non-binding. Below we discuss the various facets of binding nature of term sheets, from a drafting perspective as well as enforceability perspective.
a.    Drafting Perspective  
i)    Non-binding Term Sheet: While this is the most common position in term sheets, calling this document 'non-binding' term sheet is a misnomer as actually it is a partially binding term sheet. There indeed is express language to indicate that the term sheet would not be binding between parties, as there would be detailed definitive documents in the future. At the same time, typically an exception would be created for clauses like Exclusivity, Confidentiality, Term and Termination, Governing Law and Dispute Resolution, and the like, which would remain binding between the parties.
ii)    Binding Term Sheet: As is self-explanatory, a binding term sheet implies all clauses and provisions therein would be binding between the parties. From an enforceability perspective, it has more teeth. Therefore, any definitive documents in the future should clearly have provisions that override this document.
iii)    Unilaterally Binding Term Sheet: This is an interesting practice that we sometimes observe, where the term sheet is drafted as a hybrid of the above two models. In other words, for one party it would be non-binding (with the exception of clauses cited above), while for the other party all obligations and commitments would be binding. This is normally done to a party that is perceived to be one that could significantly try to alter principles agreed in the term sheet during negotiations of definitive documents, or for start-ups where at term sheet stage the investor/acquirer does not have sufficient visibility of the facts.

4. What does a Term Sheet include?

Company valuations, investment amounts, the percentage of stakes, and anti-dilutive provisions should be spelled out clearly.
Voting rights. Startups seeking funding are usually at the mercy of VCs who want to maximize their investment return. This can result in the investor asking for and obtaining a disproportionate influence on the company's direction.
Liquidation preference. The term sheet should state how the proceeds of a sale will be distributed between the entrepreneur and the investors.
Investor commitment. The term sheet should state how long the investor is required to remain vested.

You may also like to read Know the various facts about Share Purchase Agreement.

5. What is the purpose of a Term Sheet?

All term sheets contain information on the assets, initial purchase price including any contingencies that may affect the price, a timeframe for a response, and other salient information.
Term sheets are most often associated with startups. Entrepreneurs find this document crucial for investors, often venture capitalists (VC), who may offer capital to fund startups. 

6. Who prepares the Term Sheet?

A term sheet may be prepared by either party – the investor or the founder. Usually, if a venture capital firm is investing, the VC offers a term sheet.

7. Is a Term Sheet legally binding?

Generally, term sheets are non- binding in nature, but they can become legally binding if executed on a stamp paper. The provision for its nature being non-binding can be inserted in the term sheet itself. Parties should be careful while drafting these documents at the negotiation stage.

8. Why are the terms important if they are non-binding?

While terms in a term sheet may be non-binding, they still represent the conditions of an agreement that both parties have agreed in-principle, like a handshake deal. If the due-diligence progresses well, these are the terms according to which a binding stock purchase agreement will be prepared.

9. How do you negotiate a term sheet?

Following are the ways to negotiate a term sheet: 
Get more than one VC interested
Understand common market terms
Watch out for red flags
Understanding valuation and dilution is critical
Consult with experts for advice

10. Are term sheets enforceable?

Generally, term sheets are non- binding in nature, but they can become legally binding if executed on a stamp paper. The provision for its nature being non-binding can be inserted in the term sheet itself. Parties should be careful while drafting these documents at the negotiation stage.

11. What is a term sheet in M & A?

A term sheet is a mostly non-binding document signed by the target and the prospective buyer that describes the major terms of the proposed acquisition. While most term sheets are non-binding, they often contain binding provisions regarding non-solicitation, exclusivity and confidentiality.

Also read Profession Is The Link Between An Individual And The Larger Society

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