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In India, the Transfer of Property Act, 1882 governs the transfer of movable and immovable properties, and the laws pertaining to such transfers. Sometimes, the transfer is permanent, and sometimes temporary. It could be conditional in some cases, and may be unconditional in others. In any case, the transfer of movable or immovable properties should satisfy the provisions of Transfer of Property Act to come into effect as per law. Any disputes related to property transfers are dealt with in Courts with the help of Civil Lawyers. Here are the modes of transfer of property in India along with their explanation and definition as provided under the TPA. 

Five Types of Transfer of Property under Transfer of Property Act, 1882

1. Sale

As one can understand, sale means transfer of ownership of a property from one person to another in exchange of a specific consideration. Section 54 of the Transfer of Property Act defines sale as “transfer of ownership in exchange for a price paid or promised or part-paid and part-promised.” In simple words, a movable or immovable property can be subject to sale if a price is paid in exchange, or there is a promise to pay the same, or even some part of price is paid and the rest is promised to be paid on a certain date, when sale becomes complete.

A sale of immovable property is usually pursued based on a contract of sale which specifies the terms and conditions of sale. 

1. Gift

Gift, as generally understood, is the voluntarily giving something valuable to another without getting anything in return. Section 122 of the Transfer of Property Act defines “Gift” as the transfer of immovable or movable property, which is made voluntarily and without consideration. The party who gives such property as a gift is called the donor, and the one who receives and accepts such property is termed as the donee. While the provision talks about acceptance of gift by the donee during the lifetime of the donor, it may not necessarily be expressed but could be implied as well. Section 122 to 129 of TPA deals with the various scenarios related to gifts as the modes of transfer of property in India.   

1. Mortgage

Seeking loans by using other assets as security is not something new. This is the concept of mortgage wherein a loan is obtained, and to secure the same, some immovable or movable property is mortgaged, and after payment of the loan amount along with interest, the mortgage comes to an end. If the person is unable to repay the amount, the ownership of mortgaged property may be transferred, if so decided in the terms of mortgage agreement. 

As per Section 58 of the Trasnefr of Property Act, “A mortgage is the transfer of an interest in specific immoveable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability.”

1. Lease

Lease is the mode of transfer of rights in a property under TPA wherein the transfer is made for a certain time period, or perpetuity against a specific consideration of price paid or promised, of money or any other valuable thing, to be paid periodically or on specific occasions. The transaction includes acceptance on part of the other party making a contractual obligation binding the two under specific terms. The person who transfers lease property is called the lessor, and the one who receives it is called the lessee. Lease as modes of transfer of property is usually used for agricultural purposes, wherein rent may be paid in money or in crops as well. 

Since it is a temporary transfer of property, a lease may be determined on conclusion of time agreed, happening of an event so decided, termination of interest of lessor, by express surrender, by forfeiture, etc.

1. Exchange

In general, exchange can be understood as a transaction wherein one person is supposed to give a certain valuable and receive something else in return. Section 118 of TPA states that “When two persons mutually transfer the ownership of one thing for the ownership of another, neither thing or both things being money only, the transaction is called an “exchange”.”

In case of an exchange, the properties involved in exchange are specified and both the parties should be aware of the credentials of the same. In an exchange, the rights and liabilities possessed by the initial owners are transferred through exchange to that extent only. 

Also, in case of any deprivation of the property received in exchange due to any reasons, the other party is responsible unless bogus means are proved against the one alleging such deprivation. 

Written by: Advocate Anish Palkar