How to form opinion?
The techniques and reasons for scrutiny are explained in previous article 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 (original, 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 aout 25 words
duly enclosing the report.
