What Passes with a Transfer, and When Writing Is Required
Chapter Seven
Syllabus topic 1.2, "General principles of transfer of property"
Pages 33 to 37 of 378
In one line
A transfer carries with it everything that goes with the property unless the deed says otherwise, and it can be made by word of mouth wherever the law does not demand writing.
In exam wording: section 8 provides that, unless a different intention is expressed or necessarily implied, a transfer of property passes forthwith to the transferee all the interest which the transferor is then capable of passing in the property and in the legal incidents of it; and section 9 provides that a transfer of property may be made without writing in every case in which writing is not expressly required by law.
Why section 8 exists
No deed can list everything. A person selling a house is not going to enumerate the doors, the window bars, the keys and the right of way to the road, and if the law required him to, every conveyance would be a catalogue and every omission a lawsuit.
Section 8 solves that by supplying a default. The transfer carries the whole of the transferor's interest and the legal incidents of the property, unless the deed shows a different intention. So the parties write down what they want to change, not what they want to happen anyway.
Notice the two limits built into the words. It passes what the transferor is then capable of passing, so a life tenant still passes only a life interest, as section 7 requires. And it operates only in the absence of a different intention expressed or necessarily implied, so it yields to the deed.
What the section lists as incidents
Section 8 gives five illustrations of "legal incidents", and they are worth learning as a list because they are easy marks.
Where the property is land: the easements annexed to it, the rents and profits accruing after the transfer, and all things attached to the earth.
Where the property is machinery attached to the earth: the movable parts of it.
Where the property is a house: the easements annexed to it, the rent accruing after the transfer, and the locks, keys, bars, doors, windows and all other things provided for permanent use with it.
Where the property is a debt or other actionable claim: the securities for it, except where those securities are also for other debts or claims that have not been transferred, but not arrears of interest accrued before the transfer.
Where the property is money or other property yielding income: the interest or income accruing after the transfer takes effect.
Two patterns run through all five. First, the future goes with the property and the past stays with the transferor: rents, profits, interest and income accruing after the transfer pass; arrears accrued before it do not. Second, things provided for permanent use with the property pass, which is the same idea as clause (c) of "attached to the earth" in section 3, taught in [What Property Means, and Movable against Immovable Property].
What Passes with a Transfer, and When Writing Is Required
The exception in the debt limb repays a second reading. If the same security secures two debts and only one is assigned, the security does not pass, because it cannot be split between the assignee and the assignor without prejudicing one of them.
Section 9: oral transfers
Section 9 provides that a transfer of property may be made without writing in every case in which a writing is not expressly required by law.
The rule is therefore permissive with a large exception, and the exception is what a student must know, because most of the transfers in this syllabus are inside it. Writing, and usually registration, is expressly required by:
- Section 54, for a sale of tangible immovable property of the value of one hundred rupees and upwards, and for a sale of a reversion or other intangible thing: only by a registered instrument.
- Section 59, for a mortgage other than a mortgage by deposit of title-deeds, where the principal money secured is one hundred rupees or more: by a registered instrument signed by the mortgagor and attested by at least two witnesses.
- Section 107, for a lease of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent: only by a registered instrument.
- Section 123, for a gift of immovable property: by a registered instrument signed by or on behalf of the donor and attested by at least two witnesses.
Those are the same four provisions section 4 declares supplemental to the Registration Act 1908, and the same four the exemption power in section 1 singles out. They are the hinge between Module I and Module IV.
What is left for section 9 is real but narrower than beginners expect: a sale of tangible immovable property worth less than one hundred rupees, which may be made by delivery; a mortgage by deposit of title-deeds under section 58(f), which needs no writing at all; a lease from month to month or for a year or less; a surrender of a lease; and transfers of movable property generally.
A worked example
Latika sells her house at Bhandup to Manoj by a registered deed for Rs. 60 lakh. The deed describes the house and the plot and says nothing else. On the date of the transfer these facts are true: a tenant owes Rs. 30,000 rent for the three months before the sale and will owe rent afterwards; the house has a registered right of way over the neighbouring plot; the front door has an expensive brass lock; there is a window air conditioner; and Latika has a fixed deposit in a bank.
What Passes with a Transfer, and When Writing Is Required
Apply section 8.
The right of way is an easement annexed to the house and passes to Manoj.
The rent accruing after the transfer passes to Manoj. The Rs. 30,000 of arrears does not: section 8 passes rent accruing after the transfer, so the arrears remain Latika's and she can sue for them.
The lock, and the keys, bars, doors and windows, pass by name. They are listed in the section.
The air conditioner does not pass under section 8. It is not attached to the earth and it is not a thing provided for permanent use with the house, as discussed in chapter 10; it is movable property that must be sold separately if the parties want it to go.
The fixed deposit obviously does not pass. It is not the property transferred, and section 8 passes the incidents of the property sold, not the transferor's other assets.
Now change one fact. Suppose the deed had said "the seller reserves the brass lock on the front door". That is a different intention expressed, and section 8 yields to it. The lock stays with Latika.
What it does NOT mean
It does not enlarge what the transferor has. The words are "all the interest which the transferor is then capable of passing". Section 8 distributes; it does not create.
It does not override the deed. A different intention expressed or necessarily implied displaces it. The parties are always free to carve incidents out.
It does not pass arrears. This is the commonest slip. Rent, profits, interest and income that accrued before the transfer stay with the transferor, and the section says so about arrears of interest in terms.
Section 9 does not mean most transfers can be oral. For sale, mortgage, lease over a year, and gift of immovable property, writing and registration are expressly required, so section 9 is displaced.
Section 9 does not dispense with registration where the Registration Act requires it. Section 9 speaks of writing. Even where this Act does not demand a registered instrument, section 17 of the Registration Act 1908 may, and that is Module IV.
Distinctions
| Property transferred | Incidents that pass under s.8 | What does not pass |
|---|---|---|
| Land | Easements annexed, rents and profits accruing after, things attached to the earth | Rents and profits accrued before |
| Machinery attached to the earth | The movable parts of it | |
| House | Easements annexed, rent accruing after, locks, keys, bars, doors, windows, things for permanent use | Rent accrued before; loose movables |
| Debt or actionable claim | The securities for it | Securities that also secure other untransferred debts; arrears of interest accrued before |
| Money or income-yielding property | Interest or income accruing after | Income accrued before |
What Passes with a Transfer, and When Writing Is Required
| Writing required | Section 9 applies, oral is enough | |
|---|---|---|
| Sale of immovable property | Rs. 100 or more, s.54 | Under Rs. 100, by delivery |
| Mortgage | Rs. 100 or more, s.59, registered and attested | Mortgage by deposit of title-deeds, s.58(f) |
| Lease | Year to year, over one year, or reserving yearly rent, s.107 | Shorter leases |
| Gift of immovable property | Always, s.123 | Gift of movables, by delivery |
Quick revision
- Section 8 passes all the interest the transferor is then capable of passing, plus the legal incidents, unless a different intention is expressed or necessarily implied.
- Five listed classes: land; machinery attached to the earth; a house; a debt or actionable claim; money or income-yielding property.
- The dividing line everywhere is the date of transfer: what accrues after passes, what accrued before does not.
- Securities for an assigned debt pass, except where they also secure debts that were not assigned; arrears of interest never pass.
- Section 9 allows an oral transfer wherever writing is not expressly required.
- Writing and registration are expressly required by sections 54, 59, 107 and 123, the four provisions section 4 makes supplemental to the Registration Act 1908.
- Real cases for section 9: a sale under Rs. 100, a mortgage by deposit of title-deeds, a short lease, a surrender, and movables.
Test yourself
1. A house is sold on 1 August. The tenant owes two months' rent for June and July and pays it in September. Who is entitled to it? The seller. Section 8 passes the rent of a house accruing after the transfer. June and July rent accrued before 1 August, so it remains the transferor's and does not pass with the house.
2. Name four things that pass with a house under section 8. The easements annexed to it, the rent accruing after the transfer, and the locks, keys, bars, doors and windows, together with all other things provided for permanent use with the house.
3. A debt of Rs. 5 lakh and another of Rs. 3 lakh are secured by the same pledge. Only the Rs. 5 lakh debt is assigned. Does the security pass? No. Section 8 passes the securities for a debt except where they are also security for other debts or claims not transferred to the transferee. Here the pledge also secures the Rs. 3 lakh debt, which stays behind, so it does not pass.
4. Can a mortgage by deposit of title-deeds be created orally? Yes. Section 9 permits an oral transfer wherever writing is not expressly required, and section 59 excepts a mortgage by deposit of title-deeds from the requirement of a registered and attested instrument.
What Passes with a Transfer, and When Writing Is Required
5. Can a gift of a flat be made orally? No. Section 123 expressly requires a registered instrument signed by or on behalf of the donor and attested by at least two witnesses, so section 9 has no application.
6. Does section 8 pass property the transferor does not own? No. It passes only the interest the transferor is then capable of passing, which keeps it consistent with section 7.
The rest of this subject
These notes are cut from the University's printed syllabus. Open the syllabus itself, or the past papers, for the same subject.