Test: Sale of Immovable Property - CLAT PG MCQ

A seller's lien refers to the seller's right to claim a charge on the property for any unpaid price after the sale is completed. This means that if the buyer fails to pay the agreed amount, the seller retains certain rights over the property until the payment is made, effectively securing their financial interest.

Before the completion of a sale, the buyer has the duty to pay the agreed price and disclose any facts that materially increase the value of the property. This obligation ensures transparency and fairness in the transaction and allows the seller to be aware of any significant information that may affect the sale.

For a sale to be valid, an essential element is that both parties involved—the seller and the buyer—must be competent to contract. This means they should not be disqualified from entering into contracts due to reasons such as being minors or mentally incapacitated. Competence ensures that both parties understand the terms and implications of the sale.

If the buyer fails to pay the sale price after the sale has been completed, the seller can seek legal remedies to enforce the payment. The seller retains a charge on the property, allowing them to claim the unpaid amount through legal means, safeguarding their financial interests even after the property has been transferred.

A sale, as defined by the Transfer of Property Act, refers specifically to the transfer of ownership in immovable property for a price that can be paid fully, partially, or promised. This definition distinguishes sales from other transactions, emphasizing the importance of price in the transfer of ownership.

In the context of a sale under the Transfer of Property Act, the consideration, known as the price, must be in monetary form. Importantly, the full payment of this price is not a strict requirement for the sale to be valid, as partial payments or promises to pay in the future can also suffice, highlighting flexibility in property transactions.

After the sale is completed, the buyer assumes ownership and is thus responsible for any loss to the property that may occur, such as accidental destruction or deterioration. This responsibility underscores the transfer of risk from the seller to the buyer upon completion of the sale, marking the transition of ownership rights.

The seller has a legal obligation to disclose any material defects in the property or in their title before the completion of the sale. Failure to disclose such defects allows the buyer to rescind the contract if discovered beforehand or to seek damages afterward. This obligation protects the buyer from unforeseen issues that could affect the property's value or usability.

The definition of a sale under the Transfer of Property Act refers specifically to the transfer of ownership in immovable property for a price that is paid, promised, or part-paid. It emphasizes that the seller retains no rights over the property after the sale is completed, making it an absolute transfer of ownership.

One of the key obligations of the seller before completing a sale is to disclose any material defects in the property or in the title to the property. Failure to do so can result in the buyer's right to rescind the contract if a defect is discovered before the sale is finalized. This ensures transparency and protects the interests of the buyer.