If a property is sold to different buyers, the person with the most valuable share is entitled to receive the chain of title documents Section 55 of Transfer of Property Act, 1882 (TPA) enumerates the rights and responsibilities that buyers and sellers have towards each other. What's important is which party is entitled entitled to receive/possess the chain of previous title deeds of the property, given the numerous instances of disputes arising between buyers and sellers over the same.
During the stage of negotiation between the buyer and seller, it is the seller's duty to furnish all documents relating to ownership/title of the property which in his possession, for the buyer's examination. It is the seller's duty to address questions raised by the buyer pertaining to the property and its title, to the best of his knowledge. In addition to demanding the chain of title deeds from the seller, buyers must also be proactive and visit the relevant sub-registrar's office (within whose jurisdiction the property being purchased is located) to check whether the chain of title documents have indeed been duly registered and whether the property is free from any registered charge/mortgage.
Once negotiations of sale/purchase of the property are finalised, and the parties proceed to execute the sale deed, the question of who is entitled to receive/possess the chain of title deeds depends on whether the buyer is purchasing the entire property or only a portion of it. The various scenarios that usually exist are as follows: If the buyer is purchasing the entire property of the seller, the seller is bound to deliver all previous title documents of the property in his possession to the buyer. The seller is required to hand over the chain of title deeds only when the buyer has paid the entire purchase money for such property. In case possession of the property is being handed over by the seller at a date later than the date of execution of the sale deed, it is the seller's responsibility to keep all title documents of the property safely till such time possession of the property is actually handed to the buyer.
If the buyer is purchasing only a part of the seller's property (eg one floor in a two-storied house) and the seller has retained the remaining portion of such property, it is the seller who is entitled to retain the chain of previous title documents.
In case different portions of the entire property are being sold to different buyers, the buyer who is purchasing the portion having greatest value is entitled to receive the chain of title documents of the entire property. Let's take an example of three different buyers who have purchased three different floors of the same property. Buyer X who purchased the ground floor also paid purchase money for exclusive use and ownership of the garden adjoining his floor. Since the entire portion owned by buyer X is of greater value than the other floors, he is entitled to retain the chain of title deeds of the entire property. However, the law also provides for responsibilities when conferring rights. An owner, whose portion of the entire property has the greatest value, is bound to furnish the chain of title deeds of the entire property upon reasonable request made by owners of other portions of lesser value.
In all these different scenarios, the person having possession of the chain of previous title deeds of the property must be aware that he has been entrusted with a crucial responsibility. He/she must endeavour to keep the title documents safe and undefaced. These covenants are implied in nature. That is, in the absence of a contract between the parties which is contrary to these covenants, the above-mentioned statutory provisions shall be enforceable.
