Transfer of Property Act, 1882 – Legal Framework of Property Transactions in Bangladesh
The Transfer of Property Act, 1882 is a fundamental piece of legislation in Bangladesh that regulates the transfer of immovable property. It governs transactions related to buying, selling, mortgaging, leasing, and gifting property.
Scope and Application
This Act applies to both individual and commercial property dealings. It mainly covers immovable property and outlines the legal requirements, rights, and liabilities of the parties involved in a property transfer.
Key Definitions
- Transfer of Property: Conveying ownership, interest, or rights from one person to another.
- Immovable Property: Includes land, buildings, and things attached to the earth.
Main Types of Property Transfer under the Act
- Sale: Transfer of ownership in exchange for a price paid or promised.
- Mortgage: Transfer of interest as security for a loan.
- Lease: Transfer of the right to enjoy property for a specific time and price.
- Gift: Voluntary transfer without consideration.
- Exchange: Mutual transfer of ownership of property between two parties.
Essential Elements of a Valid Transfer
- The transfer must be between competent persons.
- The property must be transferable by law.
- The purpose must be lawful and not defeat any existing rights.
- The transfer must be done through registered documents in case of immovable property above a certain value.
Important Provisions of the Act
- Section 5: Definition of ‘Transfer of Property’
- Section 6: What may be transferred
- Section 7: Competency to transfer
- Section 54: Definition and method of sale
- Section 58: Types of mortgage
- Section 105: Lease definition
Exceptions – Properties That Cannot Be Transferred
According to Section 6, certain properties are non-transferable, including:
- The chance of a person’s future inheritance
- Right of re-entry
- Public office or emoluments attached to it
Importance for Banks and Financial Institutions
- Ensures legality of mortgage and collateral documents
- Protects lender’s interest in case of default
- Regulates land transfers involved in loans and project finance
Conclusion
The Transfer of Property Act, 1882 is essential for ensuring fair and legally binding property transactions in Bangladesh. Whether you are a banker, investor, real estate developer, or legal professional, understanding this Act is crucial for navigating property-related affairs safely and efficiently.
