Property Laws: Basic Concepts

The Transfer of Property Act 1882 is an Indian legislation which regulates the
transfer of property in India. It contains specific provisions regarding what constitutes
transfer and the conditions attached to it. It came into force on 1 July 1882.
According to the Act, 'transfer of property' means an act by which a person conveys
property to one or more persons, or himself and one or more other persons. The act
of transfer may be done in the present or for the future. The person may include an
individual, company or association or body of individuals, and any kind of property
may be transferred, including the transfer of immovable property.
Property is broadly classified into the following categories:
1. Immovable Property (excluding standing timber, growing crops, and grass)
2. Movable Property
The Interpretation of the Act, says "Immovable property does not includes standing
timber, growing crops or grass". Section 3(26), The General Clauses Act, 1897,
defines, " immovable property" shall include land, benefits to arise out of land, and
things attached to the earth, or permanently fastened to anything attached to the
earth. Also,The Registration Act,1908, 2(6)
"immovable property" includes land, buildings, hereditary allowances, rights to ways,
lights, ferries, fisheries or any other benefit to arise out of land, and things attached
to the earth or permanently fastened to anything which is attached to the earth, but
not standing timber, growing crops nor grass.
A transfer of property passes forthwith to the transferee all the interest which the
transferor is then capable of passing in the property, unless a different intention is
expressed or implied.

Lease
A lease is a contractual arrangement calling for the lessee (user) to pay the lessor
(owner) for use of an asset. Property, buildings and vehicles are common assets that
are leased. Industrial or business equipment is also leased.
Broadly put, a lease agreement is a contract between two parties, the lessor and the
lessee. The lessor is the legal owner of the asset; the lessee obtains the right to use

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the asset in return for regular rental payments. The lessee also agrees to abide by
various conditions regarding their use of the property or equipment. For example, a
person leasing a car may agree that the car will only be used for personal use.
The narrower term rental agreement can be used to describe a lease in which the
asset is tangible property.
Illustration;
A for a period of 7 years lets out his property for use to B for a some of Rs. 1 lakh.
This is called lease. A is the lessor and B is the lessee. If B sub-lets the property to C,
then B will be the lessee and C will become sub-lessee. The relation between B and C
will be of that relation that is between A and B (The lessee can also sub-let the lease
and therefore the relation between the lessee and the sub-lessee will be that of
lessor and lessee).

Gift
“Gift" is the transfer of certain existing moveable or immoveable property made
voluntarily and without consideration, by one person, called the donor, to another,
called the donee, and accepted by or on behalf of the donee. Such acceptance must
be made during the lifetime of the donor and while he is still capable of giving. If the
donee dies before acceptance, the gift is void. The concept of gift is diametrically
opposed to any presence of consideration as given in the Indian Contract Act, 1872.
Illustration:
A gives flat to B. B accepts the flat. But B does not pay anything in return for the
flat. This is known as gift. A is the donor and B is the donee.

License

License, is defined under section 52 of the Easement Act, 1882 - Where one person
grants to another, or to a definite number of other persons, a right to do, or continue
to do, in or upon the immovable property of the grantor, something which would, in
the absence of such right, be unlawful, and such right does not amount to an
easement or an interest in the property, the right is called, a license.

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Difference between License and Lease

• A lease is a transfer of an interest in land. The interest transferred is called the

leasehold interest. The Lesser parts with his right to enjoy the property during
the term of the lease and the lessee gets that right to the exclusion of the
Lesser.
• In case of license, the legal possession continues to be with the owner of the
property, but the licensee is permitted to make use of the premises for a
particular purpose. But for the permission his occupation would be unlawful. It
does not create in his favour any estate or interest in the property.