Reverse Mortgage in India

In the Union Budget 2007-08, a proposal to introduce 'Reverse Mortgages' in India was put forth. The concept of reverse mortgage, although new in India, is very popular in countries like the United States.
A reverse mortgage allows the property owner, to access some of the value of the property without selling it. You remain the owner with all your current obligations. And you get a cash stream from your property. When the reverse mortgage agreement is over you or your heirs must repay all of your cash advances plus interest.
In a regular mortgage, a borrower mortgages his new/existing house with the lender in return for the loan amount (which in turn he uses to finance the property); the same is charged at a particular interest rate and runs over a predetermined tenure.
The borrower then has to repay the loan amount in the form of EMIs (equated monthly installments), which comprise of both principal and interest amounts. The property is utilised as a security to cover the risk of default on the borrower's part.
In the reverse mortgage, senior citizens (borrowers), who own a house property, but do not have regular income, can mortgage the same with the lender (a scheduled bank or a housing finance company-HFC). In return, the lender makes periodic payment to the borrowers during their lifetime.
Reverse mortgage works like a pension scheme for the elderly who live in a house owned by them। It is the opposite of buying a house on loan, where you pay an EMI (equated monthly instalment) to your bank. Technically, till you repay the loan, the house belongs to the bank. In reverse mortgage, you agree to mortgage your house to the bank, for which, it pays you the proceeds in equal monthly payouts. (Read more)

Registration of marriage made compulsory

The Hon. Supreme Court of India in the judgment passed in “ Seema Vs Ashwini Kumar” held that marriages of persons who are citizens if India belonging to various religions should be made compulsorily registrable in their respective States, where in the marriage is solemnized and the Apex Court directed the Sates and the Central Government to take the necessary steps for implementing the Court’s direction. Accordingly on 16.11.2006 the Government of Kerala published in the official Gazette the following Rules for implementing the directives of the Supreme Court. These Rules are to come into force after the expiry of sixty days from the date of publication.
(Read more)Publish

India Budget 2007 - Highlights

Proposals for Personal Taxes

• TDS exemption limit increased from Rs. 5,000 to Rs. 10,000 on interest from Banks and Post Offices.
• TDS made applicable on interest on 8% Savings (Taxable) Bonds.
• Certain personal effects such as paintings, sculptures proposed to be covered within the definition of capital assets and brought within the ambit of capital gains tax.
  

Tax Rates

• Introduction of secondary and higher education cess of 1% resulting in increase in education cess from 2% to 3%. The increase in education cess has resulted into marginal increase in overall tax rates.
• No surcharge to be levied on domestic companies, partnership firms andforeign companies having total income up to Rs. 1,00,00,000, resulting in an effective tax rate of 30.90% for domestic companies and firms and 41.20% for foreign companies.
• Effective tax rate for domestic companies and firms having taxable income exceeding Rs. 1,00,00,000 increased marginally from 33.66% to 33.99% and for foreign companies from 41.82% to 42.23%.
• Basic exemption limit for individuals / HUFs increased by Rs. 10,000.
• Deduction for entire amount of interest paid on a loan taken for higher education of spouse and children.
• The limit of deduction under section 80D for premium towards mediclaim increased from Rs. 10,000 to Rs. 15,000.
  

read more at source (Manupathra)

The Kerala Joint Hindu Family System (ABOLITION) Act, 1975

Joint family System amoung Hindus of Kerala was abolished with effect from 01.12.1976 by Act 30 of 1976. Thereafter birth in family does not give rise to rights in property .On and after the commencement of this Act, one has no rights to claim any interest in any property of an ancestor during his or her lifetime which is founded on the mere fact that the claimant was born in the family of the ancestor shall be recognized in any court. Joint tenancy was replaced by tenancy in common:

(1) All members of an undivided Hindu family governed by the Mitakshara law holding any coparcenary property on the day this Act came into force would be deemed to hold it as tenants-in-common as if a partition has taken place among all the members of that undivided Hindu family as respects such property and as if each one of them is holding his or her share separately as full owner thereof. This however does not affect the right to maintenance or the right to marriage or funeral expenses out of the coparcenary property or the right to residence, if any, of the members of an undivided Hindu family, other than persons who have become entitled to hold their shares separately, and any such right can be enforced as if this Act had not been passed. (....read more)

Investigation of Title to Immovable Property & Issuing Certificate of Title

Title to immovable property is ascertained by perusing relevant “Documents” and “Deeds” pertaining to such property. The term “Document” has very wide import. Under general law ‘document’ means any matter expressed or described up on any substance by means of letters, figures or mark for the purpose of recording that matter. The dictionary meaning of ‘document’ is “a deed, writing, inscription, that furnishes evidence. This would mean that even a piece of paper on which something is written or typed or printed is to be treated as ‘document’. With the introduction of Cyber law, electronic documents are also now legally recognised in our country as having evidentiary value.

The documents relating to property or commercial transactions are generally called Instruments or Deeds .The Indian Stamp Act defines an “ Instrument ” to include every document by which any right or liability is purported to be created , transferred , limited , extended , extinguished or recorded . A testamentary document ( eg., a Will while the testator is alive ) an Award , Decrees and Judgments of Courts, Certificates of Shares , Share Warrants ,etc are not considered as Deeds. So is the case with land tax receipts, allotment letters etc.

The object of investigations of title is to ascertain the ownership and title of a given property, in most cases immovable in nature. The attributes of ownership are , (1)right to have and to get possession ; (2) right to prevent interference by others ; (3) Power of alienation (4) liberty of using the object according to owner’s will ;(5)liberty of enjoying the fruits and to avail of the object owned ;(6) liberty of changing its form and even destroying it (.... read more)

‘The Protection of Women from Domestic Violence Act 2005’

“A boon to the Indian Women, but a potential bane to the Indian Banker"

The Protection of Women from Domestic Violence Act 2005 ( DVA) came into force 26.10.2006. It is widely expected that DVA will go a long way to provide relief to women from domestic violence and enforce their ‘right to live’. Primarily DVA is meant to provide protection to the wife or female live-in partner from violence at the hands of husband or male live-in partner or relatives. DVA also extends its protection to women who are sisters, widows or mothers.

However in spite of the positive aspects enshrined in the enactment for protecting women’s rights DVA can have a negative impact on the real estate scenario especially on transactions of house-properties. DVA also can adversely affect (Public) Financial Institutions ( FIS) that now unhesitatingly advance hefty sums on the mortgage security of house-properties both for productive and non-productive purposes. See how and to what extent DVA can adversely affect FIS .

...read full article at our website

Right to Information

When does it come into force?

It comes into force on the 12th October, 2005 (120th day of its enactment on 15th June, 2005). Some provisions have come into force with immediate effect viz. obligations of public authorities [S.4(1)], designation of Public Information Officers and Assistant Public Information Officers[S.5(1) and 5(2)], constitution of Central Information Commission (S.12 and 13), constitution of State Information Commission (S.15 and 16), non-applicability of the Act to Intelligence and Security Organizations (S.24) and power to make rules to carry out the provisions of the Act (S.27 and 28).

Who is covered? The Act extends to the whole of India except the State of Jammu and Kashmir. [S.(12)]

What does information mean? Information means any material in any form including records, documents, memos, e-mails, opinions, advices, press releases, circulars, orders, logbooks, contracts, reports, papers, samples, models, data material held in any electronic form and information relating to any private body which can be accessed by a public authority under any other law for the time being in force but does not include "file notings" [S.2(f)].

What does Right to Information mean? It includes the right to -

inspect works, documents, records.

take notes, extracts or certified copies of documents or records.

take certified samples of material.

obtain information in form of printouts, diskettes, floppies, tapes, video cassettes or in any other electronic mode or through printouts.[S.2(j)]

source (click here):
Ministry of Personnel,Public Grievances and Pensions, Govt. of India

A Note on “ Kanam ”

“Kanam” was one of the modes of land tenures prevalent in the erstwhile Malabar including the present Kozhikode District. It was the ‘highest’ form of tenancy. The holder of Kanam right in course of time acquired superior powers as against the real owner who had granted the kanam right.

Kanam entrustment was usually for a period of twelve years. Kanom entrustment was renewable at the option of the tenant after the expiry of 12 years The holder was free to make any improvement in the Kanam property and enjoy the fruits of the same by paying a comparatively small amount as yearly rent and a nominal share of the crops. If the land lord desired to resume the land at the expiry of the lease-period , he had to pay the full value of all the improvements made by the holder of Kanam. It was also a transferable right. The net result was that in most cases landlords were totally incapable of resuming the land after paying value of improvements to the Kanamdar ( lessee ) and the Kanamdar in most cases became richer and more powerful than the land lords and “Kanam” right became more valuable than the Jenm right itself. For, the Jenmi ( land lord) could claim right over the ‘land’ only while the Kanamdar had the full right over the trees, structures , buildings etc on the Kanam land. It was very easy to purchase the Jenm right of a land while very many could not afford to purchase the improvements that belonged to the Kanamdar.

Kerala Land Reforms Act came into force in 1964. The right of the land lords and intermediaries on agricultural lands was taken over by the Government with effect from 01-01-1970.

After the said date the land lord’s right had to be purchased through Land Tribunals established for the said purpose . By virtue of the provisions of the said Act landlords were permanently barred from resuming leasehold properties including Kanam lands .Even the Government could not resume any agricultural land from the person in possession except on the ground that such person holds land in excess of the ceiling limits.

Jenm right is granted to cultivating tenants by “Certificates of Purchase ” issued by Land Tribunals. Since absence of Certificate does not affect the title and enjoyment of the property many people have not come forward to purchase the Jenm right. And absence of Jenm right does not affect the title over land in any way. Land Tribunals in the State are being closed down one after the other due to lack of sufficient work for the staff.

Certificates of Purchase issued by Land tribunals are treated as pucca Title Deeds. In the absence of any registered title deed, Certificate of Purchase alone is the document of title for all practical purposes like sale , mortgage etc. Hence it is the duty of any Purchaser or Mortgagee of immovable property to call for Certificate of Purchase also and obtain custody of the same, if available, in order to avoid any future disputes. However if it is assured that Certificate of Purchase is not issued at all in a particular case, the mortgagee/purchaser can proceed with the proposed transaction Hence absence of Certificate of Purchase is not a defect in title , while it will be treated as a lapse on the side of the mortgagee/transferee if Certificate of Purchase already issued also is not obtained and kept along with the registered Title Deed.

Adv. K.M.Mathew, Kottuppallil, KeralaLaw.com

Advocate K.M. Mathew MA. LLB., is the senior partner of KeralaLaw.com. He is a practicing lawyer based at District Court Centre Kozhikode since 1979. Formerly Additional Government Pleader and Additional Public Prosecutor at Kozikode Advocate K M Mathew is in the Panel of many leading Banks and Housing Financial Institutions. He is also Legal Advisor and Standing Counsel to many leading Builder Firms/Companies and Real Estate Developers. Through this blog he aims at publishing online legal literacy materials relevant to the State of Kerala in India.

Mathew Associates, Calicut

Mathew Associates Calicut is a Law Firm engaged in imparting legal know-how on every day transactions affecting the common man. Our motto is to provide Legal Consultancy and Documentation Services at an affordable fee. We also provide specialized services to Banks, Housing Finance Companies, Builders, Real Estate Developers, Land Owners, Buyers/Sellers of Landed Properties etc. We deal with the practical aspects of the various laws applicable in the State of Kerala, India. We plan to publish online legal literacy materials from time to time.