Transfer of Title

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In commercial law, the transfer of title is another important aspect of the business. Transferring of title signifies the sole legal owner of the property.

The legal ownership of any item purchased is known as the title for that particular item. Title and risk go hand in hand. When there is a transfer of the title, there is a subsequent transfer of the risk too.


Transfer of Title

The "Transfer of Title" is an important legal component of the sale of goods and this is to be discussed with the law relating to the sale of goods. The person is required to transfer the title of the goods to the purchaser. Without transferring the ownership and delivery of possession of the goods from the seller to buyer, there will be incomplete sale transactions. The real owner of the goods (seller) can transfer the title to a new owner (buyer). 

The transfer of title includes the maxim’ Nemo dat quod non habet.’ This means if somebody is not the legit owner of goods, he cannot dispatch the same to somebody else. This is devised to protect the original owners of goods. Anybody selling goods without the permission of the legitimate owner, the transaction will be void (unlawful) and there will be no title passed to the purchaser. This legal rule is known as the nemo dat rule.


Title Transfer Paperwork

Let us take the transfer of ownership of a car as an example.

For selling the car, it is mandatory to get the ownership of the vehicle transferred to the name of the buyer. Vehicle ownership transfer is called the RC Transfer, this is important as it ensures that the vehicle and all legal duties concerning it are transferred to the buyer. 


Following Documents Are Required For The Transfer of Title Regarding The Vehicle

  1. RC – The original Registration Certificate

  2. Form 29 – Notice to change the ownership of Car

  3. Form 30 – Report of the transfer of the ownership

  4. Form 28 – NOC (No Objection Certificate)

  5. Residential Proof

  6. Report of N.C.R.B

  7. Insurance

  8. PUC

  9. Transfer Fee


Title Transfer Document

When the car is sold, the ownership is transferred to the buyer. For the same purpose, it is needed to transfer the car registration to the new buyer.


Documents that are to be Submitted from the Seller’s End

  1. Original RC.

  2. Insurance policy 

  3. Letter for Clearance Certificate.

  4. Copy of PUC (Pollution under control)

  5. Road tax-related documents.

  6. Copy of delivery note of the vehicle.

  7. Owner’s manual of the vehicle which is being sold.

  8. All warranty related documents.

  9. Service history.

  10. Copy of the original invoice of the concerned vehicle.


Documents to be Retained by a Seller

  1. Signed sales agreement.

  2. KYC documents along with address proof.

  3. Demand Draft copy or cheque.


Title and Transfer

A title is a legal document that shows legal ownership to a property or an asset. A title can only represent ownership of a real asset such as a car or an intangible property or assets such as trademarks or patents. A title generally shows the ownership of property rights of an individual or of the business, which is the ownership of resources whether they're tangible or intangible. Titles can be obtained by purchasing or inheriting as an estate.

In situations when a vehicle is owned to transfer the ownership to someone else (a second party), we only need to complete a title certificate. Once this has been filled out and the certificate is signed, the buyer or recipient shall take the title to a local DMV office and officially transfer ownership in its name.


Solved Example on Transfer of Title

Example of the transfer of title will be as follows:

Harry sells his cycle to Brad for Rs 20,000 and promises to deliver it within one week. Kim offers him Rs. 30,000 for the same cycle. Harry, who still has the possession, agrees to sell it to Kim. Does Kim get a good title?

Ans: Yes, Kim gets a good title. According to Section 30 (1), if this buyer acts in good faith and he is unaware of the earlier sale, he will have a good title to the particular goods even though the property in the goods was passed to the first buyer Brad. Harry, who still has the possession, agrees to sell it to Kim. So Kim gets a good title for the cycle.

Thus we see there are many related legal formalities formulated to transfer the title, which is made mandatory by the Indian Law.


FAQ (Frequently Asked Questions)

1. What is The Title of The Goods?

When ownership of a thing is passed from one person to another, “Seller and buyer agree that title for the contract of goods will pass to the buyer when they have been shipped from the seller's premises”

2. How is The Title Transferred to Another Person?

First, the seller needs to release the ownership of the property by signing the title. The buyer then takes the signed title, and the state issues a new registration and title in effect. Some states might require other additional paperwork to complete the process, such as a bill of sale or a transfer of ownership form.

3. Can a Person Transfer Property to Himself?

Yes, the transfer can be made by a person to himself, for instance when a person vests property in any trust and himself becomes the whole trustee of the same.