In Focus

Duty To Disclose Material Defect In The Property Or Title

By Gajanan Khergamker

It is generally the prerogative of the buyer to find out the defects in a property before buying it and also to make the seller rectify such defects.

However, the rights of the buyer to seek reasonable clarification and raise reasonable doubts have been statutorily recognised by section 55 (1)(a) to (c) of the Transfer of Property Act (TOPA).

It is statutory duty of the seller to disclose to the buyer about the material defect in the property of title.

The defects are of two types, patent defect and latent defect.

Patent defect is one which is apparent and can be discovered by the purchaser with ordinary care. For example, dilapidated condition of the property, use of right of way by the third party etc.

Generally, the patent defects, which are within the knowledge or without the knowledge of seller, are covered by the maxim caveat emptor, and it is for the buyer to know such defects.

Latent defects are those which the purchaser cannot discover with ordinary care. The seller is duty bound to disclose such defects to the buyer. For ex: underground drainage, pipelines laid for public drainage/water supply etc.

Material defect in one which is known by the purchaser he general would not prefer to buy the property or something which is never intended to be brought from the seller in terms of nature of the contract.

What defect constitute a material defect is a question of fact and depends on the facts and circumstances of each case. (Sec 55 (1) (a) of the TOPA).

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