Section 37 of The Transfer of Property Act, 1882
When, in consequence of a transfer, property is divided and held in several shares, and thereupon the benefit of any obligation relating to the property as a whole passes from one to several owners of the property, the corresponding duty shall, in the absence of a contract to the contrary amongst the owners, be performed in favour of each of such owners in proportion to the value of his share in the property, provided that the duty can be severed and that the severance does not substantially increase the burden of the obligation; but if the duty cannot be severed, or if the severance would substantially increase the burden of the obligation the duty shall be performed for the benefit of such one of the several owners as they shall jointly designate for that purpose: Provided that no person on whom the burden of the obligation lies shall be answerable for failure to discharge it in manner provided by this section, unless and until he has had reasonable notice of the severance. Nothing in this section applies to leases for agricultural purposes unless and until the State Government by notification in the Official Gazette so directs. Illustrations
- (a)A sells to B, C and D a house situated in a village and leased to E at an annual rent of Rs. 30 and delivery of one fat sheep, B having provided half the purchase-money and C and D one quarter each. E, having notice of this, must pay Rs. 15 to B, Rs. 7.50 to C, and Rs. 7.50 to D, and must deliver the sheep according to the Joint direction of B, C and D.
- (b)In the same case, each house in the village being bound to provide ten days' labour each year on a duke to prevent inundation E had agreed as a term of his lease to perform this work for A. B, C and D severally require E to perform the ten days' work due on account of the house of each. E is not bound to do more than ten days' work in all, according to such directions as B, C and D may join in giving.
Summary
- When a property is divided and sold to multiple new owners, any benefits from agreements linked to that property are also split among the new owners.
- The person who owes the duty, such as a tenant who pays rent, must perform that duty for each new owner according to the value of their share, which is called apportionment or dividing benefits.
- This division of duties can only happen if the duty can easily be split up, which is called severance, without making the job significantly harder or more burdensome for the person doing it.
- If the duty cannot be split up, or if splitting it makes the work much harder, the new owners must jointly agree on one person to receive the benefit of that duty.
- The person who owes the duty is not liable for failing to split their performance until they receive reasonable notice about the property being divided.
- These rules do not apply to agricultural leases, which are agreements to rent farming land, unless the State Government publishes an official notice in the Gazette stating otherwise.
Practical examples
FAQ
1. How does rent get divided if a landlord sells different shares of a house under Section 37 of the Transfer of Property Act, 1882?
Under Section 37 of the Transfer of Property Act, 1882, if a landlord sells different shares of a leased house to new owners, the tenant must pay rent to each new owner in proportion to their share of the property, provided the tenant has received reasonable notice of the division.
2. What happens if an obligation on a divided property cannot be split under Section 37 of the Transfer of Property Act, 1882?
Under Section 37 of the Transfer of Property Act, 1882, if an obligation cannot be split, or if splitting it would significantly increase the burden on the person who has to perform it, the new owners must jointly designate one person to receive the benefit of that obligation.
3. Can a tenant be sued for paying full rent to the old landlord after a property sale under Section 37 of the Transfer of Property Act, 1882?
Under Section 37 of the Transfer of Property Act, 1882, a tenant is not liable for failing to pay the new owners in their proper shares unless and until the tenant has received reasonable notice of the property being divided.
4. Does Section 37 of the Transfer of Property Act, 1882 apply to agricultural leases automatically?
No, under Section 37 of the Transfer of Property Act, 1882, these rules of apportionment do not apply to agricultural leases unless the State Government issues a specific notification in the Official Gazette directing that they should apply.
Test yourself
Q1.Under Section 37 of the Transfer of Property Act, 1882, if a property is divided among multiple owners, how must a severable obligation be performed by the person bound by it?
Q2.Under Section 37 of the Transfer of Property Act, 1882, what is required before a person owing an obligation can be held liable for failing to perform it in divided shares?
Q3.Under Section 37 of the Transfer of Property Act, 1882, what happens if an obligation relating to a divided property cannot be severed without substantially increasing the burden?
Q4.Under Section 37 of the Transfer of Property Act, 1882, what is the default rule regarding the application of this section to leases meant for agricultural purposes?