(B) Transfer of immoveable propertyCentral

Section 49 of The Transfer of Property Act, 1882

Where immoveable property is transferred for consideration, and such property or any part thereof is at the date of the transfer insured against loss or damage by fire, the transferee, in case of such loss or damage, may, in the absence of a contract to the contrary, require any money which the transferor actually receives under the policy, or so much thereof as may be necessary, to be applied in reinstating the property.

Summary

This provision applies when a land or building is transferred for money while it is insured against loss or damage by fire.
If the property suffers fire loss or damage after the transfer, the new owner can require any insurance money received by the seller to be used to rebuild or repair the property.
This right is subject to any contract to the contrary between the seller and the buyer.

Practical examples

1Ajay sells a house to Baldev for fifty thousand rupees on April 1, 2026. The house is insured against fire by Ajay at the time of sale. On May 1, 2026, a fire damages the kitchen. Under this rule, Baldev can demand that the insurance money Ajay receives be spent on repairing the kitchen.

2Clara buys a warehouse from David on June 10, 2026. The warehouse was insured against fire. A fire occurs, and David receives insurance compensation. In the absence of an agreement saying otherwise, Clara has the right to require David to apply that money to restore the warehouse.

FAQ

1. What right does a buyer have under Section 49 of the Transfer of Property Act, 1882 regarding fire insurance?

Under Section 49 of the Transfer of Property Act, 1882, the buyer has the right to require any fire insurance money received by the seller to be applied to rebuild or repair the damaged property.

2. Does Section 49 of the Transfer of Property Act, 1882 apply if the property is transferred as a free gift?

No, Section 49 of the Transfer of Property Act, 1882 applies only when the land or building is transferred for consideration, which means in exchange for value or money.

3. Can the parties agree to opt out of Section 49 of the Transfer of Property Act, 1882?

Yes, Section 49 of the Transfer of Property Act, 1882 states that this right exists in the absence of a contract to the contrary.

Test yourself

Q1.Under Section 49 of the Transfer of Property Act, 1882, what kind of insurance risk is specifically covered by the transferee's right?

Q2.What is a necessary condition for a buyer to claim rights under Section 49 of the Transfer of Property Act, 1882?

Q3.Under Section 49 of the Transfer of Property Act, 1882, how must the insurance money received by the transferor be applied if the transferee demands it?

Q4.Does Section 49 of the Transfer of Property Act, 1882 allow a buyer to demand the entire insurance payout if it exceeds the cost of repairs?

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