Property Law in Nepal: Best Property Lawyers in Nepal (2024)

This Article covers the Property Law of Nepal, our Services under Property Law, our vast experience as Best Property Lawyers in Nepal and the process of filing Property cases in Nepal. The Firm has seasoned lawyers with vast range of Practice under property Law. 

Property law is the area of law by which property transactions are structured and disputes related to the property are to be resolved. This includes all the matter related to property (real estate) i.e. property settlement, buying and selling of houses or land, drawing up contracts between tenants and landlords, protection of intellectual property, etc.  In Nepal, the provisions related to property law have been enshrined in Part 4 of Muluki Civil Code, 2074.

1. Introduction to Property Lawyer in Nepal

Property Lawyer in Nepal offer a comprehensive framework governing the rights, obligations, and transactions related to various forms of property, both movable and immovable. Property in Nepal encompasses a broad spectrum of assets, including cash, goods, and actions that hold value and can be utilized or transacted. Ownership confers legal rights and responsibilities over property, including the ability to use, transfer, or derive benefits from it. Possession grants individuals certain rights over property, subject to applicable laws and contracts.

2. General Provisions of Property

Cash, goods, or actions that can be used, transacted, or derive benefits from are considered property, unless stated otherwise. “Goods” refer to physically purchasable or sellable items. Property is categorized as movable or immovable regardless of its physical form. Property is classified as private, common, joint, community, public, government, or trust property, depending on ownership and usage. Immovable Properties include buildings, attached goods, minerals embedded in land, natural water bodies, and certain structures permanently affixed to float over water. Movable Property encompasses cash, goods for transaction, precious items, intellectual property, securities, goodwill, and properties other than immovable ones. Owners can separate their share with unanimous consent or through sale if separation causes significant loss or disorder.

3. Ownership and Possession Law in Nepal

Ownership is established when a person acquires legal rights in any property according to the law with rights such as including the ability to use the property, transfer its title, mortgage or pledge it, deal with it in various ways, take benefits from it, construct physical structures or boundaries on it, and even take legal action regarding its acquisition or security.

Both individuals and their agents can acquire possessory rights, and even those who are legally incompetent can do so through their guardians. The possessor of a property enjoys certain rights, including the uninterrupted possession and usage of the property, subject to applicable laws or contracts.

Additionally, if a person gains possessory rights over another’s property in good faith, they may be entitled to reimbursement for essential expenses incurred in managing, maintaining, or caring for the property while under their possession.

Moreover, adverse possessory rights may be acquired by a person who has possessed movable property for more than three years or land for more than thirty years, as if it were their own. However, this does not apply to government, public, community, or trust lands, and certain conditions must be met for such rights to be recognized.

4. Government, Public and Community Property

Government property, as defined, includes assets such as government buildings, roads, forests, rivers, mines, and others that are owned or controlled by the Government of Nepal. Public property encompasses assets serving public purposes, including ancient roads, wells, religious sites, markets, and more, with ownership vested in the public body or government.

Community property refers to land and structures collectively owned by a community for their shared use and benefit. The Land Revenue Office is tasked with updating details of government and public properties, with assistance from the Local Level authorities. Entities holding rights, possession, custody, or control over government, public, or community properties are obligated to ensure their protection and preservation.

Unauthorized actions such as registration, possession, cultivation, or construction on government, public, or community lands without proper permission are strictly prohibited. Complainants reporting violations related to property misuse may be eligible for rewards if their complaints are verified and proven to be true. Government attorneys are empowered to take legal action against violations affecting government or public properties.

5. Trust, Usufruct and Servitude

A trust is considered established when a person makes arrangements for another to manage a property owned by them for the benefit of a beneficiary. Trusts can be either public or private, with public trusts aimed at various social, economic, and community development objectives, while private trusts cater to specific individuals or groups.

Individuals intending to establish a trust must submit an application to the Registrar detailing property value, beneficiaries, trust duration, and other relevant information, along with necessary documents. The memorandum of incorporation of a trust must include details such as founders’ information, trust objectives, trustee details, beneficiary information, and operational guidelines.

Upon application submission, the Registrar assesses trust objectives and property details, registering the trust within 35 days if deemed appropriate, granting a registration certificate.

Usufruct is established when a property owner grants another person the right to use and benefit from their property through a contract. The owner of immovable property must create a legal document when granting usufruct rights, and in the case of property held in common, the consent of all owners within a joint family is required.

6. House Rent Law in Nepal

When a person with the right, possession, or ownership of a house lends it to another for a rent, it is considered a rental agreement. Renting or taking on rent a house unfit for human habitation from health and security perspectives is prohibited.

The owner must enter a written agreement with the tenant, detailing various aspects such as names, addresses, rent amount, payment method, and other relevant matters. Owners must allow tenants to use the house as agreed, provide necessary utilities, ensure tenant safety, and abide by the rental agreement.

Tenants must pay rent promptly, maintain the rented house, not cause disturbance to others, and adhere to the rental agreement. Tenants may sublet with owner consent, with obligations to inform the owner and maintain terms of the original agreement. Tenants must use the house as agreed and cannot use it for unauthorized purposes.

The rental agreement terminates under various circumstances, including expiration, mutual consent, or eviction. Tenants must hand over the rented house and goods in good condition upon leaving.

7. Transfer and Acquisition of Property in Nepal

Any action such as sale, donation, gift, or other transfers of property signifies a transfer of ownership rights. Individuals who are legally competent can transfer property either immediately or through a will. Certain transactions, like gifts below a certain value or transfers of movable property, may not require a formal deed.

Guardians or curators may sell property on behalf of those under their care, subject to legal provisions. Once property is transferred, the ownership rights shift to the transferee, either immediately or upon the death of the transferor. Certain restrictions exist, such as prohibitions on transferring common property without consent or transferring property already owned by another.

Restrictions apply to property transfers involving foreigners, requiring government permission. Foreigners acquiring property must transfer it to Nepali citizens within specified timeframes, or it may revert to government ownership.

8. Registration of Deeds in Nepal

Once a deed is approved by the designated office, it is considered registered. Certain types of deeds, such as those involving property transfers, mortgages, donations, exchanges, partitions, trusts, and leases above a certain rent threshold, must be registered to be legally recognized.

Individuals may also choose to register deeds not explicitly mentioned in the law. Deeds can be registered through a commission appointed by the office, with fees deposited by the applicant. Parties may register deeds in a district other than their residence or where the property is located, with the concerned office of that district.

Fees are typically paid by the parties involved in the transaction, as specified in the deed. The office responsible for registration must promptly execute transmission and registration of matters related to the deed, with priority given to deeds registered earlier.

9. Our Services

9.1 Land Purchase and Sale

Our service facilitates seamless land transactions, handling the complexities of title searches, due diligence, and contract drafting. We ensure buyers and sellers navigate legal requirements smoothly. We ensure buyers and sellers navigate legal requirements smoothly.

9.2 Property Agreements

We are adept at crafting meticulous property agreements tailored to client specifications, we cover a range of arrangements including leases, purchase agreements, and joint ventures.

9.3 Partition of Property

We specialize in resolving disputes over shared properties, employing negotiation, mediation, or litigation to achieve equitable partitioning. Our approach prioritizes amicable resolutions while advocating fiercely.

9.4 Property Registration and Transfer

We handle the relevant details of Property Registration and Transfer. We guide clients through the process with precision, ensuring compliance with all legal requirements. We streamline the transfer of property titles efficiently from documentation to Government Filings.

9.5 Property Boundary Dispute

Our team adeptly navigates boundary disputes, employing legal expertise and surveying resources to clarify property lines and resolve conflicts. We strive for equitable solutions, and protecting clients’ property rights.

9.6 Construction Dispute

We offer comprehensive Legal Support for Construction-Relates Conflicts and represent clients in negotiations, arbitration, or litigation to resolve disputes efficiently.

9.7 Property Taxation

We provide tailored advice on property tax matters and compliance relevant laws and regulations. Our team assists with Property Taxation.

10. Types of Property Based on Mobility

The primary property law in Nepal, the National Civil Code of 2074, classifies property into two types based on their mobility in Part 4, Laws Relating to Property, Chapter 1, General Provisions Relating to Property, Section 252.

10.1 Movable Property

Section 253 of the National Civil Code classifies the following properties as immovable:

1.    Buildings, Land, and Structures

2.    Goods permanently attached, including floating permanent structures

3.    Mines, Stones, Minerals, Natural/Surface/Underground Water

4.    Trees, Plants, Crops, etc.

10.2 Immovable Property

Section 254 of the National Civil Code classifies the following properties as movable:

1.    Cash, Goods, Gold, Silver, Jewelry, Ornaments, Precious Stones, and other movable goods

2.    Bonds, Securities, Bills of Exchange, Letters of Credit, Promissory Notes, and other negotiable instruments

3.    Intellectual Property, Rights in Security, Trade Good-Will, or Franchise 

4.    Properties that are not classified as immovable property

10.3 Types of Property Based on Ownership

National Civil Code Section 255 classifies property into seven different types based on ownership and the form of use:

1.    Private Property: Property earned or acquired by an individual

2.    Property in Common: Property owned by coparceners

3.    Joint Property: Property owned by two or more persons, excluding coparceners

4.    Community Property: Properties collectively owned by a specific area or community

5.    Public Property: Property designated for public use

6.    Government Property: Property controlled and/or owned by the government

7.    Trust Property: Property belonging to a specific trust.

11. Property Rights in Nepal

Sections 276 to 284 of the National Civil Code outline the conferred rights and duties of property owners in Nepal. If an individual possesses certain property, they are entitled to exercise specific rights, while others have particular duties to fulfill concerning the property in Nepal. The property rights in Nepal encompass the following:

1.    If one owns property in Nepal, no one can utilize or acquire it without the consent of the property owner. The Government of Nepal can requisition private property for public interest.

2.    The exit of one’s house or the boundaries of one’s land, which affect the exit of the property owner, cannot be closed or obstructed by anyone else.

3.    For a house owner in Nepal, no individual can enter the house or its compound without the owner’s consent, except when the law permits.

4.    In the case of lands or other forms of property ownership, no one is permitted to encroach, trespass, or take possession of the property.

5.    Within Nepal, constructing a house necessitates obtaining written consent from the landowner. Failure to do so allows the landowner to acquire the property at a price 25% lower than the market value.

6.    House owners are prohibited from directing water toward other properties, houses, lands, or roads. Constructing a septic tank near neighboring lands is also prohibited. Additionally, a minimum distance of one meter from neighboring lands must be maintained when building a well.

 

7.    Planting trees or other vegetation in a manner that could damage other properties, houses, lands, or possessions is prohibited.

12. Filing Property Cases in Nepal

Individuals seeking to file property-related cases in Nepal must initiate legal proceedings within six months from the occurrence of the unlawful action by the opposing party. However, for cases concerning the partition of property in Nepal, such cases must be filed within three months of the event.

13. Partition of Property

As a general rule, property can be partitioned in Nepal through mutual agreement among coparceners (individuals set to inherit the property). This typically entails executing a written deed in the presence of witnesses and registering it with the relevant authority. All coparceners, irrespective of gender, must receive equal shares of the property. 

Nonetheless, if any coparcener chooses not to claim their share, they can waive their rights via a signed deed, relinquishing specific or all portions of the property. 

However, if disputes arise concerning particular plots of land, the contested land can remain undivided while the other portions of the property are distributed. The resolution of the disputed land case falls under the jurisdiction of the District Court.

14. Conclusion

Property law in Nepalconstitutes a comprehensive and interpersonal facet of civil law that has been comprehensively addressed by the National Civil Code of 2074. Property encompasses monetary assets, goods, or actions that are subject to trade or transfer for the purpose of deriving benefits. Property law in Nepal is intrinsically practical and necessitates legal expertise in both procedural and theoretical aspects, ideally guided by proficient legal practitioners. 

Property encompasses cash, goods, and actions with value and utility. Ownership entails legal rights such as usage, transfer, and benefit derivation. Property is classified into movable and immovable, private, public, government, or trust-owned. Ownership rights include usage, transfer, mortgage, and legal action. Possession grants rights subject to laws and contracts. Government, public, and community properties have specific regulations. Trusts, usufruct, and rental agreements are governed by detailed laws.

Frequently Asked Questions

Property disputes in Nepal can be resolved through legal proceedings initiated within six months from the occurrence of the unlawful action. For partition cases, legal action must be taken within three months.

Imperial Law Associates, as the best Law Firm in Nepal, offer services such as land purchase and sale assistance, property agreements drafting, partition of property resolution, property registration and transfer facilitation, handling property boundary disputes, construction dispute resolution, and property taxation advice.

Property transactions and disputes in Nepal are governed by the Muluki Civil Code, 2074, specifically Part 4 which outlines provisions related to property law.

Ownership confers rights such as usage, transfer, mortgage, and legal action, while possession grants rights including uninterrupted usage and subject to applicable laws and contracts.

Nepalese law recognizes movable and immovable property, categorized based on their mobility, as well as private, public, government, and trust-owned properties.

Government, public, and community properties in Nepal are regulated to ensure their protection and preservation. Unauthorized actions on these properties are strictly prohibited, and legal action can be taken against violations.

In Nepal, property is classified into seven types based on ownership and usage: private property, property in common, joint property, community property, public property, government property, and trust property.

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