02 August 2023

Navigating the Legal Aspects of Property Transactions in Bangladesh

With the development of more real estate in Bangladesh, the country is experiencing a surge in foreign investment. This industry is the largest employer and a significant contributor to economic growth. However, as the saying goes, disputes tend to arise where there is interest, and this also applies to the real estate sector. In addition to the increase in property transactions, complex financial arrangements are leading to disputes.

So one must consider various factors, including legal implications, especially when transferring ownership. Navigating the legal aspects of property transactions isn’t as straightforward as it seems. It involves a lot of legal jargon that might fly over your head. This article aims to educate you on the legal aspects of property transactions in Bangladesh. 

Unraveling the Legal Maze of Property Transactions in Bangladesh

In Bangladesh, property law is a crucial field of law that deals with land-related disputes and property transactions. Individuals can protect their property rights by following the relevant land laws. To understand one’s rights better, it is essential to comprehend the legal aspects of Bangladeshi property law. This article covers the Transfer of Property Act of 1882, modes of transportation, and the land registration process, shedding light on the legal aspects of real estate transactions in Bangladesh.

The Legal Acts of Property Transactions in Bangladesh

The Transfer of Property Act 1882 is responsible for governing property transfers and transactions in Bangladesh. The act defines “transfer of property” as the process by which an individual transfers property to themselves, one or more living individuals, or to themselves and one or more living individuals in the future. The term “to transfer property” refers to the execution of this process. In this act, “living person” encompasses businesses, associations, and groups of people.

According to the Transfer of Property Act, the property falls into two main categories:

Immovable Property: Although it does not define this term, the Transfer of Property Act provides an in-depth explanation of the immovable property. The law stipulates in Section 3 that immovable property excludes grass, crops in growth, and standing trees.

Movable Property: The definition of “movable property” in the Movable Property Act is extremely ambiguous and falls short of defining the phrase “immovable property” in a suitable sense.

Modes of Transfer Property: A seller should be guided the right way to navigate through the processes of selling a land, as there are four main methods through which property can be transferred: sale, lease, exchange, and gift. Additionally, inheritance and mortgages are also common ways of transferring property.

Sale: When ownership of a property is exchanged for payment, it is considered a sale. However, a sale cannot be completed without a price agreed upon by both the buyer and seller. A contract for sale is created when the decision to sell and buy is made, but it does not transfer ownership. Instead, it establishes a personal responsibility between the two parties. To ensure the transfer of ownership, the contract must be registered with the appropriate Sub Registry Office. It’s important to note that the ownership of a property cannot be transferred through a contract unless it is written and registered in accordance with the Registration Act of 1908.

Lease: A property lease is an agreement where the right to use a property is transferred for a specified period or indefinitely in exchange for payment or other valuable assets. It is outlined in Section 105 of the Act. The lease agreement involves two parties: the lessor (also known as the transferor) and the lessee (also referred to as the transferee). The price, in the case of a lease, is known as the premium. Rent, on the other hand, refers to any payment made in exchange for a service within the context of a lease.

When an agreement does not explicitly state the length of a lease for agricultural and manufacturing purposes, it is considered a year-to-year lease that can be terminated by either party with a six-month notice. For all other purposes, the lease is month-to-month, and either party can end it with a fifteen-day notice. (Sec.106)

To lease a property for one year or more, only a registered document can be used. For leases shorter than one year, the agreement can be made orally at the time of surrendering possession or through a registered instrument. (Sec.107)

There are eight ways in which lease determination can occur. These include-

  • The passage of time,
  • The occurrence of a specific event, 
  • The cessation of the lessor’s interest in the property,  
  • The interests of the lessor and lessee becoming vested in one person in the same right,
  • Express surrender,  
  • Inferred surrender,
  • Forfeiture, which happens when the lessor violates an express requirement, 
  • After the expiration of any party’s notification to end the leasing agreement.

Exchange: In an exchange, two parties come to an agreement to swap ownership of their possessions with each other in return for cash or both items. This is explained in Section 118 of the Act. The item being exchanged doesn’t have to be immovable. The rules and procedures that apply to sales also apply to exchange transactions.

Gift: A gift is when someone voluntarily and without compensation transfers a specific movable item to another person, known as the donee, who accepts it on their own behalf or someone else’s. This type of transfer is defined in Section 122 of the Act. The parties involved are the donor, who is the person making the gift, and the donee, who is the person accepting it. The gift must be accepted while the donor is still alive, otherwise, it is considered invalid.

Mortgage: Section 58(a) of the Act defines a mortgage as a transfer of interest in a real estate property to guarantee loan repayment. In this transaction, the transferor is called the mortgagor, while the transferee is referred to as the mortgagee. The mortgage money is the principal and interest payments secured in this agreement, and the legal document used to finalize the deal is called the mortgage deed. To complete the mortgage, three things are required: the transfer of interest in a specified immovable property, and a debt-securing purpose.

If the sum assured in a mortgage is 100 or more, all forms of mortgage, except for the one by deposit of title deeds, must be made through a registered instrument. Even if the amount is less than one hundred, a simple mortgage can only be affected by registered documents. When registration is required, it must be in writing, signed by the mortgagor, and registered according to the rules of the Registration Act. Additionally, it must be certified by at least two competent parties. The six types of mortgages are Simple Mortgage, Mortgage by Conditional Sale, Usufructuary Mortgage, English Mortgage, Mortgage by deposit of title deeds, and Anomalous Mortgage.

Inheritance: In Bangladesh, the rules of inheritance are determined by one’s religion. If the deceased person was a follower of Islam, their estate will be divided according to Islamic inheritance law. If they follow Hinduism or Buddhism, their property will be divided in accordance with Hindu law. However, the Succession Act of 1925 mainly applies to those who do not practice any of these religions.

Even if the deceased person was residing in another country at the time of their death, their immovable property in Bangladesh will still be subject to the country’s inheritance laws.

Land Registration Process

To complete the ownership transfer process, you are required to follow these steps:

  1. Verify the Record of Rights obtained from the Ministry of Land’s Land Office.
  2. Conduct a property mutation.
  3. Obtain an RS mutation inspection.
  4. Visit the sub-registry office to collect the Non-Encumbrance Certificate (NEC).
  5. Create the transfer deed and pay the necessary stamp tax.
  6. Pay the required taxes, fees, and VAT at a specified bank.
  7. Submit registration requests at the sub-registry office.
  8. Inform the Land Revenue Office about the ownership change.

It is important to know the essential terms and adhere to these steps to successfully transfer the property’s ownership.

If you’re looking for help with a real estate transaction, Mir Real Estate can provide expert guidance. They are highly skilled professionals in the field who can assist you with your real estate deals.


Being able to own property provides us with security and a way to support ourselves, which is crucial for our economic and social well-being. However, deciding to purchase land can be challenging. This article explores the legal aspects of property transactions in Bangladesh.

The article covers the Transfer of Property Act of 1882 and transfer methods like sale, lease, gift, exchange, mortgage, and inheritance. After purchasing land, the buyer or their representative must register the land under the new owner’s name. The initial stage of the legal process is significant. Despite its apparent complexity, Bangladesh’s land registration system is straightforward once you are familiar with it.

Frequently Asked Questions (FAQs)

  • What is the Transfer of Property Act 1882 in Bangladesh? 

This act governs all real estate transactions in the country. It defines “transfer of property” as the act of giving property to oneself, one or more living individuals, or oneself and one or more living individuals in the future.

  • What are the modes of transferring property?

There are four primary ways to transfer property: sale, lease, exchange, and gift. Inheritance and mortgages are also common methods. 


  • What are the two main types of property? 

Property can be classified into two categories: immovable and mobile.

  • How is property transferred in terms of inheritance?

In Bangladesh, inheritance laws are determined by an individual’s faith. Nevertheless, the Succession Act of 1925 mainly impacts individuals who do not have a religious affiliation.

  • What is the transfer of property by sale?

When property ownership is transferred in exchange for money, it is considered a sale. However, in order for the transaction to proceed, both the buyer and seller must agree on a price.


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