Property Registration in India ensures the ownership rights to the person in whose name the property is registered. The entire process of land registry or house registry can be quite a nuisance if you do not have a real estate attorney briefing you about the legal formalities and documentation procedures to be followed. You will find many private service lawyers or government attorneys who can advice you on the legal matters. One place to get info on these would be our website Indiahousing.com where we give you listings of top home registration attorneys in India and other would be the registration and attorneys directory available at the local registry and revenue office.
All kinds of property registration and firm registration in India are done at the Sub Registrars office that also holds all records of any previously registered property in India.
House Registration Process in India
The exact process includes 6 steps:
Step 1: Search the Property Registration
The property location, legal ownership document, date of purchase of the title, property transfer and inheritance issues, if transferred the legal authority of the transferee, clearance certificate from urban land ceilings authorities, payment of all dues like property taxes, electricity and water bills and any previous alterations in the property registration are the points that require careful scanning. This entire process can cost up to Rs. 10,000 and take 5-7 days to complete.
Step 2: House Registration Agreement
This process takes place at the Local Stamp Duty Office and takes around 7 days to complete. The fee involved is Rs. 100.
Step 3: Preparation of Property Sale Deed
This is done by an authorized house registration attorney on behalf of the purchaser. The final deed is printed out on a green paper with stamp duty stamp affixed on it. This involves a fee of 1% of the property value and might take 7 days again.
Step 4: Final Registration
The house registry or land registry is then stamped, executed, and finally registered in the presence of seller, buyer and two witnesses at the office of the SUB Registrar of Assurances at 5% market value of the property as Stamp Duty. This process takes just 2 days to complete.
Step 5: Submission of Documents
The completed home registry is then submitted to the Reader of the Sub Registrar of Assurances for scrutiny. Then at the payment of 1% of the transaction value or Rs. 30,000 whichever is less, the documents are presented before the Sub Registrar. The seller then hands over possession of the property to the buyer. The documents are handed over to the buyer within 30 minutes of submission of the payments receipt.
Step 6: Mutation of The Title of The Property
The purchaser now has to apply to the local Municipal Authority to get the title of the concerned property mutated in his favor with all the relevant documents that your Real estate attorney would guide you about. The Municipal Authority then assigns the property value for levying property tax and then issue a letter of mutation in favor of the purchaser.
Much of the over 100 laws governing various aspects of real estate in india dates back to the 19th century and major amendments to existing laws are required to make them relevant to modern day requirements. The Central laws governing real estate include:
Registration Act, 1908
The purpose of this Act is the conservation of evidence, assurances, title, publication of documents and prevention of fraud. It details the formalities for registering an instrument. Instruments which it is mandatory to register include:
(a) Instruments of gift of immovable property;
(b) other non-testamentary instruments which purport or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, to or in immovable property;
(c) non-testamentary instruments which acknowledge the receipt or payment of any consideration on account of instruments in (2) above.
(d) leases of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent
Sales, mortgages (other than by way of deposit of title deeds) and exchanges of immovable property are required to be registered by virtue of the Transfer of Property Act. Evidently, therefore, all the above documents have to be in writing.
Section 17 of the Act provides for optional registration. An unregistered document will not affect the property comprised in it, nor be received as evidence of any transaction affecting such property (except as evidence of a contract in a suit for specific performance or as evidence of part-performance under the Transfer of Property Act or as collateral), unless it has been registered. Thus the doctrine of part performance dealt with under Section 53 A of the Transfer of Property Act and the provision of Section 49 of the Registration Act (which provide that an unregistered document cannot be admissible as evidence in a court of law except as secondary evidence under the Indian Evidence Act) together protect the buyer in possession of an unregistered sale deed and cannot be dispossessed. The net effect has been that a large number of property transactions have been accomplished without proper registration. Further other instruments such as Agreement to Sell, General Power of Attorney and Will have been indiscriminately used to effect change of ownership.
Urban Land (Ceiling And Regulation) Act
(ULCRA), 1976
This legislation fixed a ceiling on the vacant urban land that a 'person' in urban agglomerations can acquire and hold. A person is defined to include an individual, a family, a firm, a company, or an association or body of individuals, whether incorporated or not. This ceiling limit ranges from 500-2,000 square meters (sq. m). Excess vacant land is either to be surrendered to the Competent Authority appointed under the Act for a small compensation, or to be developed by its holder only for specified purposes. The Act provides for appropriate documents to show that the provisions of this Act are not attracted or should be produced to the Registering officer before registering instruments compulsorily registrable under the Registration Act.
The objective of acquiring the excess vacant land could not be achieved because of intrinsic deficiencies in the legislation itself.
This legislation was repealed by the Centre in 1999. The Repeal Act, however, shall not affect the vesting of the vacant land, which has already been taken possession by the State Government or any person duly authorised by the State Government in this regard under the provisions of ULCRA. The repeal of the Act, it is believed, has eliminated the large amount of litigation and released huge chunks of land into the market. However the repeal of the Act has not been carried out in all states. Initially the repeal Act was applicable in Haryana, Punjab and all the Union Territories. Subsequently, it has been adopted by the State Governments of Uttar Pradesh, Gujarat, Karnataka, Madhya Pradesh and Rajasthan. Andhra Pradesh, Assam, Bihar, Maharashtra, Orissa and West Bengal have not adopted the Repeal Act so far.
Stamp Duty
There is a direct link between Registration Act and Stamp Act. Stamp duty needs to be paid on all documents which are registered and the rate varies from state to state. With stamp duty rates of 13 per cent in Delhi, 14.5 per cent in Uttar Pradesh and 12.5 per cent in Haryana, India has perhaps one of the highest levels of stamp duty. Some states even have double stamp incidence, first on land and then on its development. In contrast the maximum rate levied in most developed markets whether in Singapore or Europe is in the range of 1-2 per cent. Even the National Housing and Habitat Policy, 1998, recommended a stamp duty rate of 2-3 per cent. Most of the methods to avoid registration are basically to avoid payment of high stamp duty.
Rent Control Act
Rent legislation in India has been in existence for a very long time. Rent control by the government initially came as a temporary measure to protect the exploitation of tenants by landlords after the Second World War. However these rent control acts became almost a permanent feature. Rent legislation provides payment of fair rent to landlords and protection of tenants against eviction. Besides, it effectively allows the tenant to alienate rented property.
Property Tax
Property tax is a levy charged by the municipal authorities for the upkeep of basic civic services in the city. In India it is the owners of property who are liable for the payment of municipal taxes whereas in countries like the United Kingdom, the occupier is liable. Generally, the property tax is levied on the basis of reasonable rent at which the property might be let from year to year. The reasonable rent can be actual rent if it is found to be fair and reasonable. In the case of un-let proper-ties, the rental value is to be estimated on the basis of letting rates in the locality.
