A popular quote written by anonymous says ‘Owning a home is a keystone of wealth…’.This is quite true especially in urban areas where every single person is juggling with daily life problems and being able to manage accommodation of his own is a dream come true for many”.  So, before achieving his dream of a home for himself and family, such a person has to arm himself with the knowledge of so many things before he starts his home-buying journey. As the transaction has major financial implications, the homebuyer would like to get some expert advice on a lot of things. If you are a person interested to purchase, rent or even transfer any immovable property, the following are some of the points which might you need to know….!

Planning To Buy a Property

  • What do you understand by property? What are its types?

According to the dictionary defines the term property means “  as a thing or things belonging to someone; or possessions collectively”.. In, general a  property is any physical or virtual entity that is owned by an individual or jointly by a group of individuals. If we try to make a proper analysis, the relation of humans with their habitat has been quite long. For humans, it is not something which is just a physical property, it is related to their economic, socio-political, religious and legal well- being.

TRADITIONAL ASPECTS   RELATED TO PROPERTY RIGHTS WHICH INCLUDES INCLUDE:

 By the term “ property” the basic idea is having sole and complete control over some “thing” on which the person has sole control. However, the following are the basic rights which come naturally with the ”property”:

1. CONTROL OVER THE USE OF THE PROPERTY.

2. RIGHT TO TAKE ANY BENEFIT.

3. RIGHT TO TRANSFER OR SELL.

4. RIGHT TO EXCLUDE OTHERS.

5. RIGHT OF EASEMENT.

DEFINITION OF PROPERTY:  

Maybe you don’t need opinion regarding the difference between a movable or immovable property but the laws in India have created a thin line between these two on the basis of their properties. Thus, various acts under the Constitution of India 1950  define “property” in their own way as follows:

1. Section  2(C) Of The Benami Transactions (Prohibition) Act, 1988 Defines  “Property” As-

“Property” Means Property Of Any Kind, Whether Movable Or Immovable, Tangible Or Intangible And Includes Any Right Or Interest In Such Property.”

2. Section 2 (11) of   THE SALE OF GOOD ACT, 1930 defines property as:  “Property means the general property in goods and not merely any special property.

3. Section  2(26) of the  GENERAL CLAUSES ACT 1897 “ defines “IMMOVABLE PROPERTY” as  “LAND BENEFITS” which arise out of the land and the things” THINGS ATTACHED TO THE EARTH “OR PERMANENTLY FASTENED “to” ANYTHING ATTACHED TO THE EARTH”. On the other hand ”MOVABLE PROPERTY “ MEANS “Property of every description other than the “IMMOVABLE PROPERTY”.

4. The TRANSFER OF PROPERTY ACT 1882 has further defined the term ”ATTACHED TO EARTH”. According to section 3 of the Act, the things understood to be attached to the earth which are-

a) ROOTED IN THE EARTH: Such as in the case of shrubs and trees. As per the Act, such things whose value gets reduced or who lose their characteristics once being severed from the earth shall be meant to be immovable property in nature. However, the value of timber, grass or growing crops doesn’t get reduced when severed from their original place and such come under the category of movable property.

b) EMBEDDED INSIDE THE EARTH: Things like buildings, windows, and walls shall lose their value if they are detached from the land they are embedded. Thus, they are considered immovable property.

c) ATTACHED TO WHAT IS EMBEDDED FOR THE PERMANENT AND BENEFICIAL ENJOYMENT OF THAT STRUCTURE TO WHICH SUCH THING IS ATTACHED: For eg., A swimming pool is attached to a permanent structure (say to land or building), if such attached thing shall be severed from it will have no value of its own neither it will be able to provide any further benefit. Thus, it shall be counted as immovable property.

5. Section 2(6) of the INDIAN REGISTRATION ACT 1905  defines “immovable property” as to what does an immovable property includes implying that whatever the latter doesn’t include constitutes a movable property”. According to the definition “Immovable property includes land, buildings, hereditary allowances, the right to the easement, fisheries, ferries or any other benefit arising out of lands and the things attached to the earth per permanently fastened to anything which is attached to the earth but not standing timber, crops or grass. Accordingly, the following have been held to be immovable property:

  • A RIGHT TO COLLECT RENT,
  • LIFE INTEREST IN THE INCOME OF THE IMMOVABLE PROPERTY,
  • RIGHT OF WAY,
  • A FERRY,
  • FISHERY,
  • A LEASE OF LAND.

WHAT DO YOU UNDERSTAND BY TRANSFER OF PROPERTY?

Transfer of a “property”  is a legal process that is of utmost importance and needs to be well-documented taking care of the provisions of the Transfer of Property Act 1882.  Generally, the following six elements make a property transferable.

1. The transfer must be by a living or juristic person:

In the case of Shiromanigurudwara Prabhakar committee, Amritsar v. Sri Somnath Dass.  the court stated that a juristic person can be an individual, firm, corporate company, association, society, not including partnership firm. Any individual who wants to sue or be sued under the law would satisfy this requirement.

2. The transfer must be through a conveyance:

Conveyance means “the action or process of transporting or carrying someone or something from one place to another”. Under the provisions of law, Conveyance can be made so as to “at present or a future date”.  Thus,  conveyance can take place only if there is a creation of a new title. And the property itself must be transferred.

3. Fourthly, it must be made to a living or a juristic person:

The transfer should be made in favor of a person who is living on the date of such transfer. If the transfer is to be made in the favor of the person who is not in existence till now i.e. unborn child, it can be made subject to the condition that firstly it needs to be transferred to a living person.

4. Legal Competency:

 As under Section 7 of  Transfer of Property Act 1882   The individual must not be a minor or an insane person. The person must have the proper title of the property or the person must have the authority to transfer; in part or in whole, as held in the case Krishna Khurhai v. Grindlays bank, if the transfer is made the ultra virus to the authority vested in the agent, the transfer will be void.

5.  Legally Disqualified Transferee: 

Section 6(h)(3) of the Transfer of Property Act 1882  the person must not be a” Legally Disqualified Transferee”. For example, under Section 136 of the before provided act the judges, legal practitioners and officers connected to the court are disqualified from purchasing actionable claims.

  • MODES OF TRANSFER OF PROPERTY-

I.  SALE DEED

II. GIFT DEED

III. BY RELINQUISHMENT

IV. CREATING ANY INTEREST IN THE PROPERTY(LEASE, MORTGAGE OR CHARGE)

I. SALE DEED:  

It is the most valuable legal document that you shall possess upon purchasing a home. Based on the purchase deed, you shall be allowed to proceed with registration and mutation of the property. The sale deed or purchase deed is drawn upon a non-judicial stamp paper by legal draftsmen according to the value prescribed by the stamp duty act of a state.

When you buy or sell property, the transaction is not legally valid without the buyer and seller signing the sale deed in the presence of at least two witnesses. Governed by the Registration Act, 1908, sale deed is the most important document for while selling or purchasing a property in India.

A sale deed shall have the following contents:

i.  Needless to say, a sales deed must begin with the details of the parties involved with the transaction. It should bear the name, age, and addresses of the parties (buyer and seller) involved in the transaction, in order to make it valid. Both parties must sign and execute the deed with bona fide intention.

ii. The sales deed must have a proper description of the property you intend to buy. For instance, if you are buying a 3BHK in Bandra, the sales deed should have a total plot area, identification number, details of construction, the exact location and surroundings. The property schedule must be incorporated in the sale deed to define the accurate location of the property.

iii.  Sales Agreement: This document is drawn up when you pay a booking amount for your new apartment in Mumbai. This agreement states that both sellers, as well as the buyer, shall mutually settle the conditions and terms of the agreement so that it won’t affect the rights of either party. Usually, the sales agreement is drawn up before the sale deed.

iv. Clause Of Sale Consideration: The amount agreed between the buyer and seller must be included in the sale consideration clause. This is the amount that the buyer agrees to pay to the seller during the sale deed execution. The sale amount should be stated clearly on the deed, as it was agreed upon.

v.  Advance Payment & Payment Mode: If you have paid anything in advance to the builder or seller for booking the flat, then this should be mentioned in the sale deed clearly. The remaining amount payable must also be written in the document.   The mode by which you will be paying the amount—cheque, cash or DD must be mentioned along with the consent of the seller to accept it in the form.

vi. Passing Off   The Title: The sale deed should mention when the property title shall be passed to the buyer. The seller must be given a time limit for the title transfer. Once the title has been transferred, all related rights shall pass onto the buyer.

vii. Possession Delivery: A clause in the sale deed must bear the information that the possession of the property shall be transferred to the buyer by the seller after completion of the registration process. The sale deed should state the actual date of delivery of possession.

viii. Indemnity provision: Indemnity also means “Protection against damage or loss, especially in the form of a promise to pay for any damage or loss that happens.” In a property transaction, the term assumes the exact meaning

II. GIFT DEED:  

Gift Deed is a legal document elucidating the voluntary transfer of property to someone else without any monetary exchange. The handover can be made either to a person or an institution; however, it should be accepted by the donee (recipient) during the lifetime of the donor and should be registered under Section 122 of Property Transfer Act, 1882 with the sub-registrar as per section 17 of the Registration Act, 1908. Like a Sale Deed, Gift Deed also comprises the details of the transferor and the recipient. Following are the contents of a valid gift deed:

a. Eligibility for gift deed

In order to document a gift deed, the donor should be legally competent to transfer having the proper title on the property… On the other hand,  the recipient can be a minor with a natural guardian as a nominee, who shares the onus of managing the property until the donee becomes an adult. Additionally, the beneficiary should be alive, else the property will become null and void.

b. Inclusions in a deed

A gift deed includes the following details:

  • Date and place of where the deed is documented
  • Donor’s details (Name, Date of Birth, Father’s Name, and Address)
  • Details of the donee (Name, Father’s Name, Date of Birth and Relationship with the Donor)
  • Relationship of donor and donee
  • Elucidation of the property gifted
  • Signatures of both- donor and donee
  • Details of two witnesses present at the time of property transfer
  • Signature of the witnesses

c. Process of transferring property via Gift Deed

  • Gift deed draft

A  gift deed is a legal document that includes details pertaining to the property transfer and is prepared with the help of an attorney. It should contain important details of whom the property is transferred. The transfer should be voluntary and should not be a forceful act.

  • Acceptance of the deed

The acceptance process of the gift transfer is completed only when the donee receives the property while the donor is alive. The acceptance can be validated by taking possession of the property.

  • Registration

The ownership transfer under a gift deed can only take place for the registered property.  The minimum of two witnesses is required to attest to the deed. Usually, the number of witnesses required varies from one state to another.

Registration of a gift deed involves stamp duty and registration charges. The amount of stamp duty varies across different states. Generally, the stamp duty rates for property transferred by gift is the same as the sale of conveyance deed. However, many states offer discounts on the registration fee if the property is gifted.

III.  BY RELINQUISHMENT DEED:   

A relinquishment deed is a legal document used by a co-owner to renounce or transfer his/her legal rights in the property. Relinquishment of a property co-ownership implies sacrificing or giving up every right on the property, including complete title and interest along with a shift in the liabilities, if any, as on the date of transfer. A relinquishment deed can be prepared for the transfer of freehold plots, residential property, office space, and commercial shop.

 It is pertinent to mention that the recipient can only be a family member or the co-owner of the property otherwise if such transfer is made to the third party such shall be considered as a gift and made through a gift deed.  And, most importantly,   the recipient should be willing to accept the ownership right. In case of non-acceptance of the transfer, the relinquishment deed would be null and void.

  • Following are the contents of relinquishment deeds:

a) Legal binding:

The relinquishment deed, when signed by both the transferor and transferee along with the two witnesses, serves as proof that the recipient is the new co-owner in the property and therefore would be partly responsible for all the estate-related activities. The property under question can be an ancestral property or the property purchased under joint ownership. Moreover, the transferor should inform the other co-owners about the abdication.

b) Irrevocable:

Relinquishment deed is an irreversible agreement and may or may not involve any compensation.

c) Transfer to minor:

The recipient can also be a minor. However, the process would be governed by the Indian Contract Act, 1872.

d) Registration of transfer:

As per the Registration Act 1908, it is mandatory to register the relinquishment deed with the district sub-registrar or any sub-registrar under the State government.

Stamp duty charges: Registration of the relinquishment deed accompanies stamp duty payment; however, it is applicable only on the part of the property relinquished. It is essential to note that the share of co-owners may differ as per their investment proportion.

e)   ESSENTIAL DETAILS: 

  • Complete details of the executant or the transferor and the recipient, including the name and address
  • Description of the property transferred comprising address, survey number, and registration details
  • Purpose of the property transfer
  • Complete information of all the heirs legally entitled to the property
  • Property share held by all the heirs to avoid ambiguity
  • Any compensation received in cash or kind in exchange of property handover
  • A statement that the executant will have no share in the property whatsoever after the registration.

IV) CREATING ANY INTEREST IN THE PROPERTY (LEASE, MORTGAGE OR CHARGE) :

  • Transfer of immovable property can also take place through creating encumbrances on the property by way of lease, charge or  mortgage over the immovable property, which have been defined below as:

a. Mortgage-

Section 58(a) of the defines a mortgage in the transfer of an interest in specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future deist, or the performance of an engagement which may give rise to a pecuniary liability.

In a mortgage, the mortgagor transfers any one of his interests in specified immovable property to the mortgagee in exchange for money to be advanced by way of loan arises in the case of a running account between the parties with a promise to return the amount in future. If the promise is not completed, an obligation to pay arises. These may be a pecuniary liability.

b. Charge-

According to Section 100 Transfer of Property Act 1882  when a person by the act of parties or operation of law creates security for the payment of money to another, the latter is said to have a charge on the property. The charge is created by the operation of law which then distinguishes mortgage, which is created by an act of parties.

c. Lease-

Section 105 Transfer of Property Act 1882  defines lease. According to it, lease of immovable property is a transfer of a right to enjoy such property, made for a certain time, express or implied or in perpetuity in consideration of a price paid or promised, or of money, the share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms.

PROCEDURE OF ONLINE  REGISTRATION OF PROPERTY IN DELHI: 

  • The registration of the property is a crucial part of a real estate transaction as only a well-executed registration permits the transfer rights to the buyer and proves his legal ownership of the property.
  • Thus, to encourage property registration amongst the real estate buyers in Delhi, the state government has resorted to an online cataloging process. This virtual portal not only weeds out the troubles of the traditional way of registration but also makes the process simpler and easier to deal with.
  • Following are the  steps of registration of a property:

1.   Create a deed for e-registration of a property

  • Firstly, to prepare a deed for online registration, visit the site – https://doris.delhigovt.nic.in/
  • Select a ‘deed writer’ from the menu, and you will be redirected to a page below
  • Select the relevant details through the drop-down menu and submit.

2.  Calculate the property registration charges and stamp duty in Delhi:

To calculate the stamp duty and property registration charges in Delhi, visit the website – https://eval.delhigovt.nic.in/.

3. Select the Sub-registrar’s office near the property purchased.

 Fill all the details about the property purchased, including the locality, type of deed and Sub-deed’s name.

4. Get a stamp paper of the required value:

The stamp duty and registration charges will be computed based on the locality, considerable amount of the current property transfer, plinth area of the property, parking area and year of construction. Hence, gather all the information beforehand to avoid the hassles later:

5. Visit the Stock Holding Corporation of India site:

http://www.stockholding.co.in/ and buy the e-stamp paper of the exact value calculated above.

6.  Click on the e-registration service :

Under the e-stamping, e -registration is an easy and convenient way to pay the registration and stamp duty to the State government. Once the payment has been completed, save the receipt for future reference.

7.  Fix an appointment with the sub –Registrar:

  • Get an appointment at the sub-registrar office in Delhi. To fix an appointment, visit http://srams.delhi.gov.in/.
  • Selecting the Sub-registrar’s office in whose jurisdiction your property is located. A series of documents are also required for registration at the Sub-registrar’s office.
  • The documents include e-registration receipt, e-stamp paper with the exact value of stamp duty, two passport size photos and others.
  • All the details of the required documents are mentioned in the lower section of the website.
  • If ‘all the mentioned documents are ready’, click on ‘Yes’ and you will be directed to a new page where e-stamp duty number has to be mentioned.
  • The number would verify if the stamp duty has been paid or not. After the verification process is complete, you will receive a message about your appointment with the sub-registrar.
  • The details of the appointment are e-mailed and messaged on the registered mobile number.

8.  Visit the Sub-registrar’s office for registration

i.  Visit the Sub-registrar’s office on the allotted date and time along with the appointment SMS.

ii.  Present the documents mentioned above at the facilitation counter.

iii. Once all the documents are verified, and the process is complete, collect the registration receipt for future reference. The registration receipt would serve as proof in case a dispute arises in the future.

  • Mode of payment for Stamp Duty: Through e-stamp paper to be purchased from any authorized vendor up to a value of Rs. 500/- and for a value exceeding Rs. 500/-  through various banks as per bank lists. Payment is to be made through e-Wallet Registration Account/ Net Banking/ Debit Card/ NEFT/ RTGS Account to Account Transfer.

CONCLUSION:  THINGS TO BE CONSIDERED BEFORE BUYING PROPERTY 

While India is in the middle of a “Housing for All” mission,   especially for the urban areas, buying a house property is a necessity and creates a sense of comfort and satisfaction for the people thriving to make a living here. However, before investing such a large amount of savings in the lifetime investment one needs to be precarious and taking care of certain things can help to make an economical and financially sound decision.

COMMON FAQS

1. What documents would I need at the time of possession?

  • Original copies of the chain of title agreements and Building Plan approvals
  • Original registration and stamp duty receipts
  • Possession Letter
  • Original share certificate (In case of societies)
  • Proof of payment of all dues like maintenance charges, electricity bills, phone, water and property taxes up to the date of handing possession
  • NOC from the Society or other concerned body confirming no objection to the transfer
  • How could I verify that the documents shown to me by the seller are genuine?
  • Projects approvals can be verified from the corporation or the sanctioning authority’s office
  • Ownership documents can be confirmed from the Sub Registrar’s office where they are registered
  • Share certificate related to societies can be verified from the concerned Society itself

2. What documents do I need to check if I am buying a resale property?

  • Clear and marketable title,
  • Sale Deed, Encumbrance Certificate
  • latest tax receipts,
  • Occupancy Certificate,
  • Building Plan Approvals
  • Possession Certificate.

3. What documents are needed for registration of an independent house?

  • Allotment papers of the plot
  • Building Plan approvals,
  • Transfer Deed (in case of multiple owners),
  • Sale Deed,
  • PAN Card
  • Photographs.

4. What documents should I check before buying a new property?

  • Sale Deed
  • Title Deed
  • Approved Building plans
  • Completion Certificate ( Newly Constructed)
  • Commencement Certificate( Under-construction property)
  • Conversion Certificate( If agricultural land is covered to non-agricultural)
  • Khata Certificate (especially in Bangalore)
  • Encumbrance Certificate
  • Latest Tax Receipts
  • Occupancy Certificate

5.  What are the documents needed to apply for a home loan?

  • You have to submit the following documents:
  • Proof of Identity: PAN, Driving license, Voter ID, Aadhar Card
  • Proof of Income:
  • Salaried Applicants: Latest 3 Months salary slip showing all deductions and Form 16 for the last three years.
  • Self Employed Applicants: IT returns for the past 2 years and computation of income for the last 2 years as certified by a CA
  • Bank Statement: Past 6 months
  • Guarantor Form (Optional)

FOR KNOW MORE ABOUT PROPERTY REGISTRATION Visit following link- https://www.estartindia.com/property-registration .

eStartIndia is India’s leading online platform for all your legal requirements regarding property registration.

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One Comment

  1. DEVENDRA SHARDA says:

    We have a land as our ancestral property which was purchased by my great grandfather , as per government document and site APNA KHATA in Rajasthan this land is in the name of my father in govt document ,now my father wants to give this Land to me …what is the procudure…
    1. Gift or
    2. Relinquishment
    If father gifts me can my brother or sisters object in future?

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