A legal change in ownership occurs whenever you purchase a property, and this change must be acknowledged and validated by the government following registration. A number of paperwork are needed in order to complete this transaction legally. To successfully complete a legally recognized ownership transfer, one must adhere to a number of laws. It is crucial that you have a fair understanding of this legal procedure.
What is Property registration?
The official procedure for formalizing and recording the transfer of property ownership is known as property registration. This entails paying any applicable duties, such as stamp duty, and registering the transaction with a sub-registrar’s office. The transfer of property ownership is legally acknowledged and approved by law through this legal process.
Mandatory laws for property registration in India
India’s government has put into place two important laws that make it easier to buy and sell property in the country.
Registration Act, 1908
This property law requires all Indian citizens to notify the government if they own any property valued at more than ₹ 100. This is an important step since it provides the government with an exhaustive list of all the land and structures in the country, which could be used in the future to resolve legal disputes.
Indian Stamp Act, 1889
According to this property law, before any documents pertaining to the property can be registered, the owner must pay stamp duty. Stamp duty is a significant source of income for the government and fluctuates based on the value of the property.
New property registration rules in India
Efficient document processing
Technology advancements have made it feasible to obtain copies of all significant documents the same day as registration. Long wait periods are practically eliminated as a result of this.
No compensation for unregistered properties
In an income tax return, any property that the government acquires but is not registered cannot be claimed as compensation. This emphasizes how crucial it is to register your property in order to safeguard your rights and interests.
Legal validity of registered properties
It is crucial to understand that unregistered properties are worthless legally and cannot be used as evidence in court. This demonstrates how crucial it is to confirm that your property is registered and that the necessary documentation is in place.
Is property registration mandatory in India?
A property-related transaction that requires registration is the acquisition of valuable residential plots and units. Registration is required for all transactions involving the sale of immovable property for more than Rs 100, as per Section 17 of the Registration Act, 1908. Since no immovable property can be bought for less than Rs 100, this practically means that all sales of immovable property must be registered. The donation of property is likewise subject to the same rule. The gift deed must be registered for it to have legal validity, even when the donor receives no payment in exchange for the property. Furthermore, registration is a mandatory requirement for every leasing transaction lasting longer than a year.
Is land registration a must?
As was indicated in the previous section, if the transfer of property exceeds a specific threshold, it needs to be registered. Therefore, if land is sold for more than Rs 100, the new owner must pay the appropriate stamp duty and registration fees in order for the land to be registered in their name.
Documents that require mandatory registration
- Instruments of gift of immovable property
- Non-testamentary instruments or transactions that involve the sale of an immovable property for a value exceeding Rs 100.
- Lease of immovable property from year to year.
- Contracts to transfer immovable property for purposes mentioned in Section 53A of the Transfer of Property Act, 1882.
Documents for which registration is optional
Section 18 of the Registration Act, 1908, holds that the following documents may or may not be registered:
- Will: While registration is not mandatory, it is ideal to register a will to provide it property legal standing.
- Rent agreement or property leases where the tenancy period is up to 11 months: This is the reason why most rent agreements are signed for a period of 11 months.
- Documents of past transactions: One cannot re-register such documents.
- Court order comprising an immovable property valued below Rs 100: As the value is less and the work and charges involved in the process are much higher.
- Certificate of sale granted: This document, issued to buyers of foreclosed properties, does not confer ownership and hence, does not require registration.
- Agreement of mortgage: Ideally, this document too must be registered to give it proper legal standing.
- Promissory note: It is a document that promises to pay someone and hence, does not require registration.
- Instrument of partition by revenue officer: This document has government sanction and thus, does not need registration.
- Grant of immovable property by the government: As the grantor is the absolute owner of the property.
Procedure related to property registration in India
1. Submission of documents for registration
- Property documents to be registered must be submitted to the office of the Sub-Registrar of Assurances
- Submission should be made within the jurisdiction where the property, subject to transfer, is located
2. Presence of authorized signatories and witnesses
- Authorized signatories for the seller and purchaser must be present during the registration
- Two witnesses should also be present
- Signatories and witnesses need to carry proof of identity
3. Accepted proof of identity
- Acceptable documents for proof of identity include Aadhaar Card, PAN Card, or any government-issued identity proof
- Signatories representing others must furnish a power of authority
4. Documentation for company representation
- If a company is involved, the representative must carry necessary documents such as power of attorney, letter of authority, and a copy of the company board’s resolution authorizing the representative
5. Presentation of property card and original documents
- Present the property card to the sub-registrar along with the original documents and proof of stamp duty payment
6. Verification of stamp duty payment
- Sub-registrar will verify if adequate stamp duty has been paid using the stamp duty ready reckoner
- Registration will be refused if there is any deficit in the stamp duty payment
7. Explanation of stamp duty and registration charge
- Stamp duty is the tax paid to the government for legal ownership
- Registration charge is the fee for completing this formality in government records
- Stamp duty varies by state, and some states offer stamp duty waivers for women
8. Importance of witnesses
- Witnesses are crucial in the process
- Witnesses must establish their identity in front of the sub-registrar and carry their ID and address proofs
- Biometric identity will be scanned during the registration process
Time limit and fees for property registration in 2023
Documents that must be registered by law must be submitted with the required fee no later than four months after the date of execution. If the deadline has passed, you have the remaining four months to apply to the sub-registrar for a delay forgiveness. If approved, the registrar will register the documents, but only after you pay a fine that could be ten times the initial registration cost. A maximum of Rs 30,000 is charged as the registration cost for property paperwork, which is equivalent to 1% of the property’s worth.
The documents that were submitted for registration in the past would be mailed back to you after a six-month period. But as the sub-registrar’s offices are now computerized, the paperwork
Registration charges in key Indian cities
| City | Registration charges |
|---|---|
| Bangalore | 1% of property value. |
| Delhi | 1% of the total market value of sale deed, plus Rs 100 pasting charge. |
| Mumbai | 1% of the total market or agreement value of the property or Rs.30,000, whichever is lesser. |
| Chennai | 1% of the market value of the property. |
| Kolkata | 1% of the total cost of the property. |
Implication of failure to register property
You run a serious risk if you don’t register the property purchase agreement. No court of law may accept as evidence any document that is supposed to be registered but is not registered.
It is important to remember that proving ownership of a property might not be achievable unless your name appears in government documents as the owner of that particular property. For this reason, the buyer is required to register the property.
Furthermore, even though the owner is in possession of the unregistered property, he bears the risk of losing it due to its lack of legal validity. Should the government ever decide to purchase this land in order to create an infrastructure project,
Online property registration
Depending on the state where you live, you could avail of the online services, to part-finish the registration process. However, for the final step, you would have to appear at the sub-registrar’s office, along with the seller and two witnesses, to complete the transaction. Once the documents are registered, you will have to revisit this office, to collect your registered property documents.
FAQs:
The documents that are required for the purpose of registration of a property in India include, include Aadhaar Card, PAN Card, or any other proof of identity issued by a government authority. The signatories also have to furnish the power of authority, if they are representing someone else.
The registration fee for property documents is 1% of the value of the property, subject to a maximum of Rs.30,000.
An unregistered property has no legal validity. Anybody can file a lawsuit about the property, even if you purchased it and have all the other paperwork, if you do not have the registration documentation.
It is important to register your immovable property or a residential land/plot with the concerned authority to assure legal ownership, to produce evidence of title, facilitate transactions, and prevent unlawful disposal.
When a property is transferred from one person to another, the property registration needs to be formalized at the sub-registrar’s office after certain fees, like stamp duty, are paid. This process is called “property registration.”
You run a serious risk if you don’t register the property purchase agreement. In any court of law, a document that is legally required to be registered but is not registered cannot be admitted as evidence.
