Property Registration Laws In India You Need To Know About

Whenever you choose to buy a property, you must opt for the registration of the property. This is important to ensure that no fraud takes place and the right evidence is conserved and you can prove your ownership in a court of law.

There are a lot of different laws that regulate the details of property registration in India. When it comes to property registration laws, a thorough idea and understanding are very important. This will ensure that you will be aware of what to expect from the books of law.

What Do You Mean By Property Registry?

Whenever any property is transferred from one person to the other, you have to carry out the registration of the property by visiting the sub-registrar’s office. You need to pay some dues that are important for instance say the stamp duty and then you can finalize the details. This whole process is known as the property registry.

Of course, there are laws that govern the whole process and here we are going to talk about the different laws and thereby you can get acquainted with them to know the details.

The Property Registry Laws

The Indian Registration Act, of 1908 contains details about the property registration laws of documents. This law will list the details of the different processes for registering the different documents. This is important as it helps in conserving the evidence and thereby ensures that fraud can be minimized, if not avoided.

Is It Compulsory To Register Land?

Any transfer of property with a value exceeding Rs. 100 needs to be compulsorily registered. This is an important process that has been made compulsory by the law. The inability to register the land will ensure that should there be any dispute, the new buyer will not be able to prove his/her ownership of the land. So, you have to be sure that you are carrying out this process.

How Important Is Property Registration?

Whenever you choose to purchase high-value residential units, you will need to carry out the registration process. As per Section 17 of the Registration Act, 1908, any property transaction with a value that exceeds Rs. 100, has to be compulsorily registered. This indirectly means that all transactions that involve the sale of the immovable property need to be registered.

Even when it comes to the gifting of property, the property registration laws remain the same. Even though the donor will not receive any monetary consideration despite giving the property, the property will still need to be registered for the change of ownership to be deemed legal and binding by the books of law.

Along with this, all lease transactions where the lease tenure is more than 12 months will have to be registered as well.

It is important to add here that immovable property will include land, buildings, and any other rights that are attached to these properties.

Documents That Need To Be Registered

Here are some of the documents that need to be registered mandatorily. Make sure that if you are dealing with any of these documents, you will have to register them for sure.

The instruments of the gift of immovable property
The lease of immovable property every year
The transaction that involves the sale of property with a value exceeding Rs. 100
Any contracts to transfer immovable property for purposes that are mentioned under section 53A of the Transfer of Property Act, 1882

So, if you happen to be having any of these documents, make sure to have them registered or else you will have to face the consequences in the books of law.

Documents With Optional Registration

As per section 18 of the Registration Act, of 1908; there are a few documents that may or may not be registered. The choice is upon you to decide as the property registration laws don’t mandatorily force the registration of such documents.

Let us take a look at what they are.

The will: it is not compulsory to register the will but most people choose to register the will as this gives it the right legal standing
Documents of any past transactions. These documents cannot be re-registered
Any court order comprising an immovable property with a value less than Rs. 100
Rent agreements or leases wherein the tenure is 11 months or less. Owing to this clause, most rent agreements are made for eleven months and then they are continued for the next slot. This prevents unwanted registration charges.
Agreement of mortgage: While it is not compulsory to register, it is recommended to ensure that the document has legal standing.
Any grant of immovable properties given by the government doesn’t need to be registered any further
The certificate of sale granted doesn’t need to be registered. It is issued to the buyers of foreclosed properties and it doesn’t confer any ownership and therefore doesn’t need any registration whatsoever.
Any promissory note does not need registration as it is just a promise made between two parties regarding a certain amount which will be paid sometime in the future
The instrument of partition by the revenue officer comes with government sanction and so doesn’t need any registration

What Is The Process For Property Registration?

When you are checking the details of the property registration laws, you also need to know the whole process for registering the property. The process is one of the crucial parts as it makes you familiar with the steps you need to follow for the sake of executing the process.

First of all, you need to submit the documents that have to be registered to the office of the sub-registrar of assurances. This office should be so located that the said property should fall under its jurisdiction.

Both the seller and the purchaser along with two witnesses; one from either side of the party need to be present for the sake of registering the document. Both signatories need to make sure that they are carrying their ID proof along. The Aadhar, PAN or any other ID proof that has been issued by a government body will suffice for this purpose.

In case, any of the signatories is a representative of someone else, they will need to show the power of authority to prove that they are indeed the right representative of the said person.

In case, one of the parties to the agreement is a company, then the person who is representing the company needs to have the right documents. They could have the power of attorney or the letter of authority along with a copy of the company’s board resolution. This should mention that they are authorizing him to carry out the registration.

The property card then needs to be presented to the sub-registrar along with all the documents (original copies, when needed) and also the payment receipt of the stamp duty charges.

Before choosing to register the documents, the sub-registrar will have to verify whether or not the right stamp duty has been paid for the property. This rate is calculated on the basis of the ready reckoner rate. If the right amount is not paid, the registrar will refuse to register the documents.

If you are not aware of the stamp duty, it is the tax that you pay to the government. This is done in exchange for attaining the legal ownership of the said asset. Now you may be wondering then what is the registration fee. The registration fee is the charge you need to pay to complete the legal formality. This will make it stated in the books of government records.

The Fees For Registration

It is important to ensure that the documents that need to be registered should be presented within four months from their date of execution. If you fail to abide by this deadline, you will need to send an application to the sub-registrar and explain the reason for the delay.

The registrar may choose to register these documents in the span of the next four months. In most cases, that is likely to incur a fine too. The fine can be up to ten times the original registration fee. Right now, the registration fee for any type of property document is 1% of the property value. There is an upper cap of Rs. 30,000.

Earlier, the documents that you presented for the sake of registration were returned within the time frame of six months. However, this is the new digital era, so the documents are scanned and they are returned the very same day. So, there is no waiting period involved in getting back the documents.

While the fee is usually fixed at 1% of the property value in all cities, Delhi has an additional Rs. 100 pasting charges. Mumbai has an upper cap of Rs. 30,000 and Kolkata considers 1% of the total cost of the property rather than the market value.

What Happens If You Choose Not To Register Your Property?

First of all, the property registration laws make it absolutely compulsory to register the land. So, if you choose not to do so, you are committing an offence in the eyes of law.

Further, if you chose not to register your property, you will not be able to claim your ownership. This is because you are not listed in the books of law as the owner. So, even if you run into any dispute, you will not be able to vouch for your right.

Also, if your property is not registered, you will have the risk of losing it. Suppose, the government decided to build something else at the site, you will not be able to seek any compensation if your land is not registered because there is no way for you to claim any ownership. This makes your possession very risky and so it is always advised to be sure that you choose to register the property always.

The Online Registration Of Property

With the dawn of the digital era, most Indian states offer the provision of an online registration process. However, you need to check the details of the different states. Find out the ones that offer the option of online property registration.

On the website, there are several steps that you need to follow. You can execute most parts of the registration process. But in order to execute the final step, you will need to head to the sub-registrar’s office.

Make sure to have two witnesses along with you who need to carry their ID proof too. The final signing always needs to be done in person. Earlier, you had to revisit the office for the sake of collecting the documents. These days, most offices give it the same day as they use the scanned copy only.

The Registration Law Amendment

Tamil Nadu is hailed to be one of the very first states to bring significant changes to the registration act. The changes were mainly done to ensure that fraudulent activities could be kept in check.

The inspector general of registration can now cancel any fake documents that were submitted during the registration. Earlier, if any fake document was found, the inspector needed to submit the documents to the court. He didn’t have the right to cancel it outright himself. This only led to time killing and delays. So, the power has been instated in the hands of the inspector. Anyone submitting fake documents is also entitled to imprisonment of up to three years.

It has also been made compulsory that advocates and writers need to offer their photographs. They also need to sign the documents. This was also done to cut down the chances of fraud.

FAQ

What are the property registration charges in India?

The registration charge is 1% of the value of the property with an upper maximum of Rs. 30000

What is the time frame in which you need to register the property?

Ideally, you should register the property within four months from the date of the execution. Else you may face a fine of up to 10 times the registration charge

Is it compulsory to register the property?

Yes, it is absolutely mandatory to register the property if the transaction value exceeds Rs. 100