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What is the difference between leasehold and freehold property?

The basic difference between a leasehold property and the freehold property is the ‘ownership’ of the Property. In a leasehold property, technically the ownership remains with the concerned Authority or the government (as the case maybe). But this does not bar the individual owner (known as Lessee in this case) from selling or dealing with the leasehold property as he/she may deem fit. In a leasehold property, the Lessee has to basically execute a tripartite sub- lease deed executed between the Lessee, the Purchaser and the Lessor (which is the concerned Authority or the government).
Whereas in a freehold property, the owner of the Property is the final owner of the Property and can sell/lease/mortgage the Property as he/she may deem fit.

What is Power of Attorney?

Power of Attorney is the right/authorization given by a property- owner to someone through whom the owner transfers the power and rights to deal with the Property to his/her chosen power of attorney. A power of attorney can be either a co-owner of the property, a blood- relative of the owner or any other person not related to that property or the owner.
There are two types of power of attorney that can be granted namely ‘General Power of Attorney’ wherein a property owner gives ‘general’ rights to his/her chosen attorney. These include but are not limited to sell, lease, sub-lease etc. the Property as the Power of Attorney deems fit. The other type is ‘Special Power of Attorney’ wherein only a ‘special’ or ‘specific’ right is given by the owner to his/her chosen Power of Attorney.

What is a title deed?

A title deed is a document that proves the right of a person to an immovable property. A person can acquire an immovable property by various means and a properly stamped and executed document evidencing the transaction is a title document. For example a sale deed, a release deed, a relinquishment deed, a gift deed, a family settlement deed, a partition deed, a will all are evidence of how a person has acquired an immovable property and may be called title deeds.

What is a Sale Deed?

Sale Deed also known as conveyance deed, is a document by which the seller transfers his right to the purchaser, who, in turn, acquires an absolute ownership of the property. This document is executed subsequent to the execution of the sale agreement and after compliance of various terms and conditions detailed in the sale agreement.

What is the significance of Title Report

It gives you a fair idea whether there is any litigation or encumbrances in the property under consideration

What are the types of Power of Attorneys?

1. Special Power of Attorney 2. General Power of Attorney. Both can be revocable or irrevocable and should confer the authority as desired by the person issuing the POA.

When and where should a document be registered?

Every document which is required to be registered under the Registration Act, except a Will, should be presented at the office of the Sub Registrar for the registration within the prescribed time of four months from the date of its execution. A document is registered with a sub-registrar appointed by the State Government, under the Indian Registration Act, 1908.

Who is the appropriate authority for knowing the market value of the property?

The Sub-Registrar of the area, in whose jurisdiction the property is located, is the appropriate authority for knowing the market value of the property

What is meant by valuation of property?

The valuation process evaluates the market value of the property. Demand and supply forces operating in the market, as well as other factors like type of property, quality of construction, its location, the local infrastructure available, maintenance, are all taken into consideration before the market value is decided

What exactly do we mean by a Free Hold flat? What are the advantages and disadvantages, if any?

A freehold property (plot or a flat) is one where there is a whole and sole owner(s), ownership is full and unconditional (within the provisions of the laws of the land) and there is no lessor / lessee involved.

Is there any depreciation available by which the market value can be reduced?

Yes. Market value of an immovable property is available for factors such as age of the building, lift, non-RCC structure, locality (e.g. slum land).

On what value is the stamp duty payable on sale of immovable property and when should it be paid?

Stamp duty is payable on the market value or consideration amount mentioned in the instrument, whichever is higher. Ideally stamp duty should be paid prior to signing the instrument.

What are consequences of non-registration of a document?

An instrument, which is not registered, is inadmissible as evidence.

Which documents must be compulsory registered?

The following documents are required to be registered compulsorily under the Indian Registration Act, 1908:
(a)Instrument of gift of immovable property;
(b)Other non-testamentary instruments which purport or operate to create, declare, assign, limit or extinguish, whether in future or in present, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards to or in immovable property.
(c)Non-testamentary instruments which acknowledge the receipt or payment of any consideration on account of creation, declaration, assignment, limitation or extinction of any such right, title or interest;
(d)Lease of immovable property from year to year or for any term exceeding one year or reserving a yearly rent. But the State Government may publish an order in official gazette exempting any district or a part of a district or a lease that does not exceed the term of five years and the annual rent of which does no exceed Rs. 50/- .
(e)Non-testamentary instruments transferring or assigning any decree or order of a court or any award when such decree or order or award purports or operates to create, declare assign, limit or extinguish, whether in future or in present, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards to or in immovable property.
(f)Authorities to adopt a son that is not conferred by a will.

Who is liable to pay stamp duty?

Generally, the consumer i.e. purchaser or lessee of the property is liable to pay stamp duty unless there is any contract to the contrary then the stamp duty will be paid according to the terms of the contract e.g. the stamp can be payable in equal shares.

What is meant by Market Value?

Market value of the property as ascertained by the stamp duty authorities on the basis of a ''Ready Recknor'' which gives the per sq. mtr. value of each village, zone and sub-zone . But the ready recknor is not conclusive and is merely a guideline for the stamp office.

What is difference between a real estate agent and real estate broker?

 Real estate agent: Anyone who earns a real estate license can be called a real estate agent, whether that license is as a sales professional, an associate broker or a broker. State requirements vary, but in all states you must take a minimum number of classes and pass a test to earn your license.

Real estate broker: A person who has taken education beyond the agent level as required by state laws and has passed a broker’s license exam. Brokers can work alone or they can hire agents to work for them

What is meant by Carpet Area, Built-Up Area & Super Built-Up Area?

o • Carpet Area is the area enclosed within the walls, actual area to lay the carpet. This area does not include the thickness of the inner walls. It is the actual used area of an apartment/office unit/showroom etc.
o • Built up Area is the carpet area plus the thickness of outer walls and the balcony.
o • Super Built Up Area is the built up area plus proportionate area of common areas such as the lobby, lifts shaft, stairs, etc. The plinth area along with a share of all common areas proportionately divided amongst all unit owners makes up the Super Built-up area. Sometimes it may also include the common areas such, swimming pool, garden, clubhouse, etc. This term is therefore only applicable in the case of multi-dwelling units.

What is the difference between lease and leave and license agreement?

Lease is defined under Section 105 of The Transfer of Property Act,1882 and a lease of immoveable property is a transfer of a right to enjoy such property for a certain time or in perpetuity on consideration to be rendered periodically or on specified occasions, while a license is defined in Section 52 of the Indian Easement Act,1882 and it does not create any interest in the premises in favour of the licensee excepting a mere right to use and occupy the premises for a limited duration. Both documents have now to be registered. A lease deed is required to be stamped and registered. However the stamp duty payable on lease is more than on Leave and License for a period up to three years. For a period exceeding three years the stamp duty is same for both agreements. The implications of entering into a lease agreement would be: i) That stamp duty would have to be paid ii) That the document would have to be registered iii) That Municipal taxes may go up iv) Of course, Income-tax would have to be paid on your income; and v) The question of Wealth-tax would have to be considered. One property is exempt from Wealth-tax. However, if you have any other property, this implication would have to be considered.

What is a Draft Sale Deed?

A draft Sale Deed, containing full details of the parties, advance amount paid, mode of balance amount payable, receipt of the balance amount by the seller, handing over the original documents of the property, handing over the possession of the property, handing over the authorization letter to transfer power and water meters, signing of the application for transfer of khatha, title of the seller of the property, indemnifying the purchaser in case of defect in the title, easement rights, will be prepared by the purchaser's advocate. Such draft Sale Deed should be captioned as draft Sale Deed and shall be signed by the purchaser's advocate.

What Is Leasehold Property?

Leasehold Property is property leased to a lessee for a stipulated period. The Lessee pays lease premium and annual lease amount as fixed and mutually agreed by the Lessor and lessee. The land ownership rights remain with the Lessor and a prior sale-permission is normally required if you plan to transfer the property

What is the criteria when selecting a locality/area before buying a property?

When you are selecting an area to live in, always check for the points below:
1. Power availability Drainage sewerage
2. Garbage disposal system
3. Street lighting
4. Roads & transport links
5. Proximity to market
6. Post office
7. Banks, school
8. Police stations
9. Medical facilities

How ownership of immovable property is acquired by a person?

A person may acquire immovable property in any of the following way
* By inheritance of ancestral property.
* Through will.
* Acquisition by oneself such as purchase etc.
* Through gift, trust, settlement deeds.
* Grant, sanad / Inam by the Government
Through decree of Court.
There are two ways of acquisition:
* By act of parties.
Example: Purchase, gift etc.
* By operation of law
Example: Inheritance, decree of Court etc.

What is a will?

A testamentary document by which a person bequeaths his property to be effective on his death is a will. The property will devolve on the person in whose favour it is bequeathed after death of testator.

Who can execute a will?

  1. Any person above the age of 18 years and mentally sound may execute will, but will caused by fraud or coercion or by importunately will not be valid. Therefore a will must be executed voluntarily.
  2. Parents or guardians cannot execute will on behalf of minors or lunatics.
  3. Attestation by minimum two witnesses is necessary.
  4. Scribe (deed writer / advocate) cannot be called witness. Two independent attesting witnesses other than the scribe or necessary.
  5. Beneficiary under a will should not sign as attesting witness.

In order to avoid disputes in implementation of a will, description of property and the beneficiaries should be clearly be written without giving room for any doubt.

Is it compulsory to register a will?

It is not compulsory to register. Executants may register at his option. It is better to register the will. If original is lost a certified copy can be obtained from Sub-Registrar Office.

Can a Will be Cancelled

The testator can cancel his will at anytime during his lifetime. Such cancellation deed requires a Stamp duty of Rs.100-00

Can a registered will be rectified or changed?

If executant of a will wishes to rectify, add to will may do so during his lifetime. This is called codicil. This document does not require stamp duty.

Is the certified copy of a registered will available to any body?

A certified copy of a registered will is available to the testator only during his lifetime. After his death anybody can obtain after producing proof of death of testator

What are the duties and liabilities of buyers and sellers while purchasing a property?

Following is the duties and liabilities of buyers and sellers
Before sale
liabilities of seller Liabilities of purchaser
*To inform defects in the property
*To provide records of right
*To execute sale deed Payment of consideration
*To pay of the liabilities on the property Rights
* Rights of seller Rights of buyer
* To get rent and profits Right of encumbrance on consideration already paid
After completion of sale
Liabilities of seller Liabilities of purchaser
*To hand over possession Liability on accidental or loss to the property
Information about right
*To hand over records of rights after receipt of consideration Duty to pay taxes and liabilities after taking possession of property
Rights of seller Rights of buyer
If consideration is due encumbrance on property of such dues Incremental value/profit on property
Though there are rights and duties the purchaser should carefully examine the following matters;
1) Original documents.
2) How did the seller acquire the property.
3) Encumbrance Certificate of the property for a minimum period of 15 years from Sub Registry Office to know if there are any encumbrances on the property to be purchased.
4) Verify from the concerned court if there are any litigations on the property to be purchased.
5) Verify if there are any litigations, objections in revenue, municipal offices about inheritance or any other matter.
6) If seller is a power of attorney holder, it should be verified from the principal and if such power of attorney is genuine and whether it is still in force.
7) It should be verified whether the transaction is opposed to public policy under Section 22A of the Registration Act, 1908. If so the document will not be registered.
8) If the Property is a granted land to the member of scheduled caste and scheduled tribe, it should be verified if the transaction is in contravention of the terms and conditions of grant and whether permission of the Government is obtained for transfer.

Who can sign as witness to a document?

Any person, above 18 years of age and not a party to the document may sign as witness

What is meant by Identifying witness of person presenting/executing a document?

In order to identify genuineness of the persons executing the document, signature of identifying witness are obtained. Without such witness, registering officer may refuse registration.

Does property get transferred by getting a General Power of Attorney from the person selling it? Can the agent become owner of property?

No. It is wrong to say that ownership is transferred by getting General Power of Attorney. Persons purchasing property must get the sale deed registered. This principle applies to other kinds of transactions also.

Who can execute Power of Attorney?

A person who has attained majority may execute power of attorney in favour of another person who has attained majority including family members like brother, sister, father and mother to act on his behalf. If a power of attorney is executed to sell property in favour of relatives other than those mentioned above, 2 percent stamp duty shall be paid on market value of such property. If a power of attorney is executed in favour of developers, Builders of apartment, 4 percent stamp duty shall be paid on market value of such property. (see article 5(f) & 41(a), 41(ea), Schedule to Karnataka Stamp Act 1957).

When would a General Power of Attorney gets cancelled?

a. GPA automatically gets cancelled on the death of Executant.
b. Principal (Executant) may cancel it any time.

What is the meaning of a Special Power of Attorney?

(a) Power of Attorney executed by a person in favour of another to act on his behalf for specific purpose is called Special Power of Attorney.
(b) If a person is unable to go over to registry office to present a document executed in his favour or to admit execution of document executed (signed) by him, such power of attorney shall be authenticated or attested by a Sub Registrar. Otherwise they are not acceptable for the purpose of registration.

Is it compulsory to register power of attorney attested in India by Magistrate or notary?

They need not be registered. But General Power of Attorney containing authority to present or admit execution of a document executed by the principle is not acceptable for such presentation or admission of execution unless they are attested or authenticated by a Sub Registrar.

To Ascertain Title of Property how many years documents are needed to be checked?

 Documents of 30 years have to be checked for Title

 

What happens if the title of any property is defective?

Sale of the property can be challenged.

Can you sell the property without registration?

No. You cannot sell a property without proper registered document(s). A registered document is the authenticity and guarantee of the ownership over the property. Neither should one sell a property without proper registered documents and neither should one purchase a property wherein the seller does not have registered document of his/her ownership in the Property.

What does residential property mean?

For LPT purposes, residential property means any building or structure (or part of a building) which is used as, or is suitable for use as, a dwelling and includes any shed, outhouse, garage or other building or structure and includes grounds of up to 0.4047 hectares (equivalent to one acre).

Due diligence before buying a resale property

1. Check for a duly stamped registry 2. Ensure no dues are accorded to the builder 3. Check for seller’s name in municipal records 4. Confirm seller’s membership in the society (if formed) 5. Ensure there are no pending bills, charges or taxes 6. Make sure that the property is mortgage free 7. Sanctioned Building Plan (to ensure no unauthorized construction) 8. Previous title documents (that chain of title is complete)

What all documents should you have at the time of possession?

1. All original chain of agreements form part of the title documents and must be obtained by the buyer. 2. Do remember to obtain the original registration receipts and the original stamp duty receipts. 3. A letter of possession duly witnessed by two witnesses confirming the physical handover of the premises. 4. In case of a Society, the original share certificate together with all transfer forms duly executed. 5. Proof of payment of all dues such as maintenance, electricity, phone, water, property taxes upto the date of handing over possession. 6. A limited power of attorney from the Seller(s) authorizing the buyer(s) to sign all documents and applications etc. pertaining to the said premises. 7. An NOC from the Society or other body confirming that they have no objection to the transfer.

How to verify project approvals documents?

The documents needed to be verified for checking project approvals. 1: Confirm approved plans, 2: Previous title documents (that chain of title is complete) 3: Make sure that the property is mortgage free ( nil encumbrance certificate ) 4: Other approvals such as environmental clearances are important 5:NOC from utility companies.(P.W.D , electricity, etc.) 6: Title Search must be carried out at the Sub Registrar’s office to verify title and ascertain encumbrances, if any.

How to verify project approvals documents?

Same documents as above would need to be verified for checking project approvals. Confirm approved plans, other approvals such as environmental clearances are important and NOC from utility companies. Title Search must be carried out at the Sub Registrar’s office to verify title and ascertain encumbrances, if any.

What is a building completion certificate?

A building completion certificate is the final document granted by the plan sanctioning authority and usually follows the occupancy certificate. This document certifies that all acts necessary in connection with the construction of a building are complete.

What is a conveyance deed? Why is it required?

The word conveyance means the transfer of ownership or interest in real property from one person to another by a document, such as a deed, lease, or mortgage. In India, transfer of property or rights in immovable property is governed by the Transfer of Property Act, 1882. For the transfer of any immovable property or rights in immovable property, it is necessary to execute a conveyance deed.

How to register your property?

The original property document to be registered along with a copy is to be presented with the concerned Sub- Registrar by the Seller. Both Seller and the Purchaser are present before the concerned Sub- Registrar who admits the execution of the document. The sub- registrar after making the due inquiry registers the documents and returns the original document to the concerned party.

Can a Power of Attorney be issued to someone else to register the document?

Yes, by executing a ‘Special Power of Attorney’ for this purpose, the property owner can transfer his/her right to register a property document to someone else.

What is an occupancy certificate?

An occupancy certificate is granted by the plan sanctioning authority once the building is complete and ready for Inhabitation. In some places, an official water connection is granted only after the OC has been obtained. This document is given after verification that the construction has been carried out in accordance with the approved plans. The builder is not entitled to give possession and the unit buyer is not allowed to occupy the unit till the OC has been obtained. Further, the property comes into existence on and from the date of granting of OC. Property taxes are also levied as a unit from the OC date.

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