Recently, Rajiv, a software engineer, got a rude shock when he decided to sell his house that he inherited from his father. He couldn’t sell his property as it was not registered. Never in his life did Rajiv consider it necessary to register the inherited property. In fact, he didn’t even know it was not registered.
It is important that you realise that if you fail to register the property, the previous owner or the developer will be considered the legal and rightful owner. Legally, the sale of property won’t be considered valid till the sale deed is duly stamped and registered. The basic purpose of registration is to record the ownership of the flat. Typically, a person can’t sell his property in case his home is not registered in his name.
Importance of registration:
According to Nitin Bansal, MD, Prithu Homes, “Registering the property is imperative when one buys a house, commercial shop or land as it proves your legitimacy to carry out any transaction. In other words, it gives complete ownership rights to the owner. A person is considered the legal owner of a property only after he gets the property registered in his name.”
Bansal adds, “As per a ruling by Supreme Court in 2011, all property sales would be considered invalid unless the sale deed was duly stamped and registered. Under Section 49 of the Indian Registration Act, 1908, the documents (sale/gift agreement) will not have any bearing on the property and will not confer any transaction rights on the property. In case of a dispute, you will not have any rights on the property if it is not registered in your name.”
Siddhart Goel, senior director, research services, India, Cushman & Wakefield, says, “Property registration is a critical aspect for any property purchase process and serves as a basis for establishing legal title to the transacted property in case of any potential dispute. Hence, once the legal title or bonafide ownership of a property is established in the eyes of the law, the owner can undertake any necessary future action such as resale, leasing, offering the property as a collateral to raise loans, etc.”
Dhaval Monani, founder & CEO, First Home Realty Solutions (FHRS), says, “Home registration is proof of ownership. Unless and until the home is registered in one’s name - he/she does not possess legal title or hold any right over the home. The title of a property will always rest with some party — the developer, the previous owner or a proxy if someone has not registered the property in their name. That person or persons will be the legal owners and, in the case of a dispute, they will have ownership.”
Why some owners can't register their homes?
Some owners are unable to register their homes primarily because there is some dispute involving the actual title or ownership of the property.
This could be because of various reasons such as the selling party/developer does not have a clear title or right by law to transact the property, or there could be some litigation going on for the property. A property can’t be registered if it has been built illegally without the necessary regulatory approvals. These approvals include absence of completion/ occupation certificate issued by the municipal authorities, unauthorised construction/deviance from approved plans, etc. Some legal dues outstanding against a particular property may also stand in the way of its registration.
If a property is not considered safe (read: a building declared dilapidated and marked unsafe for habitation), it can’t be registered. Also such a property can’t be registered if it falls under some restrictions laid down by the government or declared as heritage property or of state/national importance, earmarked for redevelopment for other purpose or for acquisition to construct public infrastructure, etc. As a result of one or more of these mentioned reasons, the regulatory authorities may refuse to register the property.
Can an un-registered property be sold?
A sale without a registration will not be considered as a legal and tenable transaction. It is, therefore, advised to register the property after every ownership change. The sale deed for a home can be executed only by a person who has the home registered in his/her name. So, if a person doesn’t have the home registered in his/her name, it would be registered in someone else’s name and the money would go to that person only.
A property can’t be registered if it falls under some restrictions laid down by the government or declared as heritage property or of state/national importance, earmarked for redevelopment for other purpose or for acquisition to construct public infrastructure, etc.