Ever buy a piece of property and wonder if you really have to go through the hassle of registering the sale deed? You’re not alone. Many people skip the sale deed and registration step to save time and money but don’t be tempted to take shortcuts.
Failing to register a sale deed can come back to bite you. Before you fork over the cash, make sure you understand whether or not registration is required for your real estate purchase.
Don’t risk losing your investment over some legal technicality you didn’t grasp at the outset.
This quick guide breaks down why registration is compulsory or not so you can breathe easy knowing your new property is truly yours.
Read on to get the full knowledge of the sale deed and registration.
What Is a Sale Deed?
A sale deed, also known as a conveyance deed, is a legal document used in real estate transactions to transfer the ownership of property from one party to another. In short, it’s the paper that makes you the official owner of a plot of land or a house.
Before you can get a sale deed registered and consider a property truly yours, the seller must hand over physical possession of the property to you. At this point, you’ll make the final payment for the property according to your agreement. The seller will then execute the sale deed, filling in all the specifics of the transaction, like the property details, purchase price, date of sale, and other terms.
Registration authenticates the deed and protects you from any future claims to the property from others. It also allows you to make further transactions like taking a mortgage or selling the property yourself in the future.
Some key points about sale deeds:
- A sale deed transfers the ownership and title of a property from the seller to the buyer.
- It contains important details about the property, like survey number, built-up area, boundaries, and purchase price.
- A sale deed must be signed by both the seller and buyer and registered to be legally valid.
- Registration of the sale deed attracts a registration fee and stamp duty that varies by state. Failure to register can lead to penalties.
- A sale deed provides conclusive evidence of property ownership and can be used to apply for loans, mortgages, or further sale of the property.
A sale deed is the most critical document in any real estate transaction. Make sure you fully understand its contents before signing and get it duly registered to call the property your own truly.
Why Is the Registration of Sale Deed Compulsory?
Registering your sale deed is mandatory by law in India. There are several reasons why sale deed registration is compulsory:
- Legal validity
An unregistered sale deed has no legal validity and cannot be used as evidence in a court of law. Registration of the sale deed makes it a legally valid document and can be used as evidence for all legal purposes.
- Transfer of ownership
Registration of the sale deed formally transfers the ownership of the property from the seller to the buyer. Without registration, the buyer will not become the absolute owner of the property.
- Prevents fraud
Registration prevents fraud like selling the same property to multiple buyers or illegal transfer of property. Once a sale deed is registered, the details of the transaction are recorded in the government records, so the property cannot be sold again.
- Government records
Details of the property transaction are recorded in the government records once the sale deed is registered. This helps maintain updated property records and prevent illegal transactions.
- Taxation
Property taxes and stamp duties are calculated based on the registered sale deed. The registration details are also used to calculate capital gains tax on property sales. So, to pay the correct amount of taxes, sale deed registration is important.
- Future references
A registered sale deed can be used as a reference for future property transactions like mortgage, release of mortgage, property partition, etc. Banks and financial institutions also ask for registered sale deeds to process loans.
Sale deed registration has significant legal and practical implications. Though the sale deed registration online process can be time-consuming, it protects the buyer’s and seller’s interests and gives much-needed legal validity to the property transaction. With sale deed verification online
facilities now available, the process has become more convenient, transparent, and hassle-free.
Consequences of Not Registering a Sale Deed
Not registering a sale deed after purchasing a property can have serious consequences. As a buyer, you need to register the sale deed to establish legal ownership of the property. If left unregistered, it can lead to legal complications in the future.
Some of the major consequences of not registering a sale deed are:
- Loss of Ownership Rights
Without registration, the buyer does not get legal ownership of the property. The seller can still claim ownership and even sell the property to another buyer. In case of any disputes, the unregistered buyer will not have any legal rights over the property.
- Difficulty in Availing Loans
Banks and financial institutions will not provide loans against an unregistered property. For availing of a home loan, registration of the sale deed is mandatory. The buyer will not be able to use the property as collateral to get loans.
- Legal Issues
There can be legal complications if the unregistered sale deed is challenged in a court of law. The buyer will not have any legal evidence to prove ownership of the property. In case the seller denies selling the property, the unregistered buyer will face difficulties proving his claim.
- Transfer of Property
An unregistered property cannot be legally transferred to another person through sale, gift, or inheritance. The transfer of unregistered property is not recognized under the law.
- Payment of Taxes
The buyer of an unregistered property continues to pay taxes in the name of the seller. Without having one’s name on the property records, the buyer cannot pay taxes on the property in their own name.
To avoid all these unwanted situations, sale deed registration online should be done as soon as the property transaction is completed.
The sale deed registration process
To legally transfer the ownership of a property, the sale deed must be properly registered. Registering a sale deed is a mandatory process according to the Registration Act of 1908.
It establishes the ownership of the buyer and ensures that the property can be legally sold or mortgaged in the future. The sale deed and registration process can now be completed online in many states.
- Collect the required documents
You will need copies of the sale deed, property documents like the allotment letter or possession certificate, ID proofs of the seller and buyer, and payment details of the registration fees. Make sure all documents are self-attested.
- Fill out the required application forms
Forms 1 and 22 are commonly required for registering a sale deed. Form 1 includes details about the property and parties involved. Form 22 is an affidavit stating that the contents of the sale deed are true. Fill out the forms and get them signed and notarized.
- Pay the registration fees
Registration fees are usually a percentage of the property’s circle rate. You can pay the fees online or at the sub-registrar’s office. Keep the payment receipt for your records.
- Schedule an appointment
Most states allow you to schedule a registration appointment on the Department of Revenue’s website. Select a date and time for sale deed verification online of documents and registration of the sale deed.
- Verifying documents and registration
On the scheduled date, visit the sub-registrar’s office with all original documents. The documents will be verified, and if found acceptable, the sale deed will be officially registered. You will receive a registered sale deed with a unique registration number, also known as an Article Number.
- Obtain an encumbrance certificate
An encumbrance certificate ensures that the property is free of any legal dues. It can be obtained from the sub-registrar’s office, usually within 2-3 working days of registering the sale deed. With the encumbrance certificate, the registration process is complete.
The online sale deed registration process makes it convenient to transfer property ownership legally.
Benefits of Registering a Sale Deed
Registering your property’s sale deed with the local registrar or sub-registrar of assurances has some key benefits for both buyers and sellers.
- Legal Proof of Ownership
Registering the sale deed establishes you as the lawful owner of the property. The registered deed acts as official proof that you hold the title to the land or building. This protects you from potential fraud or third-party claims on the property in the future.
- Access to Property Records
A registered sale deed allows you to access certified copies of the deed and property records from the registrar’s office. These documents provide details like the property’s boundaries, measurements, and adjoining plots. They also contain the names and details of the previous owners.
- Smoother Future Transactions
With a registered sale deed, any future transactions involving the property become simpler. This includes obtaining loans by mortgaging the property, transferring ownership to heirs, or selling the property to new buyers. Since the records are already with the registrar, the legal processes involved take less time and effort.
- Tax Benefits
In some states, registration of sale deeds may make you eligible for certain tax benefits or rebates on stamp duty and registration charges. The specific benefits and rates of relief, if any, depend on the rules in your city and state. It is best to check with the registrar’s office on what incentives may apply.
Registering the sale deed is one of the best ways to safeguard your property rights and avoid potential disputes or fraud.
Final Words
So, in the end, it really comes down to protecting your interests. Getting that sale deed registered might take some extra time and money upfront, but it could save you a huge headache later if questions come up about the sale.
And even if you trust the seller, having the government seal there gives you an extra layer of security and proof that the property is yours.
The sale deed registration process can seem tedious, but making your ownership official on paper is pretty valuable.
Consult with Notarywala for seamless sale deed registration online and verification services. With a commitment to precision and reliability, we simplify processes, ensuring seamless transactions for our clients.
