nriva - property purchase precautions (1)

NAMASKARAMNRIVA

harsh but fact

Innocence is a sin

Ignorance is an offence

But - no law holds innocence or ignorance an offence

Law casts duty on us to be prudent and diligent

Law comes to the rescue of only diligent, but not dormant

my aim through this session -- to drive

Purchase of property is not an exchange of money for a registered sale

Purchase of property is a process with investigation into seller’s title and application of legal mind

Buying a property that is free from encumbrances and frauds is not an easy task in the present society

Caveator Emptor – golden principle

Let the purchaser beware

Buyer must be cautious and take all precautions before purchasing property

purchaser is deemed to have notice of anything, which he had failed to discover either because he did not inquire into deeds relating to property and its possession

What we see while buying property but fail to see

We concern for price, affordability, locality, suitability, appreciation, re-sale value, investment opportunity etc

We very rarely get an idea to investigate into title and ownership of property

We have to know holding a registered sale deed or gift deed, the seller does not become owner of a property – so investigate the title and title of owner ship – don’t startle by hearing investigation

Don’t be driven by – a strong desire, a gut feeling, belief in seller, belief in middlemen, a ready-made and self-satisfying answer what happen to us alone when many people buying?

Title – marketable title

“title – the means whereby the owner of lands has the just possession of his property. It is a root by which the right to sell and convey property becomes vested in seller”

“marketable title – it shall be good and indubitable and free from all encumbrances. It is a title free from all such reasonable doubts as would affect the market value of property”

Value for money

A good title passes from a good title – a bad title passes from a bad title – the seller cannot pass a better title than his own

ownership

“collection of rights to use and enjoy property, including right to transmit it to others. Ownership is the state of being owner i.e, proprietorship”

Ownership is exclusive right of

possession

enjoyment

disposal

Ownership is nothing but opinion/belief - and an absolute ownership is an absolute opinion based on the strength of various documents.

Acquisition of ownership

By contract – by way of sale and purchase

By inheritance – by way of succession or by way of will

By prescription – by way of adverse possession

Tracing of title

Period: 30 years minimum – it differs from case to case

Object:

who was the owner 30 years ago?

how title to property descended on seller?

whether such descent is legally valid?

whether seller’s title is clear, valid, subsisting, marketable and free from encumbrances?

whether seller is in peaceful possession and enjoyment of property?

whether the documents substantiating seller’s title and legally valid?

How to trace title to property?

Obtain EC – chronological record of registered documents( but what about unregistered documents?)

Obtain true copies of seller’s title deeds from concerned authorities

Verify that all the true copies are taken from the originals

Check if these documents are legally valid

Read them carefully and make note of series of events linking the owner of property thirty years ago

If there is any break in the link, call for the link

Check if the links legally valid

Title deeds

All original documents and link documents of the scheduled property

Municipal tax receipts/assessment record entries/mutation

Municipal plan in respect of house/apartment

Pattadar pass books and title deeds, adangal, pahani register extracts, FMB in respect of agricultural lands

Court /Arbitration orders

Sale certificate/pattas issued by banks and government

Death certificate of the deceased owner

Legal heir certificate/succession certificates

Will deed etc.,

verification

Personal inspection

Enquiry by third party – relative, friend or reliable agency

Credential of seller

Price/consideration – too low – then doubt

Public notice through news paper advertisement indicating intent to buy the property – calling for objections

Missing original documents – procedure – FIR – possibility of depositing the title deeds – notice to the public

Rights of women members, protected tenants etc

General power of attorney – precautions – SPA (attestation)

General Power of Attorney

General Power of Attorney

Special Power of Attorney

Special Power of Attorney to present the document executed by Principal and admit execution before the Registering Authority – Attestation – Procedure.

Section 32A Form – photo form

Frauds in GPA – checks and precautions –cancellation/revocation – intimation to the Registrar

NRI - Challenges – AnswersRBI guidelines wrt purchase of immovable property by other than citizens of India

http://www.rbi.org.in/scripts/FAQView.aspx?Id=33

Above web link will take us to FAQ Section of RBI on the matters of Acquisition and Transfer of Immovable Property in India by a person resident outside India

RBI is the competent authority to issue instructions and present instructions are updated on 2nd July 2012

Purchase and sale of agricultural/residential/commercial properties is the subject matter covered

Also see http://registrationacts.in/nriservices.php for more information on the subject

Do the Registrar register Charminar, Assembly, Tajmahal etc?

What Registration Act, 1908 (India) prescribes

What are the expectations of registry public

Mismatch

Remedies so far – Section 32A; inclusion of Sale agreement, lease etc as compulsory registrable under Sec 17 etc

Bhoo Bharathi ; The Land titling bill – Torrens law – a small dose

What we require – a full fledged Torrens law – Whether possible in India

Torrens law – principles

The Torrens system works on three principles:

1) Mirror principle – the register (Certificate of Title) reflects (mirrors) accurately and completely the current facts about a person's title. This means that, if a person sells an estate, the new title has to be identical to the old one in terms of description of lands, except for the owner's name.

2. Curtain principle – one does not need to go behind the Certificate of Title as it contains all the information about the title. This means that ownership need not be proved by long complicated documents that are kept by the owner, as in the Private Conveyancing system. All of the necessary information regarding ownership is on the Certificate of Title.

3. Insurance principle – provides for compensation of loss if there are errors made by the Registrar of Titles

Torrens law – perfect title registration

Its purpose was to establish a land registry. Each piece of land would have a single Certificate of Title, kept at a government office. The state government would guarantee the validity of the title, rather than the solicitor/conveyancer who prepared the deeds of conveyance.

The process of conveyancing has become so simple that the buyers and sellers of property can do it themselves without a solicitor/conveyancer.

The Certificate of Title shows:

The present owners

Easements such as underground pipes that may require access for storm water or sewage, and 'right of carriageway' for neighbours get

access to their property

Covenants such as building restrictions

Caveats such as a requirement for someone's approval before

transfer of ownership Mortgages

Registration Act – Certain important provisions

Time of presentation – documents executed outside India

Persons competent to present the document

Place of registration

Erasures, interlineations etc – attestation

Enquiry before registration – limited enquiry powers

Anywhere registration within the district

Anywhere registration within the State – proposal

Frauds - punishments

Indian Stamp Act – important points

Stamp duty before or at the time of execution of the instrument

Stamp duty payment after 2002 – challan system

E-stamping – future

Validation – payment of stamp duty on the instruments –impounding – without penalty within a year from date of signing of the instrument – with penalty after one year

Unregistered vs unstamped instruments

Taxation and other matters relating to NRIs and non-citizens

www.registrationacts.in

A comprehensive guide on the matters:

property purchase

document preparation

document registration

stamp duty

marriage registration

firms registration

societies (ngo) registration

nri/pio issues

accurate and updated answers for the queries

Your guide – lawman to layman

http://registrationacts.in/propertypurchaseprecautions.php

http://registrationacts.in/documentregistrationrequirements.php

http://registrationacts.in/documentpreparationprecautions.php

http://registrationacts.in/saledeedpreparationandprecautions.php

http://registrationacts.in/hindumarriagereg.php

Important websites

www.registration.ap.gov.in – registration department

http://www.ghmc.gov.in/ - GHMC

http://www.hmda.gov.in/ - HMDA

http://www.hyderabad.ap.gov.in/index.aspx --HYDERABAD COLLECTOR

http://apland.ap.nic.in/cclaweb/revenue%20acts.htm --REVENUE DEPARTMENT

http://apstatepolice.org/APPW/jsp/homePage.do;jsessionid=0A7BF3AF181262E8A650B2A2E1E0A323?method=getHomePageElements -- POLICE, AP

Land ceiling in Andhra Pradesh

Class of land(1)

Wet - Double crop wet land

Extent of standard holding(2)

Wet land other than double crop wet land

(a) (b)

Hectares Hectares

Class-A 4.05 (10 acres) 6.07 (15 acres)

Class-B 4.86 (12 acres) 7.28 (18 acres)

Class-C 5.46 (13.5 acres) 8.09 (20 acres)

Class-D 6.07 (15 acres) 9.11 (22.5 acres)

Class-E 6.68 (16.5acres) 10.12 (25 acres)

Class-F 7.28 (18 acres) 10.93 (27 acres)

DRY DRY

Class-G - - 14.16 (36 acres)

Class-H - - 16.19 (40 acres)

Class-I - - 18.21 (45 acres)

Class-J - - 20.23 (50 acres)

Class-K - - 22.85 (54 acres)

VII. Computation of holding :

The extent of standard holding shall be determined as shown in the following statement (Sec.5)

TABLE

Double crop wet land Wet land

Class A …. 10 Acres 15 Acres

Class B …. 12 Acres 18 Acres

Class C …. 13.5 Acres 20 Acres

Class D …. 15 Acres 22.5 Acres

Class E …. 16.5 Acres 25 Acres

Class F …. 18 Acres 27 Acres

Dry

Class G …. 35 Acres

Class H …. 40 Acres

Class I …. 45 Acres

Class J …. 50 Acres

Class K …. 54 Acres

Standard Holding :- In the case of family unit consisting not more than (5) five members, it ranges from 10 to 27 acres in respect of wet lands and from 35 to 54 acres in respect of dry lands, based on the classification of lands in the first schedule as noted below : (Section 5)

Andhra Pradesh map

HMDA map

V. Srinivasulu, DIG, Registration Dept, Govt of AP, presently ED, APGIC

http://in.linkedin.com/pub/srinivasulu-vemula/29/472/b49