When it comes to buying or selling a property, many people are usually more concerned with the price, location and state of the property. However, one of the most crucial, yet most overlooked facets of the property transfer process is property registration. Property registration is the process of entering a property in a register that is kept under the control of a government body. In India property registration or indeed the transfer of property rights is done under the Registration Act 1908 and is important to make sure that the transfer of the title is valid.
This blog pulls out the legal and financial advantages of property registration and why it is important when selling or buying a property.
Legal advantages of property registration
Establishes legal ownership
The first benefit which comes with property registration is the fact that it offers legal evidence of ownership. Court alone can determine ownership and this cannot be done if the property has not been registered. If an agreement of sale or of a sale deed has been made between the buyer and the seller, such documents provide no legal status to the transaction per-se. The government plays its role as the registration acts as a record that must be produced to prove ownership in case of any dispute.
For example, where there is a statutory dispute, ownership of land which is presumably a registered document is conclusive proof of the buyer’s legal interest therein. It also means that without registration, the buyer cannot be able to substantiate rightful ownership in case of any disputes of fraudulence.
Prevents fraud and disputes
Property registration helps to reduce occurrences of con and sort out ownership of the property that is involved. Often there have been instances where property was sold to more than one buyer through fraudulent means. Registration provides a clear and easy record of ownership and transactions in the item. Since the registration is effected under the authority of the Registrar of Properties, every property transaction is recorded in order to prevent schemes of double-dealing and other unlawful transfers.
Also, registered property documents provide a way through which bogus owners cannot dispose of property that does not belong to them or property that is still under legal attach. When a property is registered it is ascertained by the enforcement agencies to see whether there are any legal hold-up such as unpaid tax, encumbrance or claims to the property.
All the above analysis leads to the question of the legal validity of the agreement.
To be legally valid in the sight of the law the property cannot be registered. Essentially this implies that in the event the buyer has an unregistered agreement, he cannot sue legal rights as well as take legal action against the seller in the event of a breach of contract. It is important that the sale agreement is registered because it creates a legal realizable interest that can be acted on in the case of a legal dispute.
Civil right to succeed for heritance
Just in the case when the property owner passes away, no other document is indispensable for the legal transfer of the property to the heirs. In this case, inheritance may be problematic due to the absence or inexistence of proper titles deeds on the property in question. It is less complicated to succeed with the help of registered documents and fewer possibilities of conflicts between relatives. The registered deed makes it possible for the property to be passed on only to the rightful heirs and not have several legal hitches and confusion.
Transparency in property transaction.
In any property transaction, property registration plays an important role in enhancing the level of transparency in property transactions. Concerning the legal aspects, it ensures such people receive information on ownership and other legalities regarding the property in question.
Financial benefits of property registration
Secures financing and loans
A registered property holds more value in the eyes of financial institutions, such as banks and non-banking financial companies (NBFCs). If the buyer needs to apply for a home loan or mortgage against the property, the bank will typically require the property to be registered. Without registration, the buyer may find it difficult to secure financing from banks or other lending institutions.
When applying for a loan, the bank will verify the legal ownership of the property through its registration details. A registered property also ensures that the lending institution’s interest is protected, as it can use the property as collateral in case of loan default.
Enhances property value
Registered properties tend to have a higher market value than unregistered properties. Buyers are more likely to pay a premium for a property that has been officially registered because it guarantees clear and undisputed ownership. An unregistered property may raise concerns about its legitimacy, and buyers may hesitate to invest in such properties due to the potential legal risks involved.
Additionally, the ownership record, which is available through property registration, acts as an assurance of the property’s clear title, further enhancing its value in the real estate market.
Prevents future tax liabilities
Property registration can help the buyer avoid future tax-related issues. Once the property is registered, the relevant tax authorities are notified, and the property’s ownership status is updated in the land records. This ensures that property taxes are appropriately assigned to the current owner. In case of non-registration, the buyer might face difficulties in paying property taxes or could face legal action for non-payment of taxes, which may accumulate over time.
By registering the property, buyers also ensure that they are compliant with local laws and tax regulations, preventing any financial complications that could arise later due to missed tax payments or discrepancies in property records.
Reduces the risk of undue expenses
In case of a dispute over property ownership or transaction legitimacy, the buyer may incur significant costs to settle legal battles or even lose the property. Property registration ensures that the buyer has legal recourse in case of disputes, saving them from unnecessary litigation costs and the possibility of losing their investment. On the other hand, an unregistered property could lead to unforeseen legal and financial troubles, including the risk of being forced to pay compensation or return the property to someone else.
Smoother property resale process
When it comes time to resell the property, having a registered deed makes the resale process faster and more straightforward. Buyers prefer registered properties as they know the transaction will be legally recognized and disputes over ownership will be minimized. Additionally, the process of transferring the ownership rights to a new buyer is much smoother when the property is registered, allowing for a quicker sale and reducing the risk of complications during the sale process.
In what ways can lawchef assist with property registration
At Lawchef we understand the fact that property transfers involves many and legal risks, which is why we make property registration to be a top priority. Hiring our property registration services will help you in protecting your interest as a buyer or seller of property since our team of legal professionals ensures that the process is tightly run. We assist in keeping all records right from the sale agreements, title deeds, transfer and any other documents or paperwork that may be needed to register a transfer. Lawchef also helps in conducting searches to establish the legal tidiness of the property titles to avoid the registration of fraudulent property with detected legal charges or legal suits. It also helps you through the registration of your property so as to enable easy grant of loans and other financial transactions both with banks and NBFCs. Furthermore, our consultants can assist with property tax related issues, which may pose threats, are best dealt within a professional way; and owning a property in a certain state or country entails you have to abide with certain laws regarding properties. That is why by using the services Lawchef, registration of your property will be carried out without any violations, but as quickly as possible, in accordance with all legal acts, thus providing you with real protection against future problems.
Conclusion
Property registration is legal procedure which is mandatory to protect the legal or financial rights of the property owner in India. They create legal frameworks by providing a clear property right and stopping impersonation of ownership. In addition, it improves the market colour of the property, provides better terms for loans, and does not let the owner face tax problems in the future.
Property registration is therefore very important to buyers as it helps them protect their assets, and prevent possible legal complications in future from arising because the property being purchased has a clear title. For sellers, the registration can guarantee a seamless completion of the sales process as it gives the buyer confidence needed to go through with the purchase.
Thus, property registration does not only safeguard personal rights of everyone but also maintains stability of the real estate market’s operations for the best interest of all. Therefore, property registration is not merely a procedure but rather a requirement for a professional working into the property market.
