Purchasing property, be it a house, flat, plot, or even commercial space, is one of the biggest and most important financial decisions that an individual takes. However, the entire transaction only becomes valid upon the completion of the legal registration process which gives legal ownership rights. Property registration is an Indian legal process whereby the ownership of the property is transferred to the buyer through official documentation to the government. Property registration is important for buyers as it safeguard them against legal disputes, fraudulent owners and also against further disputes regarding the same property. Although it seems to be a complex task for new buyers, but the actual registration process is quite simple to follow.

Here’s a beginner friendly guide on how property is registered in India:

What is property registration?

The registration of a property transaction to the local governmental authority is termed as property registration. Property registration is essentially the legal recognition given by the Registration Act, 1908, to the transfer of ownership of a property from the seller to the buyer. After the registration of the property, the buyer becomes its legal owner and the sale is considered legitimate under the law.

General steps to property registration are:

• Verification of documents
• Payment of registration and stamp duty
• Execution of deeds and agreement
• Record of sale at the sub-registrar office

In a number of instances, property transfer without registration is considered unlawful.

It’s important to register your property. Here’s why:

• Proof of ownership: It acts as an undeniable legal claim of ownership and ensures no further disputes will arise on that property.
• Safe investment: It safeguards the buyer from fraud and illegal activities concerning their property.
• Public record of ownership: it maintains a public record of all property owners.
• Easy to resell: Unregistered property makes it difficult to sell. Registration makes it easy.
• Loan eligibility: It helps in getting a home loan easily.
• Confirms ownership: It legally certifies that the owner has the rights over that property.

Necessary documents required for property registration.

Here are the major documents required at the time of registration of the property:

Sale Deed

It is the most vital document in property registration, it evidence the sale of the property from the seller to the buyer. These are the following points:

• Details of the property
• Buyer and seller’s identification
• Consideration of sale
• Terms and conditions of the sale deed.
• This deed needs to be signed by both the parties and registered.

Title Deeds

Title deeds attest to the history of ownership of a property, and guarantee that the seller has legitimate rights over it.

Encumbrance Certificate

Encumbrance certificate states that a property is free from liabilities, like outstanding loans or litigations.

ID and address proofs

Identity and address proofs are to be presented by the seller and the buyer, and such proofs include:

• Aadhaar card
• PAN card
• Passport
• Voter ID
• Receipts for property taxes
• Recent receipts for property taxes are used to confirm that all taxes have been paid correctly.

Building plan approval

If it is a new construction or an apartment then approval building plans and completion certificates may be required.

What is stamp duty?

Stamp duty is tax paid to the government while registering a property. This tax is considered one of the major expenses while transacting property.

The rates of stamp duty vary from state to state based on:

• State acts
• Location of the property
• Property value
• Type of buyer

In certain states, women buyers are given relief by way of lower stamp duty to promote ownership.

The sum of stamp duty is generally computed at a certain percent of the market value or agreement value of the property.

Registration Fees

Apart from stamp duty, registration fees are another cost that the buyer has to pay for recording the property sale transaction. Registration fees are lesser than stamp duty and they differ from state to state. The fee is collected at the time of registration of the document at the sub-registrar office.

How is Property Registration done Step-by-step?

Step 1: Verification of property documents

At the time of registration of the property, the buyer must scrutinize the property documents diligently. Buyers are recommended to consult with a property lawyer so that all legal issues like title, absence of any pending legal disputes on the property and approval of the property are ensured and the property is legally constructed.

Step 2: Drafting the sale deed

The lawyer prepares a sale deed which records all the details related to the sale of the property which will include the names of the seller and the buyer, description of the property, sale price and payment details of the sale, etc.

Step 3: Stamp duty payment

Buyers need to pay the necessary stamp duty through an online medium or purchase the stamp papers from stamp paper vendors and authorized banks and collect a receipt. This receipt would be needed at the time of registration.

Step 4: visiting the Sub-Registrar office

The buyer, seller and two witnesses must visit the sub-registrar’s office under whose jurisdiction the property falls. Buyers must keep original property papers, identity proof and passport size photographs of all the involved individuals in their custody.

Step 5: Signing and verification of documents

The sale deed is signed by the buyer, seller and two witnesses once they verify the property documents and identity proofs of all involved individuals. Then the sub-registrar provides registration number for the document.

Step 6: Property registration completion

After carrying out the entire process, the sale deed is registered by the sub-registrar and it becomes a legal document. Finally, it is handed over to the buyer of the property.

Why RERA Verification is necessary

• In case of new projects, buyers must ensure the registration of the projects under RERA (Real Estate Regulatory Authority).
• RERA helps promote transparency, protects buyers from delays and misrepresentation. Buyers can obtain the details of builder, approvals, construction progress and legal compliance by checking the relevant official websites of RERA.

Online Property Registration Services

Some Indian states have introduced partial online registration services to facilitate the property registration process. Services could include online appointments, payment of stamp duty, uploads of documents, and status tracking. In most states, you are still required to appear at the sub-registrar office physically.

Mistakes to be avoided by buyers

• Verification of legal documents: Buyers who do not get their documents verified can fall prey to various types of disputes and frauds as the documents could be fictitious.
• Understatement of Property Value: Some people understate the value of the property to pay a smaller stamp duty. However, this can pose various legal problems in the future.
• Absence of Encumbrances check: Buyers need to ensure that the property that is being bought is free of any loans or any liabilities.
• Delayed registration: Buyers should get the registration done immediately after making the transaction of the property to avoid risks.

Advantages of Registering Property correctly

With a legally registered property you can avail of:

• Security in title ownership
• Greater opportunity for sale of property
• Greater ability to raise loans
• Prevention from property fraud
• Long term mental relief

In fact, it increases the legal rights of the buyer to the property.

In Conclusion

Property registration is a vital part of purchasing any real estate in India. This step legitimizes ownership rights of the property in question, secures the buyer from unwanted controversies and secures an officially approved transaction.

Though the process can appear complicated at the beginning for any beginner, familiarity with the required documents, the stamp duty and registration fees that are required as well as the process for obtaining a legal verification can simplify the property registration process immensely.

Sound planning, diligent documentation and professional legal advice may allow buyers to complete the registration process securely and effectively, making for a sound and wise investment.