Law makes reg­is­tra­tion of sale agree­ment manda­tory

Reg­is­ter­ing a sale agree­ment is a wise move as it is also backed by var­i­ous apart­ment acts en­forced by many states

HT Estates - - HTESTATES - Jee­van Prakash Sharma

Real es­tate laws and many judg­ments de­liv­ered by the Supreme Court have man­dated the reg­is­tra­tion of sale agree­ment, ie, builder-buyer agree­ment, but some de­vel­op­ers have man­aged to find loop­holes in the le­gal pro­vi­sions and ex­ploited home­buy­ers ev­ery­where in the NCR.

L e g a l e x p e r t s s ay t h at had Section 17 of the In­dian Reg­is­tra­tion Act (which makes reg­is­tra­tion of doc­u­ments like sale agree­ment manda­tory) been in prac­tice in real es­tate, thou­sands of prop­erty buy­ers would not have be­come vic­tims of prop­erty fraud and mal­prac­tice.

Reg­is­ter­ing a sale agree­ment is a wise move as it is also backed by var­i­ous acts such as the In­dian Con­tract Act, Spe­cific Re­lief Act and var­i­ous apart­ment acts en­forced by many states. The Ut­tar Pradesh Ap a r t m e n t A c t 2 0 1 0 a l s o re­quires all sale agree­ments to be nec­es­sar­ily reg­is­tered in UP.

The down­side of not reg­is­ter­ing a sale agree­ment was specif­i­cally high­lighted by the apex court in its judg­ment in the TG Ashok Ku­mar vs Govin­dammal (2010) case.

“Un­scrupu­lous prop­erty own­ers en­ter into agree­ments of sale and take huge earnest money de­posits/ad­vance, and then sell the prop­erty to oth­ers, thereby plung­ing the orig­i­nal agree­ment holder and the sub­se­quent pur­chaser into lit­i­ga­tion. Reg­is­tra­tion of agree­ments of sale will re­duce such lit­i­ga­tion.”

The judg­ment read: “If all agree­ments of sale are com­pul­so­rily reg­is­tered that will go a long way to dis­cour­age gen­er­a­tion and circulation of black money in real es­tate mat­ters, as also un­der­val­u­a­tion of doc­u­ments for pur­poses of stamp duty. It will also dis­cour­age the growth of land mafias and mus­cle­men who dom­i­nate the real es­tate scene in var­i­ous parts of the coun­try.”

Sev­eral Supreme Court and high court judg­ments have held that un­reg­is­tered agree­ment of sale will not be recog­nised in a court of law. An im­por­tant judg- ment on this is­sue was de­liv­ered by the Al­la­habad High Court in the Vi­jay Ku­mar Sharma vs Devesh Behri Sax­ena case in 2007. Sharma, the owner of a dis­puted 465 sq mt plot in Sec­tor 15A, Noida, Ut­tar Pradesh, had re­ceived 7 lakh as earnest amount from Sax­ena and had signed a sale agree­ment with him on Jan­uary 22, 1993.

Later, Sharma had re­fused to hon­our the agree­ment, ar­gu­ing that no com­pleted, fi­nal, le­gal and bind­ing sale agree­ment had been reg­is­tered by the par­ties and the ex­ist­ing agree­ment could not be re­ceived as ev­i­dence of the al­leged con­tract.

The court, cit­ing le­gal pro­vi­sions, had held that the con­tract for sale of im­mov­able prop­erty in Ut­tar Pradesh had to be a reg­is­tered doc­u­ment and an un­reg­is­tered agree­ment of sell of im­mov­able prop­erty was in­ad­mis­si­ble as ev­i­dence.

De­spite the le­gal pro­vi­sions, how­ever, many buy­ers com­plain that even if they want to get their sale-agree­ment reg­is­tered, most de­vel­op­ers are not in­ter­ested. In such a sit­u­a­tion, le­gal ex­perts say that the state gov­ern­ments should take strict mea­sures as they also stand to lose out on rev­enues. of the land ac­qui­si­tion prob­lem, their book­ings were can­celled by the de­vel­op­ers on one pre­text or the other. The lat­ter were hop­ing to sell the projects at higher prices and can­cel the ini­tial book­ings, and the buy­ers could not take any ac­tion as they had not reg­is­tered the sale agree­ment.

“Hun­dreds of cases of dis­putes be­tween home­buy­ers and builders have arisen due to lack of clar­ity of terms and con­di­tions at the time of pay­ing book­ing amount. If home­buy­ers are aware of each and ev­ery de­tail of the pro­ject and know how and when they have to pay their in­stall­ments, there won’t Roca, a bath­room prod­ucts so­lu­tions provider has launched In-Tank Merid­ian, an in­te­grated WC con­cept, mark­ing the be­gin­ning of a new era in the world of the bath­rooms. The WC in­cludes the cis­tern in it­self. In-Tank Merid­ian in­te­grates the cis­tern into the WC and comes with the lat­est soft air tech­nol­ogy, noise free flush sys­tem, soft close seat cover and it con­sists of an air pump that pushes the wa­ter from the tank to be any dis­pute later,” says Garg.

Rev­enue-earner for states

Other ben­e­fits of get­ting a sale agree­ment reg­is­tered when the book­ing amount is paid will dis­cour­age in­vestors and spec­u­la­tive sale of prop­er­ties and al­low state gov­ern­ments to earn rev­enues as well.

In many states, stamp duty charged on the reg­is­tra­tion of sale agree­ment is equal to the amount paid for the reg­is­tra­tion of sale deed. For in­stance, in Delhi, reg­is­tra­tion of a sale agree­ment in­vites 5% and 7% stamp duty of the to­tal cost of the apart­ment for women and men, re­spec­tively. pro­vide the dual 4.5/3 litre flush. The sin­gle body In-Tank Merid­ian WCs elim­i­nate the need of in­stal­la­tion for cis­tern or flush plate as the WC it­self in­cor­po­rates an in­te­grated tank and flush sys­tem. The state-of-the-art fea­tures and designs have set new trend in WCs, thus con­tem­po­ris­ing each bit of the bath­rooms.

Com­ment­ing on the new col­lec­tion, Pau Abelló Pel­licer, managing director, Roca Bath­room Prod­ucts Pvt Ltd said, “The com­pact and well­rounded shape of In-Tank Merid­i­ans makes them an apt choice for in­no­va­tive bath­rooms.” This is equiv­a­lent to the stamp duty on sale-deed too. In Noida and Ghazi­abad, how­ever, only 2% stamp duty is charged on the reg­is­tra­tion of a sale agree­ment.

“The pro­vi­sion man­dat­ing reg­is­tra­tion of agree­ment for sale will al­low state gov­ern­ments to earn some rev­enue each time an under-con­struc­tion flat is sold by one buyer to an­other. At present de­vel­op­ers are pock­et­ing this money as ‘trans­fer charge’ from one al­lot­tee to an­other. Be­sides this, it will also dis­cour­age in­vestors be­cause they will also have to pay stamp duty on the reg­is­tra­tion of agree­ment for sale for each apart­ment and some per­cent­age Hous­ing for mi­grant bach­e­lors/sin­gles and fam­i­lies in cities like Delhi, Gur­gaon and Noida is dif­fi­cult and the main rea­son is the lack of trust by house own­ers. No player is ad­dress­ing the real is­sue – that of trust-deficit. To bridge this gap, Nest­away has launched Fam­ily Rentals in Delhi.

Nest­away turns un­branded, un­fur­nished houses into fully fur­nished and man­aged apart­ments and pro­vides them at af­ford­able prices to ver­i­fied ten­ants. Till date, the of their profit will go to the state gov­ern­ments in the form of rev­enues,” says SD Singh, a lawyer in the sub-reg­is­trar’s of­fice in Noida. com­pany has pro­vided qual­ity rental homes to about 3,000 ten­ants. The com­pany will also pro­vide other ser­vices right from col­lect­ing rent, tak­ing care of the doc­u­men­ta­tion and main­tain­ing the prop­erty.

Ac­cord­ing to Deepak Dhar, co­founder and chief business of­fi­cer of Nest­away, “while most play­ers lease prop­er­ties from own­ers and fur­ther sub­lease it to ten­ants and keep the up­side or down­side to them­selves, Nest­away is play­ing the role of a fair mar­ket maker. ”


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