Is your home legally safe?

Are you buying  house? Congratulations.

Unfortunately, many people who invest in a home forget to make sure they are legally safe.

Here are five legal questions you must consider before you put down the token amount on your new home.  

1. Who is the owner?

The proof of real estate ownership lies in a document. This document confers title in the property and must executed, stamped and registered with the concerned Sub Registrar of Assurance.

If you buy an apartment or a plot of land, the document that will show ownership is the registered sale deed in the name of the seller.

The person in whose name the ownership is conveyed under these documents is the owner.

Ownership means you have a right over a property and you own it. The owner will have the right of possession, the right to enjoy its use, the right of way, the right to transfer it and the right to earn rent and profit accrued from the property.

So, if you are staying in a rented accommodation or a leased one, you have no ownership rights at all.

2. When can ownership be transfered?

An owner can transfer his property by gifting it or selling it.

A sale deed, or any document in which the ownership rights are transferred, is a document that gives evidence of an individual's ownership of a property.

Rights in property can be lawfully transferred only upon execution and registration of a sale deed in favour of the buyer.

The term 'conveyance' in context of real estate means transfer of title from one person to another.

Generally an owner of a real estate can transfer his property unless there is a legal restriction barring such transfer. For example, if he mortgages his property, he will not be able to sell it.

3.  By whom?

Under law, any person who owns the property and is a legal adult (18 years or older) can transfer it in favour of another.

If the owner gives another individual a Power of Attorney, that person can sell it under this authority. The PoA gives another person the power to act on behalf of the owner.

However, if the PoA only grants a person the authority to manage the property, s/he cannot sell it.

4. Is registration necessary?

The purpose of registration is to prevent fraud and provide security.

It also ensures that every person dealing with property, where such dealings require registration, may rely with confidence upon the statements contained in the registered document as a complete account of all transactions by which his/ her title may be affected.

An unregistered document relating to real estate leads to confusion in ownership, which may give rise to dispute.

So, the transfer of title in real estate is not be legally valid if the sale deed is not registered.

Therefore, registration in the name of the seller or the person transferring his property is crucial for the transfer of clear title in favour of the new owner.

Further, an unregistered document shall not be received as evidence in a court of law should a dispute arise.

5.  Is mutation necessary?

Mutation is not a legal title given to the new owner. It basically means rectification in the records of the municipal authorities (in case of urban properties) and local revenue officers (in case of non-urban properties), replacing the name of the old owners of a property with that of the new owner.

The new owner, in whose favour the title and other rights passes on, must apply to the local municipal authorities for mutation of his name.

Mutation of property is recorded on the presentation of other registered documents showing evidence of transfer of property.

Mutation of property in the municipal/ revenue records is mainly for the purpose of payment of property taxes.

Mrinal Sinha is a corporate lawyer at DSK Legal, a law firm. Would you like to share your feedback with him or is there any specific topic you would like written about? We would love to hear from you!