How to store a will

By Mihika Awate

The concept of will is one such legal concept which is known by the public at large. A Will is a document by which a person lays down how their property is to be disposed of after their death and the person making the will is known as a ‘Testator’. The important part here is ‘after their death’, since if the intention is to dispose of the property during their lifetime, then it would not be a will. The property to be disposed of can be both movable and immovable property of the testator.

Every person who is of sound mind and is a major can make a will. The person making the will has to be aware of the consequences of making the will and what he does by making one, and so a person who is intoxicated or suffering from illness or any other cause due to which they do not know what they’re doing, a will made in such a state will not be valid. The will also must be made voluntarily and not under coercion or fraud, et cetera.

There are two types of wills :

  • Unprivileged will – Except for certain circumstances which allow for privileged wills, most wills are Unprivileged wills i.e. they are in written format, must be signed by the testator & need to be attested.
  • Privileged will – SECTION 65 and 66 talk about the circumstances under which privileged wills can be made and in such cases, a will can be made orally and does not require to be attested.

This article will deal only with the storing of an unprivileged will.

  • In a safe at your home

Nowadays there is a wide variety of home safes available in the market for people to purchase. People prefer to store valuables such as property papers, jewelry, cash et cetera at home where they can keep an eye out for the same and purchase a safe for the same reason. With the introduction of the new rules by the RBI notification issued on 18th August 2021 which greatly reduces the bank’s liability and the compensation amount to be paid in case of any damage to the bank locker contents, one can presume that home safes will be more predominant than ever before. One can also make use of a home safe to store one’s will. However, make sure that at least one person other than yourself, a person you trust, is aware of the password/pin of the safe.

  • In a bank locker

Bank lockers are often resorted to by people to store their valuables in, and a will being one can be stored in the bank locker as well. Rent has to be paid for the locker according to the bank rules & regulations. A bank locker can be hired either individually or jointly. When it is hired jointly if one owner dies, then the other owner can still access the locker and hence accessing the will of the dead owner will not be a problem. When it is hired individually, accessing the will of the owner after their death will be extremely difficult and a tedious process. For this reason, it is always recommended that one has a nominee listed for their bank locker who will gain access to the bank locker post their death.

  • With your lawyer

You may also store your will with your lawyer. People often take the help of a lawyer to draft their will since lawyers are aware of the laws related to a will, although it is not necessary to take the aid of a lawyer to draft one’s will. In such cases, one may store their will with the lawyer themselves. Often lawyers have a safe in their offices to store important documents and they may be able to store their client’s will inside the same as well.

  • Make multiple copies of your will

Make sure that apart from your main will, you have made at least 2 copies of your will and have stored them in safe places as well.

A will is an important document and it is of paramount importance that it is stored properly. A lost will is equivalent to having no will. You may store it at places other than the ones mentioned above, such as at your parents’ home, but make sure you store it in a safe place where someone will not be able to tamper with it but at the same time, it is accessible post your death.

What is an affidavit of heirship?

By Nevin Clinton Flywork.io Team, Flywork.io.

    An affidavit of heirship is a written statement which verifies that an individual is a legal heir when he dies without leaving behind a will. The affidavit helps in transferring the property of the deceased to the individual named in the document. It is also used to identify the legal heirs of the deceased to a court. Before delving into the need for the affidavit of heirship and its essentials, it is essential to understand who a legal heir is and what is heirship.

    Heirship is an individual’s right to receive a share of the property of a person who died intestate i.e. without a will. The person who has the right is called a legal heir and it is usually children, descendants, and relatives of the deceased who are the heirs. An affidavit on the other hand is a written statement that can be used as evidence by the court. So an affidavit of heirship is essentially a written statement that confirms an individual as an heir. 

Need for an affidavit of heirship
    It is worth noting that even without a will as well as an affidavit of heirship, a probate court will review the deceased’s debts and determine how his property will be distributed among the legal heirs. But this process is extremely lengthy and risks incurring huge expenses as well. Therefore, if all the legal heirs agree to an affidavit of heirship, the process will be made simpler and the probate court needn’t take the burden of making decisions on distributing the property. 

    Further, even if a will was made by the deceased, an affidavit of heirship can be drafted. This is once again to save time but the affidavit must be similar to the actual will and the wishes of the deceased. If a case arises where the affidavit’s statements contradict those in the will, it is the former which will be considered invalid.

Essentials of an affidavit of heirship

  • Details of the affiant: First and foremost, the affidavit of heirship must have all details on the person filing it. Name, address, contact details, and the like must be provided in the very beginning.
  • Declaring relation with deceased: The relationship of the affiant to the deceased person and details on the death of the said person must be mentioned. The cause of death if known must be provided as well. 
  • Details on the deceased: The name, address, contact details, and other details on the heirs of the deceased person must also be given in the affidavit.
  • Detail on the property: Complete details on the property and debts of the deceased person, if known, must be mentioned in the affidavit. 
  • Signatures: The affidavit of heirship must be signed by the affiant, the notary who is officiating proceedings, and preferably by a third party attesting to the fact that the information mentioned in the document is true. After the affidavit is drafted and signed, it has to be filed at the concerned court. 

    Apart from the aforementioned, it is necessary that the basic requirements while drafting an affidavit must also be kept up with. The Kerala High Court in K. Chandrasekharan vs C. Sasidharan Pillai And Ors. laid down certain essentials. Firstly, while providing a piece of evidence, there must be documents and sources to back it up. It is necessary that proof in the form of particulars must be given. If there is no proof and if it’s up to the court to decide on a matter, the affiant must not merely state that he is of the belief that something is true. He must mention the grounds as to why he believes so. So, the aforementioned points must be kept in mind as well while drafting an affidavit of heirship. 

Affidavit of heirship is an important document and it is advisable that legal personnel draft it

    It is always preferable to have an attorney or a legal professional familiar with the process to draft the document. This would ensure that key details and essentials are not missed out. If such a mishap happens, the affidavit will be considered invalid and a new document will have to be drafted.

Let the qualified curated professionals at Flywork.io assist you to resolve any legal and allied issues. For more details visit us at Flywork.io.

Will – Essentials and Steps to Draft

Nevin Clinton, Flywork.io TeamFlywork.io.

    A will is essentially a legal declaration stating how one’s property must be disposed of after his death. If a will has been drafted by a person before his death, his property will be governed by testamentary succession i.e. according to what he has stated in the will. If there is no will, intestate succession will come into force wherein the division will be done according to existing laws. 

Definition of will
    Section 2(h) of the Indian Succession Act, 1925 defines a will or testament as a ‘legal declaration of the intention of a person when he wants to distribute his estate as a testator to the people who would be inheriting the estate after his death.

Need for a will
    A will is important as it helps make the process of division of property after one’s death extremely simple. A person can decide who receives his property through a will, the lack of which could create needless confusion and legal complications. A will can also contain details on who should be guardians for minor children, if any, as well as successors for businesses. So if a will is drafted in an effective manner, it would lead to seamless disposition of property. This is exactly why a will must be drafted with the help of legal personnel.

Essentials of a will

  • Intention: First and foremost, the intention of the person making the will must be made clear. The said intention must be to take effect after his death.
  • Capacity: Only a person who has attained majority and is of sound mind can make a will. A will can also be made by a person who is usually of unsound mind if it is done so during a lucid interval. 
  • Manner of disposition of property: A will must clearly mention how the property concerned is to be divided. There must be no ambiguity and just naming successors will not be enough. 
  • Alteration of will during lifetime: A will can be altered during the lifetime of a person so it is the final draft of the altered will that will be valid. 
  • Other necessary details: A will must have complete details on the testator, property, an executor will, shares, signatures and so much more which are discussed below.

How to draft a will?

The following are the details that must be ensured to be given in a will while drafting.

Details on testator: Complete details on the person making the will must be provided including name, age, address, and other documents as proof. The date of making the will must also be specified. The testator must also declare that is of sound mind and that he was not coerced into making the will. If a will has certain statements that lead to doubts that the testator might have been coerced, the executor of the will must prove or satisfy the conscience of the court that it was not the case.

Details on beneficiaries: Apart from details on the testator, complete clarity must be given on who the beneficiaries are. Their name, age, address and the like must be mentioned as well.

Appointment of the executor of a will: It is essential that an executor must be appointed for a will who can ensure that everything mentioned is carried out smoothly. Details on the executor must also be provided in the will.

Details on property: Since the very purpose of a will is to govern the disposition of property after one’s death, details of all the assets and properties of the testator must be mentioned with solid proof. The shares that each beneficiary will get from the property must also be given. If a child gets a share, a custodian must be appointed. Any particular direction on how to share a particular piece of property can also be given.

Signatures: A will must be signed by the testator in the presence of 2 witnesses. It is not compulsory that the witnesses must be aware of the details of the will. In fact, it is advisable if they are not aware.

Revocation of will

It is noteworthy here that a will can be revoked during the lifetime of the testator. This can be done by drafting a document stating the intention to revoke a will. Alternatively, destroying a will and all copies of it would also mean that it would stand revoked.

Let the qualified curated professionals at Flywork.io assist you to resolve any legal and allied issues. For more details visit us at Flywork.io.

 

A Complete Guide on Power of Attorney

Nevin Clinton, Flywork.io TeamFlywork.io. 

    A Power of Attorney (hereinafter referred to as POA) is an important document that allows a person to appoint an attorney or an agent to act on his behalf. The agent can then make decisions on behalf of the principal on matters like finances, medical care, property, etc. Now, there are various types of POAs and each one gives varying degrees of power or control to the agent. 

Definition of Power of Attorney

     Section 2(21) of the Indian Stamp Act, 1899 defines ‘Power of Attorney’ as one that includes any instrument (not chargeable with a fee under the law relating to court-fees for the time being in force) empowering a specified person to act for and in the name of the person executing it.

Types of POAs

      POAs are of two types broadly –

General and Specific. In the former, a vast amount of power is given to the agent whereas in the latter he is empowered in just a particular aspect. Therefore, the power granted to the agent is expressly limited in specific POAs. There are also other types such as durable POAs. Here, the principal empowers the agent to act on his behalf even if he reaches a stage where he can’t communicate. This can be due to serious illness or injury. Yet another type is a medical POA. These empower the agent to make decisions on behalf of the principal specifically in cases of medical illness. 

Uses of POA

 Following are the decisions and legal aspects for which a Power of Attorney can be used.

  • Agreements: A POA can empower an agent to enter into contracts and to sign, execute or deliver any agreement.
  • Property: An agent upon being empowered by a POA can make decisions on the properties of the principal. He can lease, sell, collect rents, and so on. He can also execute contracts in this regard. 
  • Stocks: An agent can sell and buy stocks and enter into contracts for the same.
  • Tax: Filing and signing of tax returns and other tax-related documents can be done by the agent. 
  • Banking: An agent can execute cheques and security agreements on behalf of the principal. He can also deposit and withdraw funds. 

Pros and cons of POAs

    A Power of Attorney helps make things simple for the principal. With a trustworthy agent to take care of important aspects relating to property, tax, and contracts, the principal need not go through the burden of having to take care of each of the above. Further, even if there is scope for misuse of power by the agent, a POA can always be revoked.

    A disadvantage as mentioned above is the possibility of misuse of power by the agent. If the POA is not drafted well or the agent decides to go rogue, several risks are involved. But then, it is worth noting that even if an agent commits fraud, the principal cannot be held responsible for it. 

Points to remember while drafting POAs

  • Complete details on agent and principal: A POA must have the name, address, property owned, and such details on the principal and the agent. It must also be signed by both and there must be two witnesses of sound mind. 
  • Granting power: The POA must then have details on what powers the agent will have and can exercise on behalf of the principal. While granting such powers, the POA must be strictly construed. Thus, there must be complete clarity and no room for ambiguity. 
  • Registration: Registering a POA is not compulsory, but it is advisable. The Registration Act, 1908 mandates that it is the Sub Registrar who must authenticate it. 

Revocation of POA

     The principal has the right to revoke a POA through a written statement. Further, the death or bankruptcy of the principal would also lead to the automatic revocation of the POA. Also, in cases of specific POAs, if the objective for which the agent was appointed is satisfied, it would be revoked by itself. There can also be a mutual agreement between the principal and agent agreeing that the POA will get revoked to broaden the happening of an event. 

Let the qualified curated professionals at Flywork.io assist you to resolve any legal and allied issues. For more details visit us at Flywork.io.

 

Essentials of a Sale Deed

Nevin Clinton, Flywork.io TeamFlywork.io. 

    A sale deed is one of the most important documents in any deal involving housing or property. It is the document that proves one as the owner of the property. It is drafted when the sale is done and it is the one that completes the sale. It does so by transferring the ownership rights to the buyer. Provisions of the Transfer of Property Act, 1882, and the Registration Act, 1908 are the acts that govern the said sale deed. 

Now, once this deed is drafted and signed, the rights get completely transferred. Due to this, a sale deed is of paramount importance and it is essential that it is drafted in a well-organized and effective manner. Firstly, it is necessary to look at when a sale deed comes into the picture and to whom it is applicable. Simply put, the sale deed becomes essential when there is a sale of a property. It is thus applicable to both the seller and the buyer and acts as proof of transfer of ownership and hence, the ownership of the buyer. 

Sale deed and sale agreement are different terms

It is important to understand that a sale deed is not the same as a sale agreement. While the latter is merely an agreement to transfer the property later, the deed actually transfers the property. Naturally, for a sale deed, there are certain essentials that must be kept in mind to ensure that the deed is legally binding and to remove any difficulty which is dealt with below.

What are the essentials of a sale deed?

  • Details on parties: While drafting a sale deed, first and foremost, it is absolutely necessary to mention the name and the details such as an address, age, contact, occupation of the parties involved i.e. the buyer and the seller. It is a must that these details are bonafide. There must then be a description of the property with complete details on its dimensions, registration number, construction details, location, neighborhood, and so on. 
  • Consideration of sale: The sale deed must contain the exact consideration of the sale which is the price at which the property is being transferred. It must be mentioned in both words and numbers. Along with the same, the mode or method of payment must also be specified. Similarly, if the payment is being made in installments, full details on the same, the regular payment, and the time duration must be specified. There must also be complete clarity on the delivery of the property and how and when it shall be transferred. 
  • Other important clauses: Apart from the details of parties and consideration, there are certain details or ‘clauses’ that are must-haves in a sale deed. For example, there is a ‘Transfer of Title’ clause which is a key component as it expressly states the intent of the seller to transfer ownership of the property to the buyer. Further, Encumbrance clauses and Indemnity clauses are also essentials in this regard. The former is one that ensures that the seller has freed the property and hence the buyer of all existing charges like taxes, arrears, and so on. If there are any such charges, the indemnity clause takes effect as it indemnifies the buyer against them as well as any legal dispute relating to the property arising due to the prior actions of the seller.
  • Default clause: Finally, a sale deed must contain a default clause were details on how the penalty has to be paid by either the buyer or seller on defaulting can be elaborated. It can also include details on how to resolve disputes arising out of the same. 

Apart from these, there can be various other details and clauses that can be added as long as they are legally valid and fair. All of the aforementioned essentials must be kept in mind and included while drafting a sale deed.

The sale deed is of huge importance and therefore must be drafted by a legal personnel

The sale deed is of huge importance as it is a legally binding document that acts as proof of ownership. Since it contains a plethora of details on the transfer of the property, it provides clarity to not only the parties themselves but also to others who could be interested in the same such as an investor in case of resale. Thus, such a valuable document requires utmost care in drafting. Lapses in drafting could have huge repercussions and to avoid such a situation, care is required. This is exactly why drafting must be done preferably by legal personnel who are trained in doing it. 

Let the qualified curated professionals at Flywork.io assist you to resolve any legal and allied issues. For more details visit us at Flywork.io.

Role & Duties of RTA Towards Investors, Distributors and MF Houses

Maintenance of records of investor’s transaction holds utter value for any mutual fund house because that should be as accurate and as updated as investors expect it to be. If the contrast of this happens, that puts a big question mark before the work and reputation of mutual fund houses.

So, for the professional and errorless management of such records of investor’s transactions, Mutual Fund Houses appoint an intermediary -Registrar and Transfer Agent, who can carry out such tasks on its behalf.

RTA refers to a regulatory body who takes on the responsibility to upkeep records of investor’s transaction, update their personal information, notify them about the latest offers & schemes and so on to aid mutual fund house. At the same time, it facilitates investors as well.

Why Registrar and Transfer Agent (RTA) has become a must-have for any mutual fund house as well as for investors

Registrar and Transfer Agent (RTA) upkeep transaction records, issue or revoke certificates, takes care of emails & messages, deal with client’s queries, resolves investor’s issues like damage or stolen share certificates and so on.

Alongside the same role, RTA takes care of the timely payment of dividend to the investors, the conduct of mutual funds, maturity dates along with other factors of investors’ interest and ensure that monthly investment statement is accurate with correct details about the units, dates, etc.

Transactions, like buying, selling and switching of shares, are carried out by investors frequently with the help of RTA. Registrar and Share Transfer Agent notifies the investors about profitable schemes and offers and also guide them to make investments that would reap financial benefits. The whole process of investment or transaction that involves an array of activities like filling of the form, buying & selling of shares become as simple as icing on the cake with the help of RTA.

Registrar and Transfer Agent Services to Mutual Fund Associates

The role of a Mutual Fund whirls around its Distributors, Investors, Mutual Fund Company.

Distributors

The distributor refers to an individual or an organisation which educates investors about investment schemes with maximum interest for him/her after due analysis of various investment plans and investor’s risk profile and the congeniality among the two. When a distributor sells a mutual fund to the investor, he gets his commission on profit.

Role of RTA: Registrar & Transfer Agent provides necessary documents and materials like application forms to the distributor which he needs to facilitate the investors to make mutual fund transactions. Besides, RTA also releases distributors sales statements in a respective month.

Investors

Investors are those individuals who are capable of or are willing to make investments in the mutual fund houses by buying securities, bonds and shares. Investors have a sole intent to earn profit from investments made in mutual funds. 

Role of RTA: RTA Agent apprise the investors with the latest investment schemes, maturity dividend payout and other important updates. RTA also makes sure that dividends are distributed to the investors on time and also aids them in executing mutual fund transactions.

Mutual Fund Companies

A mutual fund house or MF company refers to the financial institution which collects money from potential investors and puts it in securities, shares or bonds. Such financial entities work intends to yield substantial profit for its investors in the future dates. 

Role of RTA: RTA Services proficiently maintain the records of investor’s transactions along with other details on behalf of investors. RTA fulfils the multiple needs of mutual fund houses through its diversified branches at different places. This ultimately saves time, efforts and resources of mutual fund houses which can be invested in other more productive tasks.

 Registrar & Transfer Agent provides tailor-made solutions to the mutual fund houses that leave nothing to seek more. In the digital era, every task happens digitally backed by digital communication which has knocked off the need to set up a branch of MF house nearby RTA office.

FAQs: Registration of Property.

 

The registration of property that is land, flat, shop, garage or other things are mandated by the three laws such as Transfer of Property Act 1882; The Indian Contract Act 1872; The Registration Act 1908; Hindu Succession Act 1956; Indian Succession Act 1925 and such other municipal laws, local laws and bye laws.

One should be aware that whenever someone purchases any immovable property[1] (like, land, building etc and not tractor, gold etc) which is valued at or above Rs. 100, he would have to get such a property registered with the local registration office. It is easy to locate the local registration office for this purpose-the municipal corporation within which the buyer resides would be considered as the right place.

The buyer has to appoint an advocate for carrying out the registration of his property[2]. Though a buyer can get the property registered with the local registry office[3] also he can register any property situated in the State of West Bengal at ‘The Registrar of Assurances” situated opposite to the Governor house in Kolkata.

The buying and selling of such immovable property is considered legal when an “agreement of sale[4]” is drawn up. Such deed of sale must contain every minute particulars[5] relating to the property. For instance in case of sale of a flat by a promoter to an individual buyer the deed of sale should lay down specific details like: the material used to do the flooring (Mosaic or marble or tiles) the material used to make the walls, the kind of doors (Iron gates or steel gates) installed; the kind of water facilities installed; the percentage of common area that comprises the stair case, terrace lift, water tank, reservoir.

Note here, that many a times promoters try to get away with delivering less services than what is expected of them. Usually a small clause is put into the agreement which puts the liability of construction of “better reservoir facilities” upon the buyer on the payment of an extra fee. It is better for the buyer to be cautious of such clauses and ensure that every tiny details such as these is notified explicitly in the contract. This would give the buyer the right to sue the promoter for specific performance of the suit if the latter doesn’t keep to his promise.

The deed of sale must also contain the method (cheque, cash, demand draft) and the amount of payment that is to be made by the buyer. A payment schedule contains these details.

The buyer usually pays[6] the per sq. ft. rate based upon the total area (i.e. super built up + carpet area). Now, super built area is calculated upon other amenities provided in the complex in which the building is located. For instance, if the promoter provides common facilities like lift, swimming pool etc then the super built area is calculated as 25%-30% (depends on the construction manifesto) of the Carpet Area. Whereas if these common facilities are non existent then the super built area is calculated at 20% of the Carpet Area. Do check the construction manifesto carefully to know the exact percentage that applies to you.

For eg., If an apartment has a common lift; and the carpet area purchased is 600 sq. ft.—the super built up area would be (25/100*600=150 sq ft). In other words the buyer would have to pay to the seller a total amount on the total area of 750 sq ft (600+150 = 750 sq. ft).

            Steps for registration:

The first thing the buyer must do is engage in the process of searching the property (be it a new property or an old property). Searching has to be done before agreement of sale is drawn up between the parties. This helps in identifying possible sales that a fraudulent promoter could have engaged in. This is a critical step in the process of buying and registering a property, since there are abundant cases pending before the court where the same property has been sold to more than one parties.

The buyer has to pay the stamp duty upon the market value which is obtained from the registration office after submitting the details of the buyer and seller along with the sale agreement. Incase the property is located in one of the places where the land was given as refuge land, then the photocopy of the mother deed of the land would be required. This process is called obtaining the valuation/query[7] of the property. This is primarily a clerical work and the buyer can himself visit the registration office and get it sorted.

The query takes about three working days. After this the same has to be handed over to the advocate for preparation of the draft of the registration/conveyance deed.

 

The query obtained shall contain terms such as, market value, set forth value, stamp duty, registration fees etc. The amount of fees is calculated upon the market value. An additional 1% is charged if the market valuation exceeds 25 (twenty five) lakhs of rupees. Now there are two types of fees:- registration fees and stamp duty which the government receives when a property is sold/brought. The registration fees has to be paid in cash to the office and the stamp duty has to be paid by demand draft by the buyer. The Stamp duty can also be paid through electronic transfer such as NEFT. But if the buyer wishes to make the payment through the NEFT facility he would have to ensure that the payment is made within 30 days from the date on which the query/valuation of the property is procured. Whereas if he chooses to pay by a demand draft he would enjoy an extra buffer period of 14 days (the time period for payment through demand draft is 44 days). The deed of conveyance has to be printed on a stamp paper. Such stamp papers come in various valuations: like Rs. 500, 1000, 5000[8].

The procedures in between the registration date and submission of the documents in the registration office for registering the property involves making what is popularly called “volumes”. In a crude sense, volumes refers to “big green official papers” where every minute details of the property is recorded, including the names of old buyer and new buyer and such other details which the office intends to record. This is not something a buyer should be concerned with. It is primarily the duty of the advocate engaged for this purpose.. For example: If the market value of the property is 45 lakhs, then the fees is calculated @8.2 % of 45lakhs. The amount arrived at would be termed government fees. The buyer other than this has to pay the fees of the advocate which ranges from 0.5 to 1 or up to 2%. The advocate’s fees is steep when he seeks to take up additional tedious responsibilities like sorting of the following things on behalf of the client like— obtaining the query, drafting and typing the deed; paying the volume fees, the clerk fees and such other fees as is required. For more information you can visit: http://www.wbregistration.gov.in/(S(ddoa4qstlcfmlrx0awcygsyk))/Stamp_duty.aspx

The buyer is given the opportunity to propose a desired date for the registration of the property. If the office agrees to that date, the buyer has to be present at the registration office along with the seller, witness, landlord and such other persons as is required by the said office. There are two witnesses (each from the buyer and the seller) required to be present for the process of registration. The new regulation of obtaining[9] the query requires the seller to give the name of a person (known as the ‘identifier’) and his details who has to be present on the day of registration.

For those of you who find the above process (of visiting the registration office) cumbersome, there is another option called “commission[10]”. If you avail of this option, on payment of an extra fee, you could get the registrar and his staffs to come over to your place (the new property) to complete all the formalities of registration.

After the completion of the registry the buyer has to usually wait for one month to receive the original registry deed. This usually depends upon the functioning and efficiency of the registration office. But once the buyer gets the original deed of the property, he can keep it with himself. There is no legal requirement for him to deposit the deed at any government office. The position would however slightly change if the buyer seeks to obtain a loan from a bank against this newly purchase property. He would then have to deposit the original deed with the bank as a security.If the buyer loses the original deed of the property, he could get hold of a duplicate copy of the same after having registered an FIR/GD[11] and paying the required fees. This is possible because the buyers’ lawyers usually makes a photocopy of the original deed and keeps it in the office. Though this is not something that the buyer should be concerned with, it would be good for him to confirm with his lawyer if the same has been done.

 After the completion of the process of registration, the buyer has to initiate the process of mutation[12]. Mutation essentially is the process that allows you to pay property tax to the government. Every year a bill is sent from the municipality/corporation or sometimes one has to go to the municipality himself and pay the tax on a yearly or quarterly basis.

The buyer should ensure before making the final payments for the purchase of the property if the promoter has complied with all the promises he made regarding construction of the apartment. Do note that a part of sum can even be paid later[13] even after the completion of the registration process (this all depends on your negotiating abilities).

Upon taking delivery of the flat the buyer must obtain the NOC[14] and possession letter from the promoter and be verify if there are any pending taxes required[15] to be paid by the promoter. If the buyer does not get this clarified, and if there is tax amount due, upon possession of the apartment, the entire liability of payment of the taxes would shift from the promoter to the buyer.

There is a possibility of the promoter requiring you to engage the services of his designated advocate and telling you how that is a mandatory requirement under law. He could also that that it is important to do so in order to avoid potential legal problems pertaining to the property. Do note that there is no such limiting clause placed upon the buyer by law. The buyer can very well appoint his own personal Advocate for carrying out the work.

Also remember to inform your advocate who handles your income tax returns about the purchase/sale of any immovable property. If you don’t, you could fall on the wrong side of the law. The details of buying/selling of properties in a year has to be informed to ones’ income[16] tax advocate also so that it is recorded in the balance sheet[17]. It is advised that the buyer seeks the assistance of his advocate while choosing the mode of payment for the property (cheque, cash, demand draft etc).

There could be other smaller aspects (not covered in the blog post) involved in the purchase and sale of property. It is best to seek the assistance of a real estate and tax lawyer for the same before venturing out in the buying and selling of immovable property.

There are a couple of other things that you need to be aware of to avoid yourself from landing in any unpleasant situation are as follows.

A.There is a possibility of the promoter requiring you to engage the services of his designated advocate and telling you how that is a mandatory requirement under law. He could also that that it is important to do so in order to avoid potential legal problems pertaining to the property. Do note that there is no such limiting clause placed upon the buyer by law. The buyer can very well appoint his own personal Advocate for carrying out the work.

B.Also remember to inform your advocate who handles your income tax returns about the purchase/sale of any immovable property. If you don’t, you could fall on the wrong side of the law. The details of buying/selling of properties in a year has to be informed to ones’ income[1] tax advocate also so that it is recorded in the balance sheet[2]. It is advised that the buyer seeks the assistance of his advocate while choosing the mode of payment for the property (cheque, cash, demand draft etc).

There could be other smaller aspects (not covered in the blog post) involved in the purchase and sale of property. It is best to seek the assistance of a real estate and tax lawyer for the same before venturing out in the buying and selling of immovable property.

 

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[1] Section 139(1) of Income Tax Act.

[2] Section 139(1) of Income Tax Act.

[1] Part III OF REGISTRABLE DOCUMENTS u/s 17: Documents of which registration is compulsory of The Registration Act available at http://dolr.nic.in/acts&rules/registrationact(1908).htm .

[2] Hiring an Advocate is necessary as the ‘deed of conveyance’ (the official sealed and stamped document which you receive from the registration office basically saying you are the new owner of such and such property) has to be prepared based upon the agreement of sale and other documents available with the buyer and such work is entirely based upon the legal frameworks such as the present laws and other norms that have to be compiled with. The advocate also studies the agreement of sale in case of purchase of new flat and in case of resale he checks the present conveyance deed. It is prudent to allow the advocate to oversee all the above issues and avoid the possibility of incorrect statements.

Depositing the fees can also be technically done by the buyer himself but since an advocate is a regular visitor of the court, adept at handling such issues on an everyday, it is advisable that the buyer employs the services of an Advocate to check the veracity of receipts and vouchers involved in the transaction.

[3] Part V and XI of the Registration Act 1908.

[4] – Section 54 of Transfer of Property Act.

[5] Terms of contract which has been agreed between the parties under the Contract Act Indian Contract Act 1872.

[6] Municipal laws Kolkata Municipal Act, West Bengal Land Reforms Act 1955 Laws; West Bengal Premises Tenancy Act, 1997; West Bengal Estate Acquisition Act, 1953.

[7] Mainly known as the e-assessment slip issued by the Directorate of Registration & Stamp Revenue covered under PART XIII: OF THE FEES FOR REGISTRATION, SEARCHES AND COPIES under section 78 of the Registration Act.

[8] Please note that only the first page has to be purchased for such cost which is known as the stamp paper. (the other pages of the deed of conveyance are the regular green legal sheets)

[9] The office of the Registrar of Assurances Kolkata has been computerized, which now mandates supplying every minute details of the property, buyer, seller, identifier along with bank details.

[10] Section 33 and 32 of the Registration Act 1908.

[11]– Depending on the quantum of the property in question the police registers a case of FIR or GD. Both of them are valid under law

[12] Mutation of Names in the R.O.R.s (Record of Rights) under section 50 of WBLR Act, 1955 available at http://banglarbhumi.gov.in/banglarbhumi/(S(mgexizvmyggg0dvngwnh4tji))/ASP%20PAGES/lr_mutation.aspx.

[13] It can be treated as due diligence of the buyer referred under the terms of the contract which has been agreed between the parties in the agreement of sale.

[14] The is the duty of the promoter to handover the NOC and Possession certificate upon completion of payment but the buyer should be aware that he needs to receive the documents before registration is completed.

[15] The buyer before buying any property should ask for the latest tax receipt paid buy the present owner/seller. The same can be verified in the local municipality office.

[16] Section 139(1) of Income Tax Act.

[17] Section 139(1) of Income Tax Act.

Procedure for Selling a Flat

Every owner of a property has three basic rights in his property which are, firstly, the right of ownership which means that he has the title to the property, secondly, that he has the exclusive right to possess and enjoy the property in any lawful manner he wishes and thirdly, he has the exclusive right to alienate the property, i.e. he can part with the property whenever he wishes in any manner that he likes. Thus, with all these rights, a person becomes the “absolute owner” of the property.

Selling a flat has become an uphill task for many sellers and owners. The very first thing to consider, while selling a property in the real estate market, is to make a proper valuation of the flat to be sold. A seller can either self-assess his property or resort to an external source for determining its worth. The prevailing market rate in the locality where the flat is located can be informally enquired about in the vicinity.The important step, while selling a flat is to find a prospective buyer. It is important at this stage to check the credentials of the buyer in terms of his background, financial capabilities and reliability.

Another important step is to obtain, the consent and /or permission, i.e. the No Objection Certificate (NOC) of various authorities such as the, (a)Society (b)the income tax authority (c)Municipal Corporation (d)the competent authority under the Urban Land Ceiling and Regulation Act (e)any other authority.[i]

After these steps comes a vital stage which is that of documentation of the various necessary legal documents. It is extremely important these days, given the fact that many disputes with regard to fraudulent transactions that have started to arise, that both the sellers and the buyers have the necessary legal documents before they complete their dealing.

The following documents are necessary to be there in order to sell a flat/property:

 Letter of allotmentIt confers the allotment of the property to the seller who had originally purchased the property from the relevant society or authority.

 Previous Sale DeedsThe original sale deed from the previous owners of the property is needed. This traces the ownership of the property that is being sold/ bought. A property with clear documentation and title commands a higher price in the market. The chain of previous agreements with past owners in original with original receipts of registration or the original letter of allotment issued to the first owner by the development authority is important. Flat seller should have an original sale deed while selling the property. The seller needs to register the original deed from the registrar (i.e. the original deed that had been registered by the registrar) and give out a copy of the sale and the receipt from the sub-registrar.Giving a copy of this will trace the ownership of the property and in case there are few documents missing, the property seller can be alerted instantly. It is mandatory under law that the current owner should have the previous agreements with him as well.

Sanctioned planA copy of the approved building plan and occupation certificate issued by the competent authority, which is essentially the local body/ municipal authority of the particular state or city [for e.g. In Delhi, it would be either the DDA (Delhi Development Authority) or NDMC (New Delhi Municipal Council), depending on the area where the flat is located] is another relevant document.

 Encumbrance[ii] certificateThe encumbrance certificate is used in property transactions as an evidence of free title. A seller must ensure that the property he intends to sell has a clear and marketable title, so that it can fetch him a higher market price.

Sale Deed/ Agreement

Once the documentation is cleared, the parties can then enter into an agreement to sell and confirm the terms and conditions. After this, they can start preparing the sale deed. Agreement to sell precedes execution of a sale deed. The subsequent sale deed is based on the agreement to sell. This agreement is also signed and executed between the seller and buyer on a non-judicial stamp paper.[iii] After the complete documentation clearance, the buyer and the seller should sign an agreement stating the sale and confirmation of the property along with terms and conditions. This document also mentions the terms and conditions and the sellers intentions of selling away his property.[iv]

[i]Checklist for selling property, whether residential or Commercial, available at: http://www.propmart.com/faqs/faqs.asp?FAQNum=177, last accessed on 6th January, 2015.

[ii]The word “encumbrance” essentially means and sort of burden or impediment that flows with the flat/property. For example, it could either be a mortgage on the flat or any legal dispute that is going on with regard to the flat/property. An encumbrance certificate thus ensures that the property/ flat is free from any sort of monetary or legal liabilities and the title and ownership can be passed to the buyer.

[iii]Documents you need to have in order while selling property, available at: http://articles.economictimes.indiatimes.com/2012-04-07/news/31304922_1_sale-deed-encumbrance-certificate-sale-agreement, last accessed on 7th January, 2015.

[iv]What are the main documents to sell a property, available at: http://www.commonfloor.com/guide/apartment-society-what-are-the-main-documents-required-to-sell-a-property-17413.html, last accessed on 7th January, 2015.