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Property Registry – 10 Most Common Types of Registration

Property Registry is one of the most curious subjects for any buyer. Predominantly, it depends whether you are buying a resale or under construction flat / property. Property Registry is most crucial and a final step of property purchase. Normally, a buyer gets confused because of unique suggestions from builders/lawyers on property registry. In many cases, banks also impose conditions on property registry. Each stakeholder has it’s own motive/logic on how to execute property registry.

The stamp duty and registration charges play a crucial role in this regard. The prime objective of a buyer is to save stamp duty. The builder or seller play with this psychology of a buyer & try to keep property registry value as low as possible. Some time back, i have written a post on how to save property registration charges. It might or might not be beneficial in all the cases. Normally, buyers fail to judge the impact of low property registry value on capital gain at the time of purchase. I always suggest my clients to take a balanced approach. A saving in stamp duty at the time of purchase might not compensate for the incremental capital gain at the time of sale. The approach should be financially beneficial depending on the investment horizon, appreciation, tax slab, and various other factors. I will discuss this topic in detail in my future post.

Property Registry – 10 Most Common Types of Registration

As the property registration has a financial and capital gain implication on a buyer. Therefore, it is important to understand the types of property registry. It can also have an implication on Home Loan eligibility of a buyer. For simplicity purpose, i have divided the property registry into Resale and Under Construction. Each one of the following types is unique but may sound common. I can share the overview and common pros and cons. For any specific clarification, you can post your queries in the comments section at the end of the post.

A. Resale Property:

1. Full Property Value: From a buyer perspective, It is the simplest and straightforward way to execute property registry. The only precondition is that the property value should be more than or equal to circle rate/guidance value/ready reckoner rate. The only negative is that a buyer may need to shell out more for stamp duty and registration charges.

Quite interestingly, if the buyer is registering at full property value that is higher than the circle rate. In this case, the officials of sub registrar office desist property registry at full value. Many clients asked me the reason for same. The answer is very simple, the real estate mafia. The circle rate/guidance value/ready reckoner rate is decided every year by the average value of transactions in a particular area. It’s a known fact that the actual property value is still higher than circle rate though govt tries to bridge the gap. Now assume that everyone start registering property at full property value that is closer to actual market value. In this case, next year’s circle rate will be at par with market value. It is not a happy situation for builders. It may impact real estate market negatively. The officials of sub-registrar office in collusion with builders insist buyers register property near to circle rate.

2. Property Value is Higher than Circle Rate: This is the most common scenario. In this case, the buyer has the option to execute property registry at circle rate. Let me clarify that in this case, it is perfectly legal to register property at circle rate that is lower than property value. A buyer can execute Deed of Transfer of Rights to bridge the gap between sale deed and sale agreement value. By following this arrangement, a buyer can save on stamp duty and registration charges.

3. Property Value is Less than Circle Rate: I discussed this point in detail in my post What if circle rate is more than market value. You may go through the post for more details. The only word of caution is that the difference amount of circle rate and property value is taxed as “income from other sources” to the buyer. For example, if i bought a property for 40L and circle rate is 60L. In this case, i can register property at 40L. I will be paying stamp duty and registration charges at circle rate i.e. 60L. So far so good but biggest catch is that difference amount i.e. 20L will be taxed as income from other sources. It will be taxed as per my Income tax slab.

4. Bank Valuation: In some cases, banks insist borrowers register the property at either full property value or higher value. In the first scenario i.e. full property value, the home loan eligibility is fixed based on sale deed value instead of sale agreement value. The reason being, many borrowers fraudulently execute sale agreement at a higher value to increase the home loan eligibility. A sale agreement is not registered and mostly executed just for home loan purpose. For example, my property cost is 50L and based on that my home loan eligibility is 80% say 40L. Now i would like to avail home loan of 50L. Therefore, i will execute sale agreement of 62.5L and can avail home loan of 50L. It may land buyer in trouble if seller raises the fresh demand of diff between actual sale value i.e. 50L and inflated value i.e. 62.5L. This difference of 12.5L is added just to increase home loan eligibility. To avoid such frauds banks like SBI insist property registry at full property value.

In the second scenario, banks may insist higher property registry value depending on their internal property valuation. In one of the case, my client was buying a property for 63L whereas circle rate was 72L. In this case, the bank insisted on registering the property at 80L. The reason being, bank’s valuer assessed the property value at 80L. The banks are particular about property value so that in the case of default they should get fair market value through auction.

5. Sale Certificate: This scenario is applicable only in case of bank auction properties. Mostly the bidders have a lot of confusion on property registry in case of bank auction process. Let me clarify that in the case of bank auction, the Conveyance Deed or Sale Deed is NOT registered in the sub registrar office. In this case, sale certificate issued by the bank is registered in sub registrar office. It is signed by the designated and authorized bank official at the time of registration.

B. Under Construction Property:

The property registry of under construction property is slightly confusing compared to resale property. The timing of property registry is also crucial. The timing will have a major financial bearing on the capital gain of the property. As i shared, i will discuss the impact of property registry on capital gain in my later post. Let’s check out the 5 most common types of property registry of under construction property.

1. UDS/Sale Agreement Value: To register a property at Undivided Share (UDS) is the most common practice. For an under construction property, builder sign 2 agreements with the buyer i.e. Sale Agreement and Construction Agreement. In layman terms, Sale Agreement is towards the cost of land. It is also referred as a common area or undivided share in the land or undivided right and interest in the property. On the other hand, construction agreement is towards the construction cost of the flat/property.

Builders register the property at sale agreement value or UDS. It helps to save the stamp duty and registration charges. In many cases, the stamp duty and registration charges charged to the buyer is much higher compared to actual cost. The reason being, builder levy registration charges on total consideration value but property registry is executed at UDS value that is normally 25% to 35% of total cost. Therefore, balance is savings for builder or icing on the cake.  In this point, i am referring to the registration at the time of possession to the buyer.

2. Under Construction Property: I have discussed this topic in detail in my post, Register Under Construction Property for Home Loan. This type of property registry is executed only to avail home loan and is very risky. A buyer hedges the risk of a builder and the bank.

3. Sale Agreement and Work Order: This type of registration is very common and popular in Hyderabad. Builder shares two agreements with the buyer i.e. Sale Agreement and Word Order. A work order is executed to include the cost of tiles, kitchen slab, Windowpane, doors, flooring, POP etc. Normally in such cases, buyer are not aware of VAT and ST implications of the work order. Builder informs these charges only at the time of execution. A top line calculation shows that this kind of arrangement is financially beneficial only for the builder. From buyer’s perspective, the outflow towards stamp duty and registration of sale agreement and VAT + ST of Work order are same if the property is registered at full or gross value. The buyer should insist on property registry at full value. As we know that the attitude of a builder is as if he is selling the last flat on this planet, therefore, very difficult to convince him.

4. Sale Agreement Value + Construction Agreement value: The reputed builders prefer to register the under construction property at full value. A sale deed is executed equivalent to a total of sale agreement and construction agreement value. Similar to point 1 in resale property i.e. property registry at full property value, it is a hassle-free type of property registry for a buyer.

5. Transfer Cases / Assignment Deed: The biggest confusion for a buyer is in the case of transfer cases or assignment deed. A buyer buys under construction property from the secondary market. A tri-party assignment deed is executed between the builder, buyer and the seller. The mystery is in the execution of property registry. Logically speaking a builder cannot register property at UDS in this case as the sale agreement is not signed with the new buyer. I observed that builder still prefers property registry at UDS or sale agreement value of original buyer. The reason being, sub-registrar will never come to know that the under construction property exchanged hands.

On the contrary, if the property is registered at assignment deed value then it is problematic for the builder. The reason being, the premium on property sale is retained by the seller. Technically, the builder will only receive original consideration value as per the sale and construction agreement signed with the first owner. Typically, i observed that property is registered at a value somewhere in between the total consideration value of first owner and the sale agreement value. Personally, i could not understand the logic behind the same.

Summary: We have checked some of the most common types of property registry. I can explain more no of scenarios but would not like to confuse readers. Some of the scenarios are similar in nature but the mode of execution is different. As a buyer, you should not accept the execution process of property registry until unless you completely understand the logic behind the same. As i mentioned that property registration value has a major impact on buyer’s capital gain in future. Therefore, it important to understand the future impact on capital gain. Any decision should not be based only on today’s gain or savings. As a buyer, you should follow an approach that is financially beneficial on a net basis.

Copyright © Nitin Bhatia. All Rights Reserved.

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chinu
chinu
8 years ago

Sir,

I purchased a semi finished flat (90% done) in Hyderabad and the Developer has executed two agreements 1) agreement of sale (60% of value) and 2) construction agreement (40% of value). Can I register the property on the full total consideration amount for semi finished flats ? The developer tells me that since it is semi finished I can only register on the Government Circle Rate ( which is same as the amount in the agreement of Sale). If it is possible please let me how can I force the developer to do it.

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  chinu

In my opinion, you should wait for possession and register at full value.

chinu
chinu
8 years ago
Reply to  Nitin Bhatia

Thank you Sir. Do I have to pay service tax and vat as well, since I am registering after possession. If I have to pay, will that be on total amount (excluding amenities) or construction agreement value.

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  chinu

You need to check whether OC or CC is issued for the project or not.

Rushikesh Deshpande
Rushikesh Deshpande
8 years ago

HI Nitin Sir,
I am going to buy a resale flat in kalyan which is 12yrs old & unfernished, which costs me 55.5L, i am availing the loan from HDFC they have made the valuation of property which is 46L only & they are going to given me loan of Max 40L, now my question is bank always makes valuation of property so less & shall i proceed for buying this property as its bank valuation is very less. Please suggest.

Nitin Bhatia
Nitin Bhatia
8 years ago

Banks valuations are normally correct and near market value. It seems you are buying at high premium.

Maddy M
Maddy M
8 years ago

Hello Nitin sir,
I am going to buy a resale flat from 2nd owner in navi-mumbai which is 10 – 12 yrs old CIDCO property. Deal is final and All documents are available except one payment receipt which is paid by first owner to CIDCO. is it create any problems or how to solve this issues ? Still MOU is pending. Can I do Sale Agreement directly instead of MOU ? Could you please let me know your suggestions ?

Chatterjee Babu
Chatterjee Babu
8 years ago

Sir,

I have purchased a flat from builder which is already constructed, 50% flats are occupied.
Only finishing points (like plumbing tabs, light fittings etc.) are balance which builder says he will do it after payment. Flat can be made ready in a month after my payment.
What documents should i ask for from builders? out of 50L cost of flat, i am planning to give 10 Lacs in a month and 30 Lacs from loan. and balance 10 Lacs I am planning to give after he completes the possession points and give me possession of flat. is it ok?
Do i need to have sale agreement and than sale deed? Whaat doucments are to be done at different stage of above payment ? Pl. guide.

Nitin Bhatia
Nitin Bhatia
8 years ago

For general checklist please click on following link
https://www.nitinbhatia.in/real-estate/property-document/

Vaskar
Vaskar
8 years ago

Hi Nitinji,
I did the registration as per scenario A 3, mentioned by you. I was unaware of the income tax for the buyer part and I am now in a soup. I have verified that part after reading your post, it is article 56(2)(vii). The difference is sizable but one order of magnitude lesser than the example you have given. The registration of the property is in the joint names of me and my wife. Both of us are salaried professionals. Our tax bracket is on either side of the spectrum. Can we show the “income from other sources” in the tax return for the one who is on the lower tax bracket and hence reduce our tax liability? Are there any caveats on this method?

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Vaskar

The difference amount will be taxed in proportion of ownership in property. You cannot change this %. For example, if difference is 5L then 2.5L will be added to income from other sources for each buyer assuming equal ownership in property.

Vaskar
Vaskar
8 years ago
Reply to  Nitin Bhatia

How is ownership % in property decided. This % is not mentioned in the agreement. Does it mean for defaut case we have to split it 50-50?

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Vaskar

If it is not mentioned in the agreement then by default it is equal i.e. 50-50.

Vaskar
Vaskar
8 years ago
Reply to  Nitin Bhatia

Thank you for taking my question and your guidance.

Amarja Ghanekar
Amarja Ghanekar
8 years ago

Hi Nitin,

I have booked a 2 BHK flat at Pune city from a reputed builder by paying a booking amount of 1 lakh. The property is still under construction and as per the Sales team, its expected date of possession is Dec 2017. The cost sheet provided to me contains Agreement value + Stamp Duty + Registration + Legal charges + Service Tax + VAT. I am applying for a home loan with one of the banks which has approved this project. The builder and bank is pushing me to have this registered now itself so that loan can be disbursed. However, I want to register it post possession as that will help me save the cost of paying Stamp Duty + Registration + Legal charges + Service Tax + VAT now itself for a property of which I will be getting possession in 2017. My question is:
1. Should I register now in 2016 for a flat which I would be getting in 2017?

-Thanks
Amarja

Nitin Bhatia
Nitin Bhatia
8 years ago
Jay
Jay
8 years ago

Hi Nitin,
I am booking an under construction Adarsh Palm Retreat villa in Bangalore. Its a second sale from Seller. There is a Sale Agreement between Seller and me. A tripartite agreement is being signed between builder, seller and buyer (me). How much should the franking be done for the tripartite agreement?

I am going for home loan. Seller is insisting on HDFC as he has a loan there and its easier for him to repay, etc. I personally prefer SBI, but it takes time. The project is approved by SBI. DBS Bank is providing better rates than HDFC and SBI. What is your recommendation on home loan?

Thanks a lot!

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Jay

1. An assignment deed can be signed on a paper with franking of Rs 200.

2. I will go for SBI or ICICI Bank.

mangesh kurup
mangesh kurup
8 years ago

Thanks sir. I had a query, suppose I buy a resale property for 35 lacs as registration value and the Circle rate is 26 lacs. When I sell the property, is it required to sell for 35 lacs or above? Can I sell it for 35 lacs or say circle rate prevailing at that time say after 3 years?

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  mangesh kurup

You can sell at circle rate as applicable after 3 years.

Bhavesh Agarwal
Bhavesh Agarwal
8 years ago

Thanks for this Nitin. After the 1% TDS rule where we should declare SALE+CONSTRUCTION agreement value (total value), can we register the property only on the sale agreement value? Will it not be a mismatch and invite some scrutiny?

Nitin Bhatia
Nitin Bhatia
8 years ago

You can register property at sale agreement value. There is no issues as 100% payment is through cheque only.

Nikhil
Nikhil
8 years ago
Reply to  Nitin Bhatia

does TDS rule apply here?

My Case is similar:

Sale Deed -12.5 lakhs, Registration at Guidance Value of around 40 lakhs, Actual payment around 62.5 lakhs (Sale Agreement 12.5 lakhs and Construction Agreement 48 lakhs + Water/Elec/Infrastructure @ Rs 2 Lakhs), [excluding (advance payment lawyer fees, corpus fund, stamp duty, registration fees etc, togther will be around Rs 7 lakhs].

2 Agreements were under my father’s name (Rs 59 lakhs made by my father under his PAN no.). My father passed away and now Sale Deed will be in my name (I shall make payment of around Rs 10 lakhs under my PAN no). Is TDS applicable? Builder says no TDS will apply as Registration will be on UDS and no total amount will be mentioned in the Sale Deed, but reference to 2 Agreements signed earlier mentioned in the Sale Deed.

My father had invested in this flat after selling his existing flat.

Thanks.

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  Nikhil

TDS is applicable.

Nikhil
Nikhil
8 years ago
Reply to  Nitin Bhatia

Thanks Nitin.

Bhavesh Agarwal
Bhavesh Agarwal
7 years ago
Reply to  Nitin Bhatia

Wouldn’t that registration amount (same as sale agreement) then mismatch with the one I mentioned in my form 26 QB which is SALE+CONSTRUCTION amount, wouldn’t that invite scrutiny that at one place I am declaring the value of property as X , and at other place, for the same property, X+Y? Is there a written rule on IT dept website which can refer the registration amount? I heard that it should be minimum government guidance value but wanted a cross reference to validate this because that time form 26 qb rule was not there.

Nitin Bhatia
Nitin Bhatia
7 years ago

You may check the local stamp act for relevant reference.

Bhavesh Agarwal
Bhavesh Agarwal
7 years ago
Reply to  Nitin Bhatia

Hi Nitin, Thanks for this info, I am paying all money in white. But would that not be a problem because I have declared SALE+CONSTRUCTION agreement value in Form 26 QB (Property value column) and during registration of property, your suggestion is to only take sale agreement value from which I can save stamp duty. This was fine until form 26 QB was not in picture, but what about this use case now when declared values of the same property is different in two places?

Nitin Bhatia
Nitin Bhatia
7 years ago

It is perfectly legal to register property at circle rate or guidance value.

ChetanP
ChetanP
8 years ago

Hello Nitin Sir,
I purchased the flat in thane and agreement done in Mar 2015 .Flat was ready to move and already 80% flat owner took possession but builder said still CC not received from Municipal authority and hence builder was demanding Service tax and VAT. Is it legal. Please guide.

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  ChetanP

Till CC or OC is issued builder can demand VAT and Service Tax.

A Patel
A Patel
8 years ago

Respected Sir,

I have purchased a flat from Builder on Sep-2014.

Having under construction flat Sales Deed of 7 Lacs and Construction Agreement of 15.3 Lacs done with Building as a time of purchase of flat. Totalling 7+15.3 = 22.3 Lacs and I am having loan on this from SBI which is 19.3Lac

Due to person reason, I have decided to resale and as per mutual understanding with buyer, we will be making papers/sales deed of 25 Lacs. (Buyer planning to take loan from Bank)

My Query-1 : Whether I need to pay any Income tax or Not? (if I execute resale deed of 25 Lacs with buyer)

My Query-2 : If yes, What will the income amount [(a) 25 – 7=15 lacs or (b) 25-22.3 = 2.7 Lacs] on which I need to pay Income tax .

Note : I’m only having Sales deed of 7 Lacs from Builder and surprisingly just come to know yesterday, I am not having copy of Notarised Construction Agreement executed with Builder in final sales deed files handed over by builder to me).

My Query-3 : Any other things need to be take in to account while making resale deed of 25 Lacs with purchaser?

Request to help provide your guidance and advice

Heartily Thanking you in advance….

Nitin Bhatia
Nitin Bhatia
8 years ago
Reply to  A Patel

1. Prima facie there is a short term capital gain of 2.7L and it will be taxed at respective tax slab.
2. It will be 2.7L
3. It depends on case to case basis. For general guidelines you may check my posts on real estate.

Rit
Rit
8 years ago

Hi Nitin,
Few questions pertaining to purchase of underconstruction property:
1. The property happens to be hyderabad and dual agreement exists. In one of your post you mentioned to register property at circle rate but recently you advised chinu to wait until completion/possession and register at full rate? Can I go ahead and register the property while underconstruction?
2. Is TriParty agreement mandatory for home loans?The bank which has approved the project says that it does not require the agreement and will take care of documentation with the builder directly. So I am not sure on triparty agreement?
3. Do we need to pay the complete amount to the builder before registering the property?
4. Bank creates the mortgage deed alongwith home loan application to safeguard in case of default. How does triparty safeguards banks interest.
5. Builder has agreed to provide the OC at the end of the possession but nothing in writing? I haven’t seen that being mentioned in the sales agreement/deed for some of acquaintences who have bought in different projects? Is it a must to get it in writing? If builder is not ready to put that in what options i have to safeguard myself.
6.What all documents i need from the builder at the time of possession/handing over so that no problem occurs at a later stage.
Would appreciate if you can help me with the above.

Nitin Bhatia
Nitin Bhatia
7 years ago
Reply to  Rit

1. The answer vary from case to case. There is NO universal answer. Prima facie you should not register under construction property.
2. It seems that bank is referring to project papers. Transfer in your name will be affected by the tr-party agreement.
3. Amount is due at the time of registration
4. It safeguard buyer’s interest
5. There is no other option but to wait till OC is issued and received.
6. Normally possession letter is handed over at the time of possession.

Ritz
Ritz
7 years ago
Reply to  Nitin Bhatia

Thanks Nitin for taking time out and responding to the queries. Appreciate it.
I have another question relating to supplementary agreement. Recently I have been told by the bank that it cannot approve the project as the builder is unable to produce supplementary agreement. My question is Supplementary Agreement mandatory? In my case HDFC has approved the project but ICICI did not quoting that the builder could not produce Supplementary agreement. What role does supplementary agreement play? If there are no changes alterations to the original agreement than Supplementary agreement won’t be required is what i understand reading through the internet.

Also as follow-up if i donot register underconstruction property why would bank approve the loan? Generally the trend is to get property registered before bank releases the loan?

Nitin Bhatia
Nitin Bhatia
7 years ago
Reply to  Ritz

It seems bank is demanding Supplementary agreement to Joint Development Agreement. Please confirm.

You are right there is a new trend to register under construction property. Banks insist on same to hedge their risk.

Ritz
Ritz
7 years ago
Reply to  Nitin Bhatia

Yes bank is demanding for the Supplementary agreement in addition to Development agreement. If you can shed some light on educating me on what role does it play and does the process vary from bank/hfc to bank/hfc when it comes to loan sanctioning process? In my case its hdfc and icici

Nitin Bhatia
Nitin Bhatia
7 years ago
Reply to  Ritz

Registered Supplementary Agreement is mandatory. Please check point no 1 in following post for more details.
https://www.nitinbhatia.in/real-estate/property-landowners-share/

DH Vyas
DH Vyas
7 years ago

Hi Nitin Sir,

I would like to express my deepest appreciation for your wonderful articles….!!!!

The details of resale property in District-Thane, Maharashtra are :
1. The Owner has purchased flat in year 1978 at Rs. 20,000, the agreement is not registered and stampduty is also not paid (as per broker the stampduty was applicable from year 1985 in Thane district)
2. The society is registered and have all documents i.e. 7/12, N.A. etc (Name of owner in share certificate)

My few questions pertaining to purchase of this flat:
1. The Bulder is not avaliable, so How to solve past registration and stampduty issues to buy this flat and its cost/penalty
2. Can i purchase this flat ignoring past registration and stampduty issue.
3 Any issue can arise in future and their penalty, if any.

Kindly provide your guidance and advice

Heartily Thanks

Nitin Bhatia
Nitin Bhatia
7 years ago
Reply to  DH Vyas

1. Registration is not required but you have to be extra cautious on the ownership of the property. If share certificate is in the name of the seller then prima facie there is no issue as such.
2. You can buy. As it is cooperative society and in Mumbai there is a practice to transfer the share certificate without registration. You should insist on registration and include it in your sale agreement.
3. I have not seen documents therefore cannot comment on future risks.

DH Vyas
DH Vyas
7 years ago
Reply to  Nitin Bhatia

Thank you very much

Akshat
Akshat
7 years ago

Hi Nitin,
Does getting the property registered with government means that it is void of any legal issues?

Nitin Bhatia
Nitin Bhatia
7 years ago
Reply to  Akshat

No.

A Patel
A Patel
7 years ago

Respected Sir,

I have purchased a flat from Builder on Sep-2014.

Now I am reselling the same in 35L with mutual agreement with buyer to execute sale deed of 25L (Since my purchase from builder is 7L Sale Deed + 15.3L Construction Agreement = 22.3L)

Not Buyer insisting notarised on stamp Sale Agreement/Banakhat of 35L for proof of 10L (35-25L) which he supposed to give in Cash.

And to execute another notarised on stamp Sale Agreement/Banakhat for actual sale deed value of 25L for applying home loan to bank.

As mutually agreed; after approval of bank loan Actual Sale Deed of Value 25L will be executed and First Sale Agreement (Banakhat) of 35L will be discarded/teared off

Q-1 : Is there any issue if I will execute these two notarised Sale Agreement/Banakhat one of 35L & 25L?
Q-2 : As a seller is there any legal catch I should be aware? Or it’s a normal practice for resale properties?
Q-3 : Is there any other way if I don’t want to execute sale agreement of 35L value or for 10L which I supposed to get in Cash?
Q-4 : Instead of executing Sale Agreement of Full Value (35L), shall I provide receipt of Rs.10L (which I am getting in cash) and which may be main concern for buyer to have a proof of 10L rs. Which he is going to give in cash to me.
Q-5 : Any other things need to be taken in to account while making Sale Agreement, Sale Deed with purchaser?

Request to help provide your guidance and advice

Heartily Thanking you in advance….

Nitin Bhatia
Nitin Bhatia
7 years ago
Reply to  A Patel
Parag Tita
Parag Tita
7 years ago

Hi
I have received Token money from Part “A” for sale of my flat & we have entered into a sale agreement of Rs 100 stamp paper which does not mention any time limit. It just mentions that once title search is clear they will proceed with transaction. Now the title search is clear but they have now given notice in newspaper for claims if any against the flat thus wasting my time. Now Party “B” is ready to buy the flat with quick payment. So can i return the token money & proceed with Party “B”.
The sale agreement is not registered.
Thanks in advance Sir

Dhaval Shah
Dhaval Shah
7 years ago

Hi Nitin,

I have recently bought a underconstruction property in Ahmedabad, Gujarat. I have paid the token amount. I am going to take loan from bank for 20L and remaining amount i will pay from my saving. But issue where, builder is demanding to pay Electricity charge, gas connection charge, municipality charge (AUDA, T.P.44), maintenance charge now while doing BANAKHAT, initial agreement to avail loan from bank.

I thought i should be payable only during possession. Please guide.

Thanking You.

Nitin Bhatia
Nitin Bhatia
7 years ago
Reply to  Dhaval Shah

It is subjective and depends on the terms and conditions agreed upon between you and the builder.

Aks
Aks
7 years ago

Hi Nitin,
Thanks for taking time out to write and share wealth of information. I have a query relating to Registration. The property happens to be underconstruction. I have paid the 20% downpayment and the remaining 80% bring funded by bank loan. I have got property registered as required by bank before discussing loan. Now in such a case if I ask bank to disburse say only 60% amount instead of 80% what builder is asking and keep the rest 40% pending until possession what action can builder take? Does builder legally have the ownership of the apartment? Can builder cancel my apartment? What are the repercussions of such a action on the buyer?

Nitin Bhatia
Nitin Bhatia
7 years ago
Reply to  Aks

The answer to your queries will depend on the clauses mentioned in your agreement with the builder. Depending on the payment plan you need to make payment to the builder. For example, if you opted for CLP then with each stage of completed construction, you have to release the payment due else builder will impose penalty and may cancel the allotment depending on terms and conditions in the agreement.

Mayank
Mayank
7 years ago

Hi,

I have a question around – under construction – transfer cases.

I purchased an under construction 2 BHK flat in Gurgaon last year. The original allotee had brought it at 5000 psf in 2009. I purchased it at 8000 psf in 2015. As per IT requirement I had also deducted 1% TDS at 8000 psf rate. Now the project is complete and builder is offering possession. So on which rate my stamp duty will be calculated – 5000 psf or 8000 psf or the circle rate?

Thanks,
Mayank

Nitin Bhatia
Nitin Bhatia
7 years ago
Reply to  Mayank

It will be calculated either on 8000 psf or circle rate.

Akshay tandon
Akshay tandon
7 years ago

Hi
Sir i have purchased a flat in a newly constructed project in noida. The registration of property was not done and the property was transferred by builder from original allottee to me. I have purchased the flat in 80.6 lakhs and it was allotted to previous ower at 64 lkhs. The agreement to sell which i have made with previous owner is 80.6 lakhs. The stamp duty in noida is 5% so the builder is asking me to purchase stamp paper worth 4.03 lakhs which is 5% of 80.6 lakhs but he is asking me that the Consideration for Sale should be mentioned as 64 lakhs.
Now i have two questions:
1) can i or do i have to pay stamp duty of 4.03 lakhs if the consideration of sale value is 64 lakhs.
2) since i want to get my flat registered at full purchase value i.e 80.6 lakhs and that amount is only Mentioned in agreement to sell, what happens if builder doesnt agree to that and in that case how can i show transaction of balance 80.6-64 = 15.4 lacs.

Nitin Bhatia
Nitin Bhatia
7 years ago
Reply to  Akshay tandon

1. Your query is not very clear. You should check with builder on what basis he is demanding stamp duty on 80.6L
2. You have not mentioned whether you are making any payment to builder or not. It seems that 16.6L is the premium you are paying directly to the seller.

Anil
Anil
7 years ago

Hello Sir,
I have an option to purchase a plot in Indore. its size is 4000 sqft and we, 3 friends are planning to buy it. I will take 2000 sqft area and they will take 1000 sqft each. My first question is, at the time of registry do we have option to split current registry in 3 individual parts or we will have to register it under single registry with 2 true copies?
Secondly, In case of single registry with true copies, if one of us wants to sell it out, how does it work, do we have to alter whole registry at that time and have to obtain NOC from other holders or one can sell it without other holders involvement? and if one of them takes objection then can the deal not be done?

Nitin Bhatia
Nitin Bhatia
7 years ago
Reply to  Anil

1. There will be single registration in a joint name and you can mention the proportion of ownership. Your share will be 50% and your friends share will be 25% each.
2. The property can be sold jointly in future. However future transfer among three of you is possible through gift deed or relinquishment deed but the transfer to external party is possible only through consent of all three joint owners.

Swapnil Patil
Swapnil Patil
7 years ago

Hello Nitin Ji,

I am purchasing a flat in Bhopal.
The Flat is a sample flat which is ready to move in. As a part of deal we both agreed at a cost which will include the registry charges along with the flat cost.
Now the builder is saying that he will do the registry on structure and will not show this as a furnished flat.

Please advise what could be the cons in this on my end.
Thanks.

Nitin Bhatia
Nitin Bhatia
7 years ago
Reply to  Swapnil Patil

Sorry i could not understand what is meant by registry on structure.

alok
alok
7 years ago

we purchase a floor by local builders and registry will be done and the house is on loan with HDFC now builders ask me a copy of documents shall we give him a photo copy.

Nitin Bhatia
Nitin Bhatia
7 years ago
Reply to  alok

You have not mentioned which documents he is asking for.

Yogesh Kumar
Yogesh Kumar
7 years ago

Hi Sir

I am going to resale a flat at Kolkata.When buyer is going for a Regesitry his lawyer told him according to registrar in that area lift is mandatory in the society.Presently there is no lift my society. So my question is that how we can do Regesitry of the flat.

Thanks

Nitin Bhatia
Nitin Bhatia
7 years ago
Reply to  Yogesh Kumar

You may check with the association of the society in this regard and how the previous property registration executed for the same society.

Dayanand Prabhu
Dayanand Prabhu
7 years ago

Hi Sir

I am planning to register a flat in Bangalore. I have some confusions regarding value of property for Registration.
If there are chances of selling a flat in future your most of blogs says register at full value but there are 2 values here which one is preferable to register to avoid future taxes if flat is sold.
1. Basic price + Car Parking Charges + Amenities
OR
2. Basic price + Car Parking Charges + Amenities + BWSSB + BESCOM + VAT & Service Tax

First one value is above guidance value and loan value so if registered will difference BWSSB + BESCOM + VAT & Service Tax considered as profit while selling in future or its better to register at 2nd value.

Thanks Dayanand

Nitin Bhatia
Nitin Bhatia
7 years ago

Sorry your query is not clear to me. You have not mentioned have you signed any sale and construction agreement with builder or not.

Dayanand Prabhu
Dayanand Prabhu
7 years ago
Reply to  Nitin Bhatia

Yes i have signed two agreements one is sale and other is construction agrement.

Nitin Bhatia
Nitin Bhatia
7 years ago

Normally the property is registered on sale agreement value or full value. Please check my following post for more details.
https://www.nitinbhatia.in/real-estate/property-registry/

Dayanand Prabhu
Dayanand Prabhu
7 years ago
Reply to  Nitin Bhatia

Hello Sir

My Query was more related to Capital gain tax . let me explain in more details so that you can help me on my Query

I have signed two agreement Sale Agreement and Construction agreement . So now bank asked me to go with the value for registration such that its should exceed Guidance value and Loan amount

Currently i cannot register with value of sale agreement as its less that Guidance value.
So i am left with 2 values for Registration
A. Full value ( Sale + Construction Cost )
B. Loan amount

Construction cost includes Flat Construction cost + Car parking + Amenities + Vat + ST + BESCOM Electric Charges + BWSSB Water Charges . Breakup is not mentioned in Construction agreement but Builder as given breakup in his letterpad

Now if i derive for value matching to loan amount it will be as below
Sales agreement cost + Construction cost ( Only Flat Construction cost + Car parking + Amenities )

Now with this amount if i register the difference amount Vat + ST + BESCOM Electric Charges + BWSSB Water Charges which i have paid to builder which is approx 8 lakhs , wil it be considered as Capital gain in future if i sell the flat

Even if have receipts for total amount paid to builder , I may not have individual receipts for Vat + ST + BESCOM Electric Charges + BWSSB Water Charges which is paid to govt by builder.

So Registered value and Total receipt value will have difference

So please help me on my query will it lead to capital gain

Thanks
Dayanand

Nitin Bhatia
Nitin Bhatia
7 years ago

For capital gain, total consideration value of the property will be considered as cost of acquisition irrespective of registration value. In my opinion, you may opt for full value registration.

Kumar
Kumar
7 years ago

Hi Nitin,

My builder told me that the accounts head will sign the sale agreement as he has the authority.
Is that correct, or the person whose name is mentioned in the title dead as builder should sign the sale agreement

Nitin Bhatia
Nitin Bhatia
7 years ago
Reply to  Kumar

You may ask for article of association of the builder’s company or any board resolution authorizing the accounts head to sign the sale deeds on behalf of the company.

Rumi
Rumi
7 years ago

Hello Sir,
I have purchased an under construction property in Bangalore in 2014. Builder made sale agreement and then construction agreement. Sale agreement equivalent to guidance value and rest has mentioned in construction agreement. SBi sanctioned the loan. I have taken the possession in 2015. Builder has register the flat with guidance value and made one sale deed. Now after reading your post, I become scare.
1> Now the total value mentioned in sale deed is less than what I pay to builder. That means if I sell this property after 3 years, I need to pay more capital gain tax?
2> The previous sale agreement and construction agreement are null and void?
3> I have paid the builder full amount in cheque and through bank loan account. So what is builder interest to register the property undervalue?
4> Do you seen any legal trouble for me in future from govt or bank?
Many thanks in advance. Please help me. I am very worried now.

Nitin Bhatia
Nitin Bhatia
7 years ago
Reply to  Rumi

1. No. You can include construction agreement value in cost of acquisition.
2. No. They are equally valid
3. Save stamp duty
4. No. I don’t foresee any issues.

Rumi
Rumi
7 years ago
Reply to  Nitin Bhatia

Thanks a lot…

Palash
Palash
7 years ago

Hi Sir
As I requested the bank for a home loan of my new ready to move flat, they are forcing me to register my property through the bank’s lawer, and not my own lawer. The bank’s lawer is having good rapport with the developer. So is this a cause of concern if I get the property registered through the bank’s lawer?
I’m really worried as I’m unaware about the problems that I migh face going forward or where I need to be cautious.
Please help!

Nitin Bhatia
Nitin Bhatia
7 years ago
Reply to  Palash

There is a risk involved in such cases. Bank cannot force you. You hire own lawyer, get title search report and get the property registered.

asheesh rastogi
asheesh rastogi
7 years ago

Hi Nitin ji,
Thanks a lot for such a knowledge full site.
I bought a under construction flat from builder in G Noida West will deliver complete project in 2-3 phases 6 towes each on common single area.
1.I will get possession for my flat under phase 1 this year with common park,Parking and back gate amenities only.
Will face phase 2 construction issues in front of us.
2.He may give ph 2 possession for next 4 towers in next year end with some more amenity.
3.continues till whole project completes.

A. Query is can we buyers or I reject possessions asking only on getting complete project complete CC not just getting OC or part CC of 6 towers with small back entry gate with very limited facility.

B. Or at least can i deny his stamp duty and other govt related charges of registery on possession just paying other heavy demanded possession charges and pay stamp duty and registry charges to builder later on Full project CC due to my Finance crunch?

Please guide sir.
Thanks again for wonderful knowledgeable articles.

Nitin Bhatia
Nitin Bhatia
7 years ago

A. if partial OC is available for your tower then you cannot refuse possession.
B. If the unit is ready for possession as i shared in previous point then you cannot refuse amount due to the builder.

asheesh rastogi
asheesh rastogi
7 years ago
Reply to  Nitin Bhatia

Thanks sir for reply. So the query is still remaining can i deny him to pay stamp duty and registry charges on possession saying I will do that by my own later in next 6 months,till then builder can get complete CC of that phase.And take possession with paying other relevant charges.

Nitin Bhatia
Nitin Bhatia
7 years ago

I already answered that you cannot refuse if partial CC is available.

Missuniverse db
Missuniverse db
7 years ago

Dear @nitinbhatia121:disqus
Where can we find your article on property/flat gift registration formalities & procedures .. is there one ? is it possible for u to provide the link please in your reply – thanks

Missuniverse db
Missuniverse db
7 years ago

Dear Nitin Bhatia
Where can we find your article on property/flat gift registration formalities & procedures .. is there one ? is it possible for u to provide the link please in your reply – thanks

Missuniverse db
Missuniverse db
7 years ago

Dear @nitinbhatia121:disqus
Where can we find your article on property/flat gift registration formalities & procedures .. is there one ? is it possible for u to provide the link please in your reply – thanks

Nitin Bhatia
Nitin Bhatia
7 years ago

Currently there is no dedicated post. I will share the same shortly. Thanks for suggesting the topic.

Nitin Bhatia
Nitin Bhatia
7 years ago

Registration is already done on UDS. The registration of flat is not required.

Rajan Sekhri
Rajan Sekhri
7 years ago

Hello Sir,
I have one question.
I want to know about my long term capital gain tax applicable if I sell my only flat and within 2 months I buy immediately a new flat for myself with that money for my personal use.

Thanks and Regards,
Rajan Sekhri.

Nitin Bhatia
Nitin Bhatia
7 years ago
Reply to  Rajan Sekhri

If you invest 100% capital gain in new property then the LTCG will not be applicable.

Lavneesh Chandna
Lavneesh Chandna
7 years ago

Hi Nitin,

In case of a sale agreement and work order where the value of both is less than 50 lacs but the overall value is more than 50 lacs, will tds need to be deducted?

Nitin Bhatia
Nitin Bhatia
7 years ago

It depends whether both the agreements are signed with same party or different party.

Najmul Ahasan
Najmul Ahasan
7 years ago

Hi Nitin,
I have bought a under construction flat from AWHO (Army welfare housing organisation) at Kolkata as an original allottee and have paid 64L for it, but the registering authorities have put the market value to be 1.2 Crores. Even though AWHO is a registered society and I am the original allotte and paying the agreed sum between AWHO and Self how can registration be done at market value? Please can you explain. my mail id is najmulahasan@gmail.com

Nitin Bhatia
Nitin Bhatia
7 years ago
Reply to  Najmul Ahasan

You cannot register below the govt defined value i.e. market value in this case. This rule is prevent any evasion of stamp duty.

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