Why is registration of property mandatory?

Every transaction of the Real estate needs to get registered for the sake of security for both buyer and seller. Registration of property is not only legally mandatory but is a document of terms & conditions and the amount at which the deal was affected. Registration of property is also necessary as it is a document of contract and registration of a contract is beneficial to all parties of the contract.


The law for registration of documents is provided in the Indian Registration Act. This legislation provides for the registration of various documents, to ensure conservation of evidence, prevention of fraud and assurance of title.


Section 17 of the Registration Act, 1908, mandates registration of all transactions that involve the sale of an immovable property for a value exceeding Rs 100. This effectively means that all the transactions of sale of immovable property have to be registered, as no immovable property can be purchased for merely Rs 100. Likewise, all transactions of a gift of an immovable property, as well as the lease for a period exceeding 12 months are also mandatorily required to be registered.



In special cases, when a party to the transaction cannot come to the sub- registrar’s office, the sub-registrar may depute any of its officers to accept the documents for registration, at the residence of such person. The term ‘immovable property’ includes land, buildings and any rights attached to these properties.

Procedure and documents required

The property documents that need to be registered should be submitted to the office of the Sub-Registrar of Assurances within whose jurisdiction the property, which is the subject matter of transfer, is situated. The authorized signatories for the seller and the purchaser have to be present along with two witnesses, for registration of the documents.

The signatories should carry their proof of identity. Aadhaar Card, PAN Card, or any other proofs of identity issued by a government authority are the documents that are accepted for this purpose. The signatories representing someone else will also have to furnish the power of authority.  In case a company is party to the agreement, the person representing the company has to carry adequate documents, like a power of attorney/letter of authority, along with a copy of the resolution of the company’s board, authorizing him to carry out the registration.

You need to present the property card to the sub-registrar, along with the original documents and proof of payment of stamp duty. Before registering the documents, the sub-registrar will verify whether adequate stamp duty has been paid for the property, as per the stamp duty ready reckoner. In case there is any deficit in the stamp duty, the registrar will refuse to register the documents.

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Time limit and fee payable

Documents that have to be mandatorily registered should be presented within four months from the date of their execution, along with the requisite fee. In case the time limit has expired, you can make an application to the sub-registrar for condonation of the delay, within the next four months and the registrar may agree to register such documents, on payment of a fine that may be up to ten times the original registration fee. The registration fee for property documents is 1% of the value of the property, subject to a maximum of Rs 30,000.

Earlier, the documents that were presented for registration, would be returned to you after a period of six months. However, with computerization of the offices of sub-registrar, the documents (bearing the registration number and proof that the documents have been registered by the registrar) are scanned and returned to you on the same day.


Impact of non-registration

Failure to register the purchase agreement of a property could put you at a high risk. Any document that is mandatorily required to be registered but is not registered, cannot be admitted as evidence in any court of law.

Which is better option : Real estate investment in an upcoming or a developed area.

Prices in real estate are subject to the location of the property. The more posh the address is more is the cost of land, The quality of infrastructure is also a crucial factor in the determination of property’s prices. There are many more price determinants that decide the cost of the property. Here we shall take a review of such elements.

As discussed above the prices of land in a posh locality are subject to the demand of the seller. Here, the buyer has very fewer chances of price negotiation. Resultant, buyers opt for an upcoming location that offers lower rates. But, buyers should also consider the potential and price appreciation, habitability of the area and its infrastructure before making an investment.

Rapid urbanization has led to the emergence of new suburbs and peripheral areas around metropolitan cities. These newly-created residential markets have their own set of development types (apartments, row houses, villas and plots), price points (affordable, mid, premium and luxury) and buyer-investor categories. However, the moot question is whether these new destinations offer a safe option for property investment.

The biggest advantage of buying a house in an upcoming residential destination is the relatively affordable price of units. Often, apartment projects in an upcoming region, come with inaugural discounts to lure early investors. Prospective buyers can strike a good bargain here. However, investing in such locations also has its own set of risks.


Negligible appreciation for a few years

An upcoming area is likely to lack certain necessary basic infrastructure. Hence, appreciation in property prices may be zero or negligible for several years. There could be multiple reasons for this, such as delay in the construction of a connecting road or surrounding infrastructure. It is a big risk for those putting in their money. Usually, it is advisable to put money into established properties and localities.


Construction hassles and habitability

An upcoming region where a number of developers are constructing their projects may not be habitable for several years. While apartments may be ready, the constant movement of heavy construction vehicles, dust and poor road conditions may make such areas inhabitable. A Person who buys  a flat in an upcoming area always plans to shift only after one or more year due to these problems, even though his flat is ready. While a few towers in the project are ready for possession, towers and projects nearby, are still under-construction. Thus he prefers to live on rent for such period.


Out of the many developers in an upcoming area, very few developers complete and offer possession to buyers. Many real estate brokers state the upcoming areas will take around 4-5 years to have the quality basic infrastructure, similar to developed areas.


What should you do?

While there are risks and challenges, there is a price advantage when it comes to making a real estate a viable investment in an upcoming area.If you are undertaking a property search, weigh your options before investing in an upcoming suburb that is far away from established localities. While the house may cost less, you may have to spend more on your daily commute.

Also, check the proximity to amenities and other developed localities. Localities that have a supermarket, a school, access to a major expressway or a train line, and local shops within a four-five kilometer radius, are likely to become future hubs for homeowners.