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Land Records & Titles
  • By: Adv. Jayatinn B Laalwani
  • Date: 31 Oct 2019
  • Property
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  • Views:60
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In India, the land is a valuable asset; its value depends on its location and the growing population. The demand for land keeps on increasing, while the supply is limited. Access to land impacts the livelihoods, industrial, economic and social growth. The ownership of land is determined by the title of the land. The title of the land should be clear so that it protects the rights of the title-holder against the claims made by others for that particular property.

Land ownership in India is determined through different records such as sale deeds, government survey records and property tax documents, but these documents are not a guaranteed title to the property by the government as those are only a record of the transfer of property. Land records consist of types of information which are maintained in the government offices of different districts and villages. Poor land records could affect the transactions of future property.

Need For Clear Land Titles

There are various lands in India, the titles of which are unclear due to several reasons. Land titles are unclear due to legacy issues and the gaps in the legal framework, poor administration of land records and zamindari system. Thus, the unclear land records lead to legal disputes of its ownership, which affects the sector of agriculture and real estate. The land is also used as collateral for obtaining loans by farmers. Disputed lands lead to a lack of transparency in real estate transactions, making them inefficient in the market. To execute the new projects, it requires clarity on the value and ownership of the land; therefore, it becomes difficult in the absence of clear land titles.

Under new urban development schemes, cities try to raise their revenue by way of land-based on financing and property taxes. It becomes necessary to provide a clear land title in urban areas.

Why Are Land Titles Unclear?

In India, ownership of land is presumptive. The Transfer of Property Act, 1882 and the Registration Act, 1908lists down the provisions relating to the sale or transfer of the land.  Therefore, the registration of the property refers to the registration of the transaction and not the title of the land. While registering the transaction of property, the buyer has to pay a registration fee along with the stamp duty. The rates of stamp duty are calculated on the cost of the property and vary from state to state.

It raises the cost of property transactions, which leads to avoiding the registration of the transaction. All transaction of the property is not mandatory to register, under the Registration Act, 1908. It includes the acquisition of land by the government, heirship partitions, court orders, and property leased for less than a year.

Land records contain various types of information such as details of the property, past transactions, details of property mortgage, etc. Mistakes are often noted in land records at the departments. For example, the transaction of a registered property through a sale deed may not be updated in the survey department.

Legal Framework

The transfer of land or property is recorded through a sale deed, which is to be registered under the current legal framework. Transfer of land takes place through sale, purchase, mortgage, tenancy, inheritance, etc. The Transfer of Property Act, 1882 states that the right, title and the interest of the land can be transferred through a registered instrument.

According to Registration Act, 1908, while registering a sale deed, it is checked whether the last sale deed was recorded correctly. At the time of registration, the details of the buyer and seller are checked and verified through various identity proof documents. Registration of sale deed makes the document of transfer a permanent public record which helps in monitoring and verifying under whose name the land was previously registered in the land records. If a sale deed is not registered, then it is not admissible as evidence for ownership in the court of law.

The onus of checking the validity of the title of land is on the buyer. It is challenging to carry on the process of verification if the records of land are not maintained in the government departments.

In a dispute over the title of a land/property, the parties asserted that the title is placed on their name and it should be reflected in the revenue records. Recently in January 2019, in the case ‘Smt. BhimabaiMahadeoKambekarVs, Arthur Import and Export Company’, the Supreme Court clarified the law that the mutation entry of land in the revenue records does not create or extinguish the title over the land. The mutation entries are maintained for the commercial purpose and to ensure that the land revenue is paid by the person whose name is recorded.

The records maintained are supposed to reflect the changes as some transactions like gift deed are to be kept in revenue records and not necessarily required to be registered under the registration act. Since land is a concurrent subject in Indian Constitution, both centre and state have law-making power.

The Indian Constitution has clubbed the maintenance of land records, land revenue, survey and records of right in the State List. Whereas in Concurrent list, the subjects listed by parliament are stamp duty, registration act, transfer of property act, etc. have a direct bearing on land records. In order to rectify the anomaly in the land situation, the central government had drafted the Model Land Titling Bill, 2011, which aimed to move towards establishing the titles under the government notification. The government launched the National Land records Modernizing Program 2008 to address the issue of land titling in India.

Unfortunately, due to some primary reasons like unexplained clarification of inadequate land records, unexplained functioning of authorities in the current system, the bill did not create many blends in the State Legislature.

In R.SureshBabuvsG.Rajalingam And 2 Others, the High Court of Andhra Pradesh stated that the registration of every document is compulsory under the Indian Registration Act. Such document if not registered, will not be allowed/ enforceable for the purpose of specific performance. Any unregistered document will not be allowed to submit as proof of the act of registration or any claim for any property. Such a document will not be admissible in the court of law. This decision provided by the Andhra Pradesh High Court is subject to changes if appealed in the Supreme Court.   

Conclusion

After the enactment of the Real Estate Regulation Act (RERA), 2016 mandates the State Government to title the upcoming real estate transaction. It has put a significant impact on the poor records of titles. The system of maintaining records envisaged under the Registration Act runs parallel to the records maintained by the revenue department. Real estate has become an area where the absence of a transparent system of titling has an enormous transaction cost.

A solution to the problem of land titling lies in the upcoming technology drive that should be initiated in the legislative. The use of artificial intelligence-based solutions can be used to track the illegal constructions and incomplete title records of land.

Read More

Land Records & Titles

By: Adv. Jayatinn B Laalwani Property 31 Oct 2019

In India, the land is a valuable asset; its value depends on its location and the growing population. The demand for land keeps on increasing, while the supply is limited. Access to land impacts the livelihoods, industrial, economic and social growth. The ownership of land is determined by the title of the land. The title of the land should be clear so that it protects the rights of the title-holder against the claims made by others for that particular property.

Land ownership in India is determined through different records such as sale deeds, government survey records and property tax documents, but these documents are not a guaranteed title to the property by the government as those are only a record of the transfer of property. Land records consist of types of information which are maintained in the government offices of different districts and villages. Poor land records could affect the transactions of future property.

Need For Clear Land Titles

There are various lands in India, the titles of which are unclear due to several reasons. Land titles are unclear due to legacy issues and the gaps in the legal framework, poor administration of land records and zamindari system. Thus, the unclear land records lead to legal disputes of its ownership, which affects the sector of agriculture and real estate. The land is also used as collateral for obtaining loans by farmers. Disputed lands lead to a lack of transparency in real estate transactions, making them inefficient in the market. To execute the new projects, it requires clarity on the value and ownership of the land; therefore, it becomes difficult in the absence of clear land titles.

Under new urban development schemes, cities try to raise their revenue by way of land-based on financing and property taxes. It becomes necessary to provide a clear land title in urban areas.

Why Are Land Titles Unclear?

In India, ownership of land is presumptive. The Transfer of Property Act, 1882 and the Registration Act, 1908lists down the provisions relating to the sale or transfer of the land.  Therefore, the registration of the property refers to the registration of the transaction and not the title of the land. While registering the transaction of property, the buyer has to pay a registration fee along with the stamp duty. The rates of stamp duty are calculated on the cost of the property and vary from state to state.

It raises the cost of property transactions, which leads to avoiding the registration of the transaction. All transaction of the property is not mandatory to register, under the Registration Act, 1908. It includes the acquisition of land by the government, heirship partitions, court orders, and property leased for less than a year.

Land records contain various types of information such as details of the property, past transactions, details of property mortgage, etc. Mistakes are often noted in land records at the departments. For example, the transaction of a registered property through a sale deed may not be updated in the survey department.

Legal Framework

The transfer of land or property is recorded through a sale deed, which is to be registered under the current legal framework. Transfer of land takes place through sale, purchase, mortgage, tenancy, inheritance, etc. The Transfer of Property Act, 1882 states that the right, title and the interest of the land can be transferred through a registered instrument.

According to Registration Act, 1908, while registering a sale deed, it is checked whether the last sale deed was recorded correctly. At the time of registration, the details of the buyer and seller are checked and verified through various identity proof documents. Registration of sale deed makes the document of transfer a permanent public record which helps in monitoring and verifying under whose name the land was previously registered in the land records. If a sale deed is not registered, then it is not admissible as evidence for ownership in the court of law.

The onus of checking the validity of the title of land is on the buyer. It is challenging to carry on the process of verification if the records of land are not maintained in the government departments.

In a dispute over the title of a land/property, the parties asserted that the title is placed on their name and it should be reflected in the revenue records. Recently in January 2019, in the case ‘Smt. BhimabaiMahadeoKambekarVs, Arthur Import and Export Company’, the Supreme Court clarified the law that the mutation entry of land in the revenue records does not create or extinguish the title over the land. The mutation entries are maintained for the commercial purpose and to ensure that the land revenue is paid by the person whose name is recorded.

The records maintained are supposed to reflect the changes as some transactions like gift deed are to be kept in revenue records and not necessarily required to be registered under the registration act. Since land is a concurrent subject in Indian Constitution, both centre and state have law-making power.

The Indian Constitution has clubbed the maintenance of land records, land revenue, survey and records of right in the State List. Whereas in Concurrent list, the subjects listed by parliament are stamp duty, registration act, transfer of property act, etc. have a direct bearing on land records. In order to rectify the anomaly in the land situation, the central government had drafted the Model Land Titling Bill, 2011, which aimed to move towards establishing the titles under the government notification. The government launched the National Land records Modernizing Program 2008 to address the issue of land titling in India.

Unfortunately, due to some primary reasons like unexplained clarification of inadequate land records, unexplained functioning of authorities in the current system, the bill did not create many blends in the State Legislature.

In R.SureshBabuvsG.Rajalingam And 2 Others, the High Court of Andhra Pradesh stated that the registration of every document is compulsory under the Indian Registration Act. Such document if not registered, will not be allowed/ enforceable for the purpose of specific performance. Any unregistered document will not be allowed to submit as proof of the act of registration or any claim for any property. Such a document will not be admissible in the court of law. This decision provided by the Andhra Pradesh High Court is subject to changes if appealed in the Supreme Court.   

Conclusion

After the enactment of the Real Estate Regulation Act (RERA), 2016 mandates the State Government to title the upcoming real estate transaction. It has put a significant impact on the poor records of titles. The system of maintaining records envisaged under the Registration Act runs parallel to the records maintained by the revenue department. Real estate has become an area where the absence of a transparent system of titling has an enormous transaction cost.

A solution to the problem of land titling lies in the upcoming technology drive that should be initiated in the legislative. The use of artificial intelligence-based solutions can be used to track the illegal constructions and incomplete title records of land.

Read More
Comments:
Views: 60
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The Real Estate (Regulation & Development) Act

By: Adv. Ayantika Mondal Property 24 Sep 2019

The Real Estate (Regulation and Development) Act gave India’s real estate sector its first regulator from, May 1, 2016. It seeks to bring clarity and fair practice that would protect the interests of buyers and also impose penalties on errant builders.

RERA seeks to address issues like delay in possession, price issues, quality of construction, title, and other changes. Delay in projects is the most significant issues faced by buyers. Projects launched are often delayed due to several reasons. The reasons include deviation of funds to other projects, change in regulations by the authorities, the environment ministry, national green tribunal, involved in infrastructural development many places; the land acquisition becomes an issue, etc. Some builders often sell projects to investors without the approval of the plan or with poor quality of construction or unauthorized construction; such projects are often stuck in long litigation battles.

RERA establishes a state authority which will govern both residential and commercial real estate transactions. It ensures more clarity between the developers and buyers.

Homebuyers have been complaining fora long time about unbalanced real estate transactions heavily in favour of the developers. It aims to create a more impartial and equitable transaction between the seller and the buyer of properties. This Act mandates each state and union territory, to frame the rules which shall govern the functioning of the regulator.

Ongoing projects where the completion certificate or the occupancy certificate not been issued, are also required to comply with the registration requirements as per the Act. At the time of applying for registration, the promoters are required to provide in-depth information on the project, i.e., land status, details of the developer, promoter, approvals, schedule of completion, etc. Only when registration is completed, and other permissions related to construction are in place, then the project can be marketed.

One of the primary reasons for the delay of projects is that the funds collected from one project would invariably be diverted for funding different projects. To prevent such diversion, promoters are now required to deposit 70 percent of all project receivables into a separate account. These project receivable can only be used towards land and construction expenses and will be required to be certified by a professional.

Objectives of RERA

  1. To protect the interest of the customer in the real estate sector.
  2. To establish ways for a quick settlement of the dispute.
  3. Sale of the building, plot, an apartment to be transparent.
  4. To form the Appellate Tribunal to hear appeals.

Salient Features

RERA was established for enhancing accountability and transparency with respect to real estate transactions.

Following are the salient features of enacting RERA:

  1. All real estate projects should be registered under RERA.
  2. The registration of a particular project can be cancelled ifRERA authority receives any complaint to be true after an inquiry.
  3. A property cannot be sold if not registered with RERA.
  4. It is mandatory to upload the details of the project on the official website of RERA.
  5. If the buyer has any complaints against the builder regarding the violation of the provisions or rules of the RERA Act, they can file a complaint with the RERA authority. 
  6. If any decision of RERA is not satisfactory, the aggrieved party can submit an appeal before the Appellate Tribunal.

Benefits of RERA Registration

  1. Prevention of Funds: RERA prevents insolvency by creating a separate Escrow account for borrowers related to all transactions of real estate.
  2. Authenticity: The Certification of RERA assures confirmation to the promoters and brokers as it will attract more buyers in the future.
  3. Complaints: The registered promoters and brokers are empowered to file a complaint with an appropriate authority.
  4. Flexibility: RERA makes it convenient for the promoters to choose the date of delivery of the project as per their wish.
  5. Professionalism: This Act is for strengthening the real estate industry as well as it helps in creating a sense of professionalism.
  6. Defined Carpet Area: Before enacting RERA, the method by which builders calculated the price of the project was not precisely defined. Whereas, RERA has defined the standard formula for calculating the carpet area, to avoid the promoters in providing inflated carpet areas to increase the prices.
  7. Penalty Interest: Prior to RERA, if promoters delay the possession, the interest paid by the builder was much lower than paid by the buyers for delay in payments. This has changed with RERA; now both the parties have to pay the same amount of interest to each other in case of a penalty.
  8. Defect in Title: If buyers discover that there is a defect in the title of the property, at the time of possession, the buyer can claim the compensation, and there will be no limit to the amount to be compensated.
  9. Payment in Advance: As per RERA rules, a builder cannot take more than 10% of the project cost from the buyer as advance fees. This helps the buyer to arrange for the next payment as per the payment schedule discussed between builder and him. It gives time to the buyer for sourcing the funds. 

Real estate (regulation and development) Act, 2016 was implemented for better regulation of the real estate market. It stated that for better governance a real estate act was necessarily dealing with purchase, sale of land further pushing for a transparent dealing in land and other incidental requirements for such transaction between allotter and allottee. The Act specifically mentioned that the person to whom land is been sold should have clear detailed idea about the sanction plan, it was doubtful that person who administer the land as owner through power of attorney may not have the detail of sanction plan as the buyer of the land had or will have, so to make it more transparent it was suggested or is advised by the Act to upload the action plan, sanction plan and all other detail as suggested by the Act on website of the seller for public knowledge. In one of the recent rulings in the year 2018, under Ferani Hotels Pvt. Ltd. v/s The State Information Commissioner Greater Mumbai & Others said that “the fate of purchase of land development and investment is a matter of public knowledge and debate, any judicial pronouncement should squarely weigh full disclosure in this behalf. Further stating the court said any display of the action plan by the signboard or any other as stated in the act would not violate any provision under Right to Privacy, stating further the court stated that such display of information relating to land is not in nature of personal information against which contention can be tenable. It was advised that contrary to making it applicable to display sanction/ layout plan at the site land, to suggest a direction in which such information should be displayed resulting in hampering of any intelligent mischief born in the minds of culprit resulting in violation of the provisions of Act, objective enunciated was to provide a better governance and transparency in dealing and administering the land.

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All About 7/12 Extract

By: admin Property 18 Apr 2019

It is seen that massive list of documents with complicated terms is required for the purchase of properties. 7/12 Extract is one of these documents. This document is precisely needed when a buyer is looking to purchase plots. It is, traditionally called as “Saath Baara Utara” in Maharashtra, which is an extract from the land register of the district, maintained by the revenue department of the government in the state of Maharashtra. It is a document which gives complete information about a particular piece of land. It includes details such as the survey number, area, date from which the current owner's name has registered etc.

Generally, the Tehsildar or any other concerned land authority issues the 7/12 extract. One can pay the official fee to get a copy of the 7/12 extract.

The 7/12 document or ‘Record of Land Rights’ is used for looking up the ownership of ancestral land in a village, this helps in checking past conflicts, or any litigation orders passed affecting the land or any existing litigation. 7/12 extract has a record of all the activities that have been conducted on the land. The record also establishes the identity of the land legally, covering the natural aspects of the surroundings. Whether it is agricultural land, the document also has a history of the crops that were last cultivated in the land.

How to get 7/12 extract?

7/ 12 extract can be obtained by visiting the nearest Tehsildar’s office and applying for the 7/12 document for the particular tenure. It can be obtained from the concerned government’s website. Visit the website and find your desired locality in the district map to view the 7/12 extract. 

You may get the result by following these steps:

  1. By selecting the Taluk and Village details from the corresponding lists.
  2. By selecting any of the following options and entering the essential information and search for the required 7/12 extract details.
  3. Query by Survey No.— If you know the survey number of the property, you can use this option to search for the 7/12 extract.
  4. Query by Name — This option allows you to search for the 7/12 extracts by name
  5. Click on Show 7/12.

The government has introduced two software system E-chavdi and E-mutation to bring clarity to the process of obtaining 7/12 extracts. This software will enable the Talathis to obtain soft copies of the 7/12 extracts.

Maharashtra Land Revenue Code,1966 by Section 148-159 provides for maintaining the Record of Rights in every village. It so governed by the rules made under (Maharashtra Land Revenue Record of Rights and Registers (Preparation and maintenance) Rules 1971, rules – 3, 5,6,7,9 and 29.

The 7/12 extract contains the following information about the land;

- Survey number of land
Area of the land – Fit for cultivation
- Changes in ownership
- Mutation numbers
- Type of land (agricultural or non-agricultural)
- Type of irrigation (irrigated type or rainfed type)
- Details pending loans for buying seeds, pesticides or fertilisers
- Information about the kind of crops planted in the last cultivating season
- Details of pending litigations, if any
- Details of tax paid and unpaid

Uses of 7/12 extract or Saat Baara Utara

The primary uses of 7/12 extract are as follows:
- Proof of Ownership
- Land type & Activities
- Agricultural Information
Property Sale Transaction
- Bank Loan
- Civil Litigation

Note: To learn more about the laws and procedures, you can contact us at Legato app where we help you in connecting with experienced lawyers who can assist you with the documentation and procedural aspects.
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