Making property deals transparent

The apex court’s ruling that a general power of attorney (GPA) will not give ownership title to the buyer and that immovable property can legally and lawfully be transferred only by a registered deed of conveyance will make real estate transactions more transparent, thereby safeguarding and protecting the interests of consumers.

The apex court’s ruling that a general power of attorney (GPA) will not give ownership title to the buyer and that immovable property can legally and lawfully be transferred only by a registered deed of conveyance will make real estate transactions more transparent, thereby safeguarding and protecting the interests of consumers.

HT Image

Real estate developers and property experts point out that though it may not have “significant impact” on the organised realty market, the ruling will go a long way in curbing evasion of duties, flow of black money into real estate and prevent bonafide purchasers from becoming victims at the hands of those selling the same property to multiple people in the absence of verification or certification of title.

Real estate transactions are set to become a lot more transparent with the Supreme Court ruling curbing the sale of immovable properties through power of attorneys.

While, stamp duties and registration are known to be one of the largest sources of revenue for state governments, these duties more often than not have tended to impose high compliance costs on taxpayers. Consequently, these duties have been subject to considerable evasion.

With a large percentage of properties, specifically with the Delhi and NCR regions, resorting to sales through power of attorneys — the mutation of property does not reflect in the municipal and revenue records on account of rights, title or interest in the property not being passed on POAs, which are primarily just sale agreements.

This ruling which clamps down on such sales will not only help curb evasion of duties, but also limit the amount of black money in the real estate sector.

Most importantly, the ruling will help establish clear titles to property, thereby safeguarding and protecting the interests of consumers, said Sachin Sandhir, managing director, RICS South Asia, a global self-regulatory professional body for qualifications and standards in land, property and construction.