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Q.1
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What is the purpose of registration?
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A.
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- By Registration of transaction of immovable property will become permanent public
record. This is a notice to the general public. Those getting transfer of property
should verify whether such property has been previously encumbered.
- According to Transfer of Property Act right, title or interest can be acquired only
if the deed is registered.
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Q.2
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What is the difference between Built-up area,Superbuilt-up area and Carpet area?
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A.
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- Carpet Area is the area enclosed within the walls, actual area to lay the carpet.
This area does not include the thickness of the inner walls. It is the actual used
area of an apartment/office unit/showroom etc.
- Built up Area is the carpet area plus the thickness of outer walls and the balcony.
- Super Built Up Area is the built up area plus proportionate area of common areas
such as the lobby, lifts shaft, stairs, etc. The plinth area along with a share
of all common areas proportionately divided amongst all unit owners makes up the
Super Built-up area. Sometimes it may also include the common areas such, swimming
pool, garden, clubhouse, etc. This term is therefore only applicable in the case
of multi-dwelling units.
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Q.3
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What is the difference between lease and leave and licence agreement?
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A.
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Lease is defined under Section 105 of The Transfer of Property Act,1882 and a lease
of immoveable property is a transfer of a right to enjoy such property for a certain
time or in perpetuity on consideration to be rendered periodically or on specified
occasions, while a licence is defined in Section 52 of the Indian Easement Act,1882
and it does not create any interest in the premises in favour of the licensee excepting
a mere right to use and occupy the premises for a limited duration. Both documents
have now to be registered. A lease deed is required to be stamped and registered.
However the stamp duty payable on lease is more than on Leave and Licence for a
period upto three years. For a period exceeding three years the stamp duty is same
for both agreements. The implications of entering into a lease agreement would be:
i) That stamp duty would have to be paid ii) That the document would have to be
registered iii) That Municipal taxes may go up iv) Of course, Income-tax would have
to be paid on your income; and v) The question of Wealth-tax would have to be considered.
One property is exempt from Wealth-tax. However, if you have any other property,
this implication would have to be considered.
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Q.4
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What is the difference between a Khata and a Title Deed?
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A.
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A khata is an account of assessment of a property for the payment of tax. The khata
does not confer ownership. However, the title deed is the document through which
a person derives a title or ownership of the said property.
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Q.5
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What should a lessee or occupant keep in mind while purchasing a office?
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A.
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Some of the factors a lessee or occupant must keep in mind while rent a office is:
- Locality i.e. transport, schools, hospitals, market, business district, entertainment
centres, hotels, restaurants, pollution levels
- Quoted area of the office i.e. Carpet, Built Up Area and super Built Up Area
- Car parking space
- State of the premises, quality of construction, fixtures and fittings in the premises
- Reputation of the Lessor
- Sufficient water and electric supply, other utilities
- Cost components: rent, stamp duty, registration charges, transfer fees, monthly
outgoings and society charges, costs of utilities.
- Any other distinguishing features or advantages of the property
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Q.6
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On what basis is the rent charged?
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A.
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Rent for a premises can be charged either on floor area or lumpsum charge for the
premises. Usually office or shop premises are charged rent on floor area.
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Q.7
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What are non-occupancy charges?
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A.
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Non occupancy charges are levied by the society when the owner himself does not
reside in the office but rents it out to a third party.
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Q.8
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What are types of documents to be signed for renting an office or a shop?
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A.
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Documents generally prevalent for renting offices or shops can be a lease, leave
and licence agreement, business centre agreement or conducting rights agreement.
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Q.9
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What should I inspect in a premises before renting it?
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A.
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You should learn as much as you can about the condition of the premises before you
hire it. You need to investigate the condition of the property and all its systems
such as :
- plumbing systems, drainage, water faucets and sanitary fittings
- electrical systems, circuit breakers, wires, capacity of the electric meter, functioning
of light fittings
- roof, walls, ceilings, floors, paintwork
- foundation, basement and visible structures
- doors and windows, latches, locks
- structural stability of the building
- fixtures and fittings
- electrical load
- water supply
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Q.10
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Checklist for renting commercial property?
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A.
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- Market Trends about prevalent rates of property in the vicinity and last known transactions
- Identify the property you wish to rent
- Formulate commercial terms
- Distinguish between terms and conditions of the contract which are negotiable and
those, which are fixed eg. Rent, payment schedule, time of completion etc.
- Compile or Ask for photocopies of the all deeds of title related to the property
to be purchased. Examine the deeds to establish the ownership of the property by
the Lessor, preferably through an advocate. Ascertain the survey number, village
and registration district of the property as these details are required for registration
of the sale. Previous encumbrances and loans, if any on the property must be cleared
before renting of the property. The title of the Lessor must be clear and marketable
- Finalize commercial terms. Ascertain stamp duty, registration charges and outgoings
to be paid i.e. property tax, water and electricity charges, society charges, maintenance
charges
- Request Lessor to obtain, if applicable, consent, permission, sanction, no objection
certificate of various authorities such as the (a) society (b) any other authority
- Permanent Account Number of Vendor and Purchaser under Income Tax laws
- Payment of stamp duty on the formal agreement or document for transfer of the property,
signing by both the Vendor and Purchaser and registration
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Q.11
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Checklist for selling commercial property?
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A.
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- List out all deeds of title related to the property under sale. You may be required
to give photocopies of the deeds to the potential purchaser. Ascertain the survey
number, village and registration district of the property as these details are required
for registration of the sale.
- Prevailing market rates in the vicinity, current market trends and last known transactions.
- Formulate commercial terms i.e. price, payment schedule, transfer fees, statutory
charges eg. stamp duty. Distinguish between negotiable and fixed terms and conditions
of the contract eg. Price, payment schedule, time of completion etc.
- Finalise commercial terms of sale.
- Obtain, if applicable, consent, permission, sanction no objection certificate of
various authorities such as the.
- Society
- the income tax authority
- Municipal Corporation
- the competent authority under the Urban Land Ceiling and Regulation Act
- any other authority
- Check if the purchaser will be taking a loan for payment of the consideration amount.
Ask for a pre approval letter from the lending institution.
- Permanent Account Number of Purchaser under Income Tax law.
- Payment of stamp duty on the formal agreement or document for transfer of the property,
signing of document by both parties and registration.
- After receiving the entire sale price hand over legal possession of the property
alongwith documents of title in original.
- Change name of the holder of the property to the purchaser in the records of the
society, electricity company, municipal corporation, Index II etc.
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Q.12
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Does one have to pay any amount for registration of the sale/transfer documents?
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A.
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Yes. Registration of sale/transfer documents will involve payment of registration
fee, as prescribed in the Registration Rules and as applicable in the States in
India, where the Property is situated.
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Q.13
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What You Should Do Prior to Land Registration?
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A.
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In real estate laws, the first thing that you are advised to do is to get in touch
with a licensed or well known land surveyor. The surveyor can take the exact measurements
of the land including its borders. It saves you from a number of troubles later.
It is also advisable to contact the Survey Department and obtain a survey sketch
of the land but this is not easy to accomplish. Red-tapism in these departments
makes it difficult for an ordinary person to get the sketch. However, give it a
try. This comes in handy when you want to make a comparison to assure yourself of
the accuracy of measurements.
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