FAQ's(Frequently asked questions)

 

What is the difference between Leases and Leave and Licence Agreement?

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:

  • That stamp duty would have to be paid
  • That the document would have to be registered
  • That Municipal taxes may go up
  • Of course, Income-tax would have to be paid on your income
  • 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.

 

What is the difference between Built-Up Area, Super Built-Up Area and Carpet Area?

Carpet Area: This is the area of the apartment/building that does not include the area of the walls. 
Built-Up Area: This is the area of the apartment/building including the area of the walls. 
Super Built-Up Area: This includes the Built-Up Area along with the area under common spaces such as the lobby, lifts, stairs etc. This term is therefore only applicable for multi-dwelling units.

 

What should a buyer keep in mind while purchasing a residential apartment?

Some important points to keep in mind while buying a residential apartment are:

  • Locality â Proximity to workplace, educational institutions, hospitals, shopping areas, entertainment center, transportation, pollution levels.
  • Quoted area of the flat i.e. Carpet, Built Up Area and Super Built Up Area
  • Car parking space
  • Quality of construction
  • Reputation of the builder or seller
  • Sufficient water and electric supply and other utilities
  • Cost components like price, stamp duty, registration charges, transfer fees, maintenance charges and other payments
  • Appreciation of the property for resale and rental
  • Other distinguishing features or advantages of the property

What is a Sale Deed?

Sale Deed also known as Conveyance Deed is a document by which the seller transfers his right to the purchaser, who, in turn, acquires an absolute ownership of the property. The document is executed subsequent to the execution of the sale agreement and after compliance of various terms and conditions detailed in the sale agreement.

 

Which documents are to be verified before purchase of a Flat?

Before you purchase a flat, you have to have a title and document search conducted by a competent advocate. You cannot do it yourself. You have to use the services of a competent advocate. It is a professional job to be done with professional assistance.

 

What are all the important documents one should check before buying any property?

If you want to purchase a property, you have to look at the approved layout plan, approved building plan, ownership documents, carryout search, etc. Contact an advocate before you purchase a property so that he can advise you.

Before you purchase a flat, you have to have a title and document search conducted by a competent advocate. You cannot do it yourself. You have to use the services of a competent advocate. It is a professional job to be done with professional assistance.

 

Which documents must be compulsory registered?

The following documents are required to be registered compulsorily under the Indian Registration Act, 1908:

  • Every time the immovable property is sold/purchased, the agreement needs to be registered.
  • Instrument of gift of immovable property
  • Other non-testamentary instruments which purport or operate to create, declare, assign, limit or extinguish, whether in future or in present, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards to or in immovable property.
  • Non-testamentary instruments which acknowledge the receipt or payment of any consideration on account of creation, declaration, assignment, limitation or extinction of any such right, title or interest;
  • Lease of immovable property from year to year or for any term exceeding one year or reserving a yearly rent. But the State Government may publish an order in official gazette exempting any district or a part of a district or a lease that does not exceed the term of five years and the annual rent of which does not exceed Rs. 50/- .
  • Non-testamentary instruments transferring or assigning any decree or order of a court or any award when such decree or order or award purports or operates to create, declare assign, limit or extinguish, whether in future or in present, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards to or in immovable property.
  • Authorities to adopt a son that is not conferred by a will.

What is meant by valuation of property?

The valuation process evaluates the market value of the property. Demand and supply forces operating in the market, as well as other factors like type of property, quality of construction, its location, the local infrastructure available, maintenance, are all taken into consideration before the market value is decided.

 

What is Stamp Duty and who is liable to pay the Stamp Duty, the purchaser or the Developer?

Stamp Duty is a tax, similar to sales tax and income tax collected by the government, and must be paid in full and on time. A stamp duty paid instrument/document is considered a proper and legal instrument/document. The liability of paying stamp duty is that of the buyer unless there is an agreement to the contrary. Section 30, of Bombay Stamp Act, 1958 states the liability for payment of stamp duty.

 

How much is the Registration Fees on sale of immovable property?

The registration fee in case of sale of immovable property is 1% of the market value or ? 30,000, whichever is lower. There could be some additional charges for scanning of documents were the office of the Sub Registrar has been computerized.

 

How often does the state government issue a ready reckoner indicating market value of properties?

A Ready Reckoner (RR)is published on the 1st day of January every year.

 

What are the pre-requisites for a document for sale of a flat or shop or office to be registered in Maharashtra?

The following are the pre-requisites for registration of a document for sale in Maharashtra:-

  • Duly completed, stamped and signed instrument printed on single side only.
  • Receipts for payment of Stamp Duty and Registration Fees.
  • Property Register Card
  • Commencement Certificate issued by the Municipal Corporation for premises in a building under construction and Occupation
  • Certificate for a completed building.
  • Property Tax Bill in case of depreciation in market value for old buildings

 

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