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All power of attorney property deals banned in Delhi; transactions since October 2011 declared void

NEW DELHI: In an order that puts thousands of property transactions in Delhi under a cloud, the revenue department has made all realty sales through transfer of general power of attorney null and void with retrospective effect from October last year.

The order, dated April 27, directs all 13 sub-registrar offices, DDA and NDMC to follow the Supreme Court’s order last October that no sale deed will be registered if it is through a GPA transfer. This means transactions carried out since October on GPA transfers will have to be registered afresh with complete documents.

On average, around 20% of registries are done through GPA transfers, a common way of selling leasehold properties and those that don’t have a clear title. In Delhi’s northwest district, for instance, of 5,300 documents registered across three sub-registrar offices in March, 1,157 were GPA transfer registries. Bankers said the proportion of GPA transfers were even higher in sales involving bank loans.

Top revenue department officials steered clear of taking responsibility for the delay in implementing the Supreme Court order. They said that as this was a Supreme Court order, it should have been implemented at the sub-registrar offices since October. They admitted, however, that registrars have only stopped registering such sale deeds after the April 27 directive from the revenue secretary and divisional commissioner Vijay Dev.

Realty watchers said the order will reduce the number of saleable properties in the capital and lead to a hike in the value of properties on freehold land.

Citing the October 11, 2011, judgment of the Supreme Court, the revenue department circular says, “It is reiterated that immovable property can be legally and lawfully transferred only by a registered deed of conveyance (sale deed)… ‘GPA sales’ of ‘SA (sale agreement)/ GPA/will transfer’ do not convey title and do not amount to transfer, nor can they be recognized as valid mode of transfer of immovable property. The court will not treat such transactions as completed…”

“To ensure that the Supreme Court order is followed, I have issued a circular informing all officials involved in registration of documents to not register any sale deeds on a GPA transfer,” Vijay Dev told TOI. He said it was required as GPA transfer transactions left no evidence of how many hands a property might have changed hands. There are also loopholes in GPA transfer cases as property papers may not be complete or a property may not have the requisite completion certificates.

In such cases, Dev said, there were greater chances of a buyer landing in litigation. The implementation of the court order would mean cleaner transactions with clear title deeds and also higher revenue to the state as each sale of the same property will have to be duly registered on payment of stamp duty, he said.

However, the retrospective order has thrown thousands of property sales after October on GPA into uncertainty. Owners who bought property on GPA because it lacked perfect documentation are now in trouble because legally the property remains in the seller’s name. Both parties will now have to initiate the process of transfer of property through clear sale deed.

Via : ET


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