Thursday, October 13, 2011

Only Clear Title holders Will Be Able To Sell,SC order on GPA to affect property sales

Supreme Court order barring sale of properties through general power of attorney (GPA) and sale agreements said the ruling could reduce black money component in deals and bring down legal disputes but it would hit liquidity in the real estate market, bringing down the number of transactions in the short term.
Lawyers and property consultants said the judgment would cause hardship to owners who bought disputefree properties on GPA and SA simply because paperwork wasn’t complete for a proper sale registration. Such owners will have problems selling these properties, said senior lawyer Kumar Amit, who works for public sector banks that fund transactions through first power of attorney.
The Supreme Court had ruled that, effective prospectively from October 11, registered sale deed will be the only valid instrument of transaction of property in the country. The verdict is likely to affect a large number of property owners. A senior lawyer who vets sale documents for a leading bank estimated that in Delhi around 70% of property sales take place through GPA and SA. In particular, apartment owners in societies which have not got a completion certificate would find themselves on a sticky wicket since these flats cannot be converted into freehold. Till now, these properties could be sold through GPA and SA. The new ruling would effectively mean such apartments cannot be sold. Experts also predicted that the verdict would generally raise the market value of freehold real estate while depressing the price of leasehold properties. Those holding properties on GPA and SA will have to get a sale deed registered if they wish to sell the property in future.


Property sales likely to slow down Flat owners in cooperative societies which don't have completion certificates and house owners in lal dora land won't be able to sell property Those who own property through general power of attorney won't be able to sell unless they convert their papers into sale deed and get them registered .

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