Stamp Duty and Registration procedures

A Flat purchaser has to enter into an Agreement for Sale for the purchase of a flat. The said document duly stamped and registered gives the flat purchaser right title and claim to the flat purchased by him.

We have hereunder endeavored to explain and elaborate a few legal matters that are relevant to the person purchasing a flat.

Stamp duty is a pre-requisite condition, which has to be paid before taking possession of the flat. It is essential to pay the requisite stamp duty every time one purchases a new flat or even when it is transferred within the family.

Stamp Duty for Flats Present rates of stamp duty for residential premises in the city of Mumbai above Rs.5,00,000/- is Rs.7600/- plus 5%

Stamp Duty for Shops/ Galas/ Office Premises & Garage The rate of Stamp Duty for Shops/Galas/Office Premises and Garage even if used for car parking is 5% in Mumbai. If the authorities are demanding more stamp duty then a representation should be made to the authorities emphasizing the below mentioned points (as may be applicable). The duty has to be paid on Sq. Meter's built up area and not on super built up area. There are reductions in the market value if the size of the shop is big The area is lacking in infrastructural facilities.

Procedure for Stamp Duty When the Flat-Purchaser is desirous of entering into an Agreement, he/she has been given the stamp duty amount which is calculated as per the Agreement Value or Market Value whichever is higher. Once the stamp duty amount has been given to the Flat-Purchasers they have been told to get the Pay-Order. The pay-order is given for franking of the agreement and later on the said agreement is duly filled and signed by the respective parties.

This Act lays down different categories of documents for which registration is compulsory. The documents relating to the following transactions of immovable properties are required to be compulsorily registered:

Under Section 2(6) of the Registration Act, 1908 the term "immovable property" includes: "land, buildings, hereditary allowances, rights to ways, lights, ferries, fisheries or any other benefit to arise out of land, and things attached to the earth, or permanently fastened to any thing which is attached to the earth, but not standing timber, growing crops nor grass."

• Instruments of gift of immovable property.
• Lease of immovable property from year to year or for any term exceeding one year or reserving a yearly rent.
• Instruments which create or extinguish any right or title to or in an immovable property of a value of more than one hundred rupees.

Place for Presenting document for registration Section 28 of the Registration Act, 1908 states that all documents of which registration is compulsory if it relates to an immovable property should normally be presented for registration in the office of the Sub-Registrar within whose sub-district the whole or some portion of the property to which the document relates is situated.

Registration Procedure At the time of lodging a document for registration of any instrument, the original document which should be printed on one side only along with two photocopies of the original have to be submitted to the Registering Officer. The copies are to be photocopied only on one side of the pape The registration procedure also requires the presence of two witnesses and the payment of the appropriate registration fees.

On Completion of Procedure A receipt bearing a distinct serial number is issued. The following requirements for completing the registration are usually stated on the receipt: 1. Market Value of the property; 2. Urban Land Ceiling declarations of the transferor/s and the transferee/s. Fees for registration of a document The State Government has been empowered to fix the fees for registration of the document.

Registration Fee The registration fee at present fixed for registering documents relating to property transactions are approximately 1% of the market value or agreement value whichever is higher subject to Maximum of Rs.30,000/- [from 1-4-2003]. The registration fee for the following immovable property transactions is leviable on the market value of property on which stamp duty is charged: Conveyance Exchange Gift Partition Transfer of Lease by way of Assignment Sale Power of Attorney given for consideration Authorization to the attorney to sell the property.

Person's Entitled To present the document to the Registering Officer for Registration Section 32 of the Registration Act, 1908 deals with the provisions relating to the presenting of documents for registration by a person. Subject to certain exceptions, every document, which is to be registered under the provisions of the Act, should be presented at the proper registration office by: 1. The concerned person himself/herself, or 2. The representative or the agent of such a person duly authorized by a power of attorney duly authenticated in a manner as is stated in Section 33 of the Registration Act, 1908. Registration of a document compulsory under the provisions of The Maharashtra Ownership Flat Act, 1963 Registration is necessary under the provisions of this Act. Section 4 (1) of THE MAHARASHTRA OWNERSHIP FLATS (Regulation of the promotion of construction, sale, management and transfer) ACT, 1963, it is laid down that, the agreement in respect of flats to be sold by the owner/ promoter/developer to the flat purchaser requires compulsorily to be registered under The Registration Act. . Necessity of registering a document if a person agrees to transfer his right, title or interest in a premises purchased from an owner / promoter / developer to another person before the society is formed It is advisable to get an agreement registered in these circumstances. Necessity of Registration of an agreement to transfer a flat after the registration of a co-operative society the purchasers of various premises become members and shareholders of such a society, and as such the members are thereby governed under the provisions of The Maharashtra Co operative SocietiesAct,1960.

Consequences of Non-Registration of a document According to Section 49(c) of the Act, if a document, of which registration is compulsory under Section 17 of Registration Act, has not been registered, it cannot be produced as evidence in a court of law.

Time Time permitted for registration of a document Under Section 23 of the Act, subject to certain exceptions, any document other than a will has to be presented for registration within four months from the date of its execution.

Expiry of the prescribed time If a document is not presented for registration within the prescribed time period of four months, and if in such a case the delay in presentation of the document does not exceed a subsequent period of four months, then the parties to the agreement can apply to the Registrar, who may direct that on payment of a fine not exceeding ten times the proper registration fees, such a document should be admitted for registration. Delay in Registration - provision for additional four months The practice followed in such an event is that the parties to the document execute a Deed of Confirmation confirming that the main deed is valid and binding upon them. By way of such a deed the transferor/s also confirm/s that he/they hold/s no right, title and interest in the property and the same is being transferred to the transferee/s. A copy of the main deed is annexed to this Deed of Confirmation. This is the only manner in which the lapse in registration can be rectified.

Deed of Cancellation, of a duly executed and registered document by mutual consent may arise in some circumstances. In that event, the Deed of Cancellation will also have to be registered. At the same time no document can be cancelled unless all the parties to it have mutually agreed to the cancellation.

Deed of Rectification, if the main document/agreement is registered, then in that event it is always necessary to register the Deed of Rectification too. Blanks, erasures or alterations in a document. They are permissible as per Section 20(1) of the Act, but the persons executing the document should attest with their signatures or initials such blanks, erasures or alterations. As per Section 20(2), while registering such a document, it is the duty of the Registering Officer to make a note of any such blank, erasure or alteration in the register.

The Registering officer has to endorse the following particulars, namely:
1. The signature and admission of every person admitting the execution of the document in person or by his representative, assign or agent;
2. The signature and admission of every person examined in reference to such a document;
3. Any payment of money or delivery of goods made in the presence of the Registering Officer in reference to the execution of the document and any admission or receipt of consideration made in his presence in reference to such execution.

After completion of all formalities related to registration, such original documents are returned by post or by hand delivery only after the proper procedure for the preservation of the original document has been completed by the Registration Authorities.

Section 85 of the Registration Act, 1908 states that all documents (other than Wills) remaining unclaimed in any registration office for a period exceeding two years may be destroyed.

A document relating to an immovable property can be executed out of India and later it can be presented for registration in India . As per Section 26 of The Registration Act, 1908 if a document purporting to have been executed by all or any of the parties out of India is presented for registration within the prescribed time, the Registering Officer may, on payment of proper registration fee, accept such document for registration if he is satisfied that:
1. The instrument was executed out of India.
2. The instrument has been presented for registration within four months after its arrival in India .

A Power of Attorney is a document which empowers a specific person to act on behalf of the person who is executing the same. It also includes any document by which a person is authorized to appear and act on behalf of a person who is executing the power of attorney. A power of attorney may also be given by a person to another to appear before any Court, Tribunal or Authority or before a Co-operative Society or any Body or Association. Types of Power of Attorney There are two types of Power of Attorney, namely:

General Power of Attorney This type of a Power of Attorney gives general powers to the person in whose favor the document is executed. The person who is given the powers is called a "Constituted Attorney" and he is authorized to perform all kinds of acts and to execute any document on behalf of the person who has so executed that document.

Special Power of Attorney Such a Power of Attorney gives the person, power/s only for specified act/s or transactions. In this case the power has to be strictly adhered to and the Constituted Attorney cannot do anything for which he is not duly empowered by the Power of Attorney.

It is generally executed when a person wants to authorize someone to carry out any activity pertaining to his property, which he would have undertaken if he would be personally capable of doing the same. It is an authorization, which confers powers akin to that of the Principal on the person for a temporary period of time. If a person wants to present a document for registration at the proper registration office and if, for some reason he cannot be present, he may do so through his representative who is duly authorized by a Power of Attorney, which is executed and authenticated in the prescribed manner.

If the principal at the time of its execution does not reside in India As per Section 33(c) of the Registration Act, 1908, if the principal, at the time of executing the Power of Attorney does not reside in India, then the Power of Attorney has to be executed before and authenticated by a Notary Public, or any Court, Judge, Magistrate, Indian Consul or Vice-Consul, or a representative of the Central Government in the country where the principal resides.

The Registrar or the Sub-Registrar or the Magistrate, must first satisfy himself that the Principal has voluntarily executed the Power of Attorney. Only after he is satisfied as regards the same, can he attest a Power of Attorney. If he is not satisfied as to the genuineness of the Power of Attorney, then he has the authority to get evidence as to the voluntary nature of the execution.

As per Section 38 of the Registration Act, 1908, the following persons are exempted from attending the office of the Registrar for admitting any document:
1. Persons, who are physically incapacitated due to some infirmity and who will have to take too much of a risk or serious inconvenience in order to be present.
2. Persons who are in jail under civil or criminal process.
3. Persons who are exempt by law from making personal appearance in Court

• Eligibility
• Loan Amount
• Sanctioning
• Disbursement
• Repayment of Loan
• Application Process
• FAQs

Home Loan You must be at least 21 years of age when the loan is sanctioned. The loan must terminate before or when you turn 65 years of age or before retirement, whichever is earlier. You must be employed or self-employed with a regular source of income

Office premise loan You must be at least 21 years of age when the loan is sanctioned. The loan must terminate before or when you turn 65 years of age. You must be self-employed with a regular source of income. The loan can be for the purchase / construction / extension of a non-residential property. A loan for renovation or improvement will be given only at the time of acquisition of property. Professionally qualified and self-employed individuals can apply. A minimum of 3 year's work experience is a must.

A number of factors are taken into account when assessing your repayment capacity. Your incomes, age, number of dependants, qualifications, assets and liabilities, stability/ continuity of your employment / business are some of them. However, there are ways by which you can enhance your eligibility.

1. If your spouse is earning, put him/her as a co-applicant. The additional income shall be included to enhance your loan amount. Incidentally, if there are any co-owners they must necessarily be co-applicants.
2. Did you know that your fiancée's income can also be considered for sanctioning the loan on your combined income? The disbursement of the loan, however, will be done only after you submit proof of your marriage.
3. Providing additional security like bonds, fixed deposits and LIC policies may also help to enhance eligibility.

While there is no need for a guarantor, it could be that having one might enhance your credibility with us. If so, our loan officer would provide you with the necessary details.
The final amount to be sanctioned will depend on your repayment capacity. However, what you ultimately are entitled to will have to conform within the limits fixed for each loan.
Also, when the company looks at the total cost, registration charges, transfer charges and stamp duty costs are included.

Document

• Passport size photograph.
• Age verification: PAN card, Voters ID, Passport, License.
• Bank statement for the last six months.
• Income Documents e.g. Latest Form 16, Certified IT returns for latest 3 years.
• Admin Fee cheque.
• Loan Enclosure letter.

These are the documents required for sanctioning a loan. You may be asked to submit further legal documents if required by the Bank or its approved lawyers.

Do retain photocopies of all documents being submitted by you.

Your loan will be disbursed after you identify and select the property or home that you are purchasing and on your submission of the requisite legal documents. While you may be under the impression that the list of documents asked for is rather extensive, please note that it is for your own good. Each and every single document asked for will be verified and checked to ensure your safety. This may take some time but we want to ensure a clear title and will complete all the legal and technical verifications to ensure that you have full rights to your home.

On satisfactory completion of the above, on registration of the conveyance deed and on the investment of your own contribution, the loan amount (as warranted by the stage of construction) will be disbursed by Bank. The disbursement will be in favour of the builder/seller.
List of documents for disbursement
Standard documents:

• Loan Agreements
• Disbursement Requests
• Post-dated cheques
• Personal guarantor's documents, as the case may be

Some documents are specific to each case.

What is the repayment tenure ? Home Equity Loans - Maximum loan tenure of 15 years. Office premise loan - Maximum loan tenure of 15 years. Home loan - Maximum loan tenure of 25 years.

How is the loan repaid ? All loan repayments are done via equated monthly instalments (EMI).

What is an EMI ? An EMI refers to as equated monthly instalment. It is a fixed amount which you pay every month towards your loan. It comprises of both, principal repayment and interest payment. EMI’s are calculated using following formula.   Loan Amount x r x (1 + r ) n EMI = ----------------------------   { ( 1 + r) n} – 1 Where r = interest rate at which you have taken the loan n = tenor of loan

When does the repayment start ? EMI payments start from the month following the month in which the full disbursement has been made.

How is the EMI paid ? The EMI is to be paid every month through post-dated cheques (PDCs) or direct deductions from your salary. If you are opting for PDCs, then you will have to provide 36 upfront. The PDCs are to be dated on the 1st of every month. However, if you receive your salary a few days later, no problem. There are some flexibilities of dating the cheques, which depends on that financial institution's rules & regulations.

What if a PDC bounces ? In the case of a bounced cheque or delayed payment, charges and outstanding dues will be charged as per the prevailing company policy. You can replace old PDCs with new ones within 5 - 7 working days.

What is pre-EMI interest ? In the case of part disbursement of the loan, monthly interest is payable only on the disbursed amount. This interest is called pre-EMI interest (PEMI) and is payable monthly till the final disbursement is made, after which the EMIs would commence.

When do I pay PEMIs ? The first PEMI is payable by cheque by the end of the month in which the disbursement is made and each subsequent PEMI at the end of every month till the commencement of EMI.

When does the repayment start ? EMI payments start from the month following the month in which the full disbursement has been made.

The moment you decide to buy a home, you can put in your application. Yes, you can apply for a loan even before you have selected the property.

The property need not even be in the same city where you are residing.

Should there be a change in your financial status or plans, you can withdraw your sanction within 6 months of approval

What is the minimum loan amount ? You can get a home loan starting from Rs. 2 lakh ( Delhi , Mumbai & Bangalore Rs. 3 Lakhs). The loan amount depends on your repayment capability and is restricted to a maximum of 85-90% of the cost of the property or the cost of construction as applicable. Repayment capacity takes into consideration factors such as income, age, qualifications, number of dependants, spouse's income, assets, liabilities, stability, continuity of occupation and savings history.

What are the loan tenure options ? You have the option of selecting a term you are comfortable with, ranging upto 20 years, provided the term does not extend beyond your reaching 65 years of age or retirement age, whichever is earlier.

How is the interest charged/calculated ? There are two schemes, Fixed Rate Home Loans Adjustable/Floating Rate Home Loans. If you opt for an Adjustable Rate Home Loan, the interest rate would vary with the Bank Home Floating Reference Rate. Under the Fixed Rate Home Loans the rate applicable on the date of disbursement remains fixed during the entire duration of the loan.

How much time will it take for my loan to be approved ? It takes a week for your loan to be sanctioned after you have submitted all the documents.

Who can be the co-applicants for the loan ? You could include your spouse as a co-applicant for the loan and we shall include his/her income to enhance your loan amount. Further, in case there are any other co-owners they also need to be co-applicants.

Is a personal guarantor a must ? No, there is no personal guarantor required in most cases.

What security/collateral do I have to provide ? Typically the security for the loan is a first mortgage of the property to be financed, by way of deposit of title deeds and/or such other collateral security as may be necessary. The title to the property should be clear, marketable and free from any encumbrances.

What are the stages involved in taking a loan ? There are two main stages: Sanction of the loan, whereby you get an approval for a specific loan amount based on the value of your property and repayment capabilities. Disbursement of the loan amount.

What are the various types of loans available ? Home Loans Land Loans Home Equity Loans Office Premises Loans All of these are available on an adjustable rate or a fixed rate.

What is a Monthly Reducing balance ? An Equated Monthly Installment (EMI) has 2 components, interest and principal. When the interest is calculated on monthly rests, the principal on which the interest is charged goes down every month. This results in a significant saving for the customer over the tenure of the loan.

What is an Annual Reducing balance ? An Equated Monthly Installment (EMI) has 2 components, interest and principal. When the interest is calculated on annual rests, the principal reduces only at the end of the year. Therefore, you continue to pay interest on a portion of the principal that you have already actually paid back to the lending company.

When can I apply for a loan ? You can apply for a home loan even before you have selected your property. The loan amount would be sanctioned or approved for you, based on your repayment capability.

When will the loan be disbursed ? Your loan will be disbursed on: Your identification and selection of the property. Submission of the legal documents. Legal and technical clearance of the property Investment of your contribution towards the property

What is an amortization schedule ? An amortization schedule is a table giving the reduction of your loan amount by monthly installments. The amortization schedule gives the breakup of every EMI towards repayment interest and outstanding principal of your loan.

What are the tax benefits of taking a home loan ? The tax benefits on a home loan, under the Income Tax Act, are two-fold: 1. Principal repaid : Rebate under section 80 (C) of the Income tax Act is available to individuals on repayment of the principal portion up to the maximum limit of Rs. 1,00,000/- per annum. 2. Interest repaid: Under section 24 of the Income Tax Act , in case of self-occupied property, deduction is allowed up to Rs.1,50,000 per annum for houses acquired or constructed with capital borrowed after March 31, 1999 .

Can I get IT certificates in the name of both the Applicant and co-Applicant separately ? As per the IT rules only one certificate can be issued for a home loan and hence one certificate will be issued in the name of both applicant and co applicant.

When is the IT certificate issued ? The IT certificate will be issued at the end of a financial year. You can expect to receive your copy of the IT certificate in the month of April or May.

How can I get the tax benefit during the year ? You can request for a provisional IT certificate that can be issued any time during the course of the year. General details of Home Loans, may vary case to case

There are basically four types of Co-operative Societies connected with the housing:

Open Plot Societies In Open Plot Societies, members purchase or take on lease a plot of land and themselves construct the building.

Flat Owners Societies when a builder constructs flats and sells them to flat owners , the society then formed is called Flat Owners' Society.

Tenant Societies When Landlord forms a Society of tenants, it is called Tenants Society.

Housing Board Societies When a Society is formed by Allottees of flats and building is constructed by the Housing Board Authorities, i.e. Mumbai Housing and Development Board, then the Society so formed is of the type of Housing Board Society.

The procedure for Registration of a society begins with electing a Chief Promoter in a meeting of the Promoters. The builder under the Flat Owners type of co-operative society has the first right to act as the chief promoter. The developer / flat purchasers should call for a meeting of the Promoters by issuing the notice under Agenda of the meeting giving at least 14 days notice to the Promoters.

In this meeting, a Chief Promoter is elected who can exercise such powers and carry out such functions as are mentioned in the minutes of the Promoters of the proposed Co-operative Society. After electing the Chief Promoter, the proposed name of the society has to he decided by the Promoters. It is a common belief that the Society should consist of at least 10 members. If the number is less than 10 then special permission from Government has to be taken. In such cases, the garages / car parking may be allotted to other relatives of the promoter to reach number of 10.

On allotment of name and permission to open a bank account by the Registrar, the Chief Promoter has to collect Share Capital, Entrance Fees from promoters and deposit the same in the branch of the bank permitted by the Registrar. It should be noted that the amount cannot be withdrawn from the Bank till the Society is Registered or its Registration is refused, except with prior written permission of the Registrar. The Chief Promoter should submit Registration Proposal to the Registering Authority within a period of 3 months from the date of issue of Letter of Reservation in the name of the proposed Society. The documents that are normally to be submitted to the Registering as under :-

• Application for registration of Society in Form A along with Statement A. Enclosure to application for Registration as per Rule 4(1) of Maharashtra Co-operative Societies Rules, 1961.
• Information about proposed society in Statement 'B' (vide Govt. Circular dated 2-5-1980 )
• Information about promoter members of the proposed society in Statement 'C' (vide Govt. Circular dated. 2-5-1980 )
• A Statement of Accounts as per Form D.
• Model Bye-laws.
• Bank Balance Certificate
• R.B.I. / Treasury Challan for payment of Registration Fee of Rs. 2500/-
• Title Clearance Certificate from an Advocate.
• A true copy of the approved Building Plan.
• Letter of Authority granting permission to commence construction work/Completion Certificate (if applicable)
• Affidavit on Rs.20/- Stamp Paper from at least 10 promoter members to the effect that they are residing in the area of operation of the Society (Proposed), made before a Competent Authority.
• Affidavit from the Chief Promoter on Stamp Paper of Rs.20/- executed before the Competent Authority in form 'Y'.
• Certified True Copy of agreement made on Stamp Paper and Registered between the builder, promoter and purchasers of flat.