Registration of Power of Attorney to become compulsory

Hindu reports.

The government of Tamil Nadu has proposed amendments to the Registration Act to prevent fraudulent transactions, evasion of taxes and stamp duty , writes R.L.Narayanan

Photo: M. Srinath

Changes underway: Rules relating to registration of Power of Attorney will be changed.

Recently, the Government of Tamil Nadu has proposed that the rules relating to registration of Power of Attorney will be changed and the registration of instruments of power of attorney will be made compulsory.

Further, it is proposed that the registration of these instruments shall be made only in the office of the Registrar of Assurances concerned having jurisdiction in respect of the property dealt with under the Power of Attorney is situated. Necessary a mendments to the Registration Act, 1908, are likely to be made shortly and date of notification for implementation announced.

The immediate concern for the proposed amendment is the large-scale prevalence of a system known as “Power of Attorney Sales”.

The Supreme Court has considered this terminology and the practice covered by the term in a case pending before it.
Gained acceptance

Broadly speaking, Power of Attorney Sales is the practice of registering Sale Agreement, Power of Attorney with or without Will instead of one Sale Deed or other deed of conveyance on payment of full sale consideration.

The practice has also been to register only one of the three documents mentioned above. This practice has gained acceptance in the market and also before various authorities.

It was noticed that where restrictions such as compulsory permission from the Authority concerned and where such permission was granted on the basis of payments to be made were imposed on transfer of flats, a hybrid system with a Power of Attorney Sale was effected by the allottee / holder of the Flat to avoid the procedures and fees to be paid.

Full article here

Buyers rights in Maharashtra

ExpressIndia has some good information.


Pune * Agreement of sale should only mention the carpet area and not saleable or built-up area
* Builders have to provide one car park for tenements having carpet area of more than 80 sq m (861 sq ft) without any extra charges to the buyer
* Common terrace cannot be sold to an individual
* Terrace garden should be charged only one-third the rate fixed for the flat

These are some of the areas that lawyers and activists point out to potential buyers, saying they should be vigilant and not blindly sign on the dotted line like before. Even as property buyers in Pune are waking up to a new reality — that they may have been getting the short shrift from the builders for long.

Most builders mention only the built-up area in agreements; they make all customers cough up an extra Rs 1.5-2 lakh for stilt parking; many of them charge half the rate fixed for the flat for terrace garden and at least a few even charge 50 per cent for loft space; advance payment should be only 20 per cent of the sale price and that too has to be made only after a written agreement of sale and not on the basis of allotment letters.

“One area where the buyer is at the receiving end is the improper measurement of the flat he buys. Unlike in any other product, an apartment is one purchasable commodity where the buyer has to blindly believe what the builder says and has no recourse to validating it,” said a city realtor, not wishing to be quoted by name. This is over and above the fact that a 1,000-sq ft flat mentioned as saleable or built-up has only 700-750 sq ft as carpet area, he said.

“All these are in complete violation of the Maharashtra Ownership Flats Act 1963 (MOFA) and development control rules of the Pune Municipal Corporation,” said High Court advocate Yogesh Mehta. “Any violation is a penal offence where conviction can be imprisonment for a term extending up to one year.”

The MOFA Act 1963 also helps purchasers in cancelling an agreement if they do not get possession of the property in time. According to Section 8 of the Act, if the purchaser is not given possession as per the agreement, the purchaser can cancel the agreement and claim the money back at a nine per cent interest. “Most buyers do not know this clause and are made to wait,” Mehta said.

Promoters and Builders Association of Poona chairman Lalit Kumar Jain said all builders have to abide by the MOFA Act. “We have control on the 260 members of our association. If there is any violation we are willing to take it up. We have no control on the others,” he said.

RTI activist Vivek Velankar said most buyers are not aware of these rules and those who feel bold enough to point them out to builders are not entertained.