5 Real Estate Rules All Homebuyers Should Know About

Property purchase involves understanding a complex set of laws, a task which a common homebuyer would find cumbersome. This is why it is ideal to seek assistance of a legal expert in carrying out the purchase. However, it would certainly not be enough if you did not do some leg work yourself, and made yourself aware of some basic rules. In this article, we talk of some such rules, everyone even remotely interested in India’s real estate must know about.

Also Read: Your Step-By-Step Guide To Buying A Home

Purchase: If you are buying an under-construction property, rules laid under the Real Estate (Regulation & Development) Act, 2016, come into play. The same is not true if you are buying a ready-to-move-in property. In case of a dispute with the developer, the buyer has to approach the state Real Estate Regulatory Authority (RERA) if the property is under-construction. In case it is a ready-to-move-in flat, they have the option to approach the district-level consumer dispute redressal tribunals. As a buyer you have certain duties, too, which you have to diligently follow, failing which you may have to pay a penalty, depending on the nature of offence.  According to the Act, a homebuyer, who fails to comply with the orders of the RERA, will have to pay a penalty for each day of the period of non-compliance. The penalty may “extend up to five per cent of the property cost”.

Registration: Till the property is not registered following the due procedure, the buyer does not become the legal owner of the property. Rules related to property registration are laid in the Indian Stamps Act, 1899. Apart from paying one per cent of the property value as registration charge, the buyer has to pay stamp duty ranging from 4-10 per cent in India. Do note here that stamp duty evasion may invite a penalty leading to 10 times of the stamp duty amount. While it rarely happens, some type of offences may also land you in jail for six months.

Renting: While archaic laws are still in practice, the Draft Model Tenancy Act was launched in 2019 to change the way things function in this housing segment. While the asset remains his, a landlord cannot enter the premises, says the Act, without giving the tenant a written notice 24 hours. Landlords have to follow the same process if they want to carry out any renovation work.

Transfer: In matters of transfer, provisions of the Transfer of Property Act, 1882, apply. According to the Act, “property of any kind may be transferred” by a person “competent to contract and entitled to transferable property, or authorised to dispose of transferable property not his own”. This could be done via sale, gift and relinquishment. However, the law states that you can never make a contract to gift a property which you are hoping to own in future.

Also read: Can You Transfer All Your Property?

Sale: Income tax laws apply when you earn a property on sale of your property. Consequently, you will have to pay short term or long-term capital gains tax on the profit. To save on taxes, the sale proceeds must be invested in another immovable property or some government-formulated schemes.  

DIY Eco-friendly Measures For Homes

The 21st century has us all worried about various environmental issues like climate change and the fear of the melting ice caps. In such a time of mass disarray, we are ready to take drastic measures to ensure that the later generations aren’t born into an Earth as portrayed by most dystopian-era movies or novels. One of these methods is to make the homes eco-friendly. Contrary to popular opinion, making your homes eco-friendly isn’t challenging as there are a plethora of home-made methods to reduce wastage. The government has also come up with various schemes and incentive programs to encourage people to shift tracks and adapt a more eco-friendly way of life. Following are some of the effective ways to make your house more eco-friendly and less hostile to the planet.

 

Rainwater harvesting

Considered to be one of the most effective methods, rainwater harvesting doesn’t require much preparation and yet help when facing an acute water shortage. With serious water shortage problems envisaged, simple hacks like a rainwater harvesting tank in your home will help a lot.

 

Avoid felling of trees

What will you do if there is a fully grown tree in the middle of your property? Do you mow it down to make way for your home? Avoid that. There are various options that don’t involve that inhuman action, like accommodating the branches or other parts of the tree as an integral part of the home decor, or even transplanting the tree. This way, you have the beauty of your home intact and you’ve actively avoided the ruination of the environment.

 

Better quality wiring and appliances

Buying good quality materials for your electrical appliances help reduce wastage and emissions. Worn-out wirings and imperfect insulation increases the chances of fire hazards. Moreover, modern electronics and wires adhere to the environmental norms and thereby, work towards minimising wastage, while improving efficiency and quality provided to the consumer.

 

Installation of solar panels

Although a fairly expensive remedy to the environmental problems, it’s considered to make a big change. Solar panels convert solar energy to electricity. The panels are installed in an open area with direct sunlight, which they absorb all day, charging the cells which re-route the converted electricity to the entire house. In a bid to encourage people to use this method, the government provides a considerable amount of financial support to home-owners.

 

Things To Check Before You Sign A Rent Agreement

Nitin Sharma, 30, took up a house in Pune on a monthly of Rs 20,000 and gave Rs 60,000 as the deposit money. Six months later, his landlord wanted to increase the rent by Rs 2,000 as rentals had gone up in the area. “The landlord told me that the periodic increase was a norm keeping in view the rental market dynamics. Since nothing was mentioned in the rent agreement, I had to comply,” he says.

Sharma could have avoided this situation had he examined the rent agreement carefully. A majority of tenants are not even aware what should be included in the rent agreement.

Here are the questions you should ask yourself before you sign on the rent agreement:

Is the landlord the owner?

Before you sign on the dotted line, ensure that the person you are dealing with is the actual owner of the property. Many a time, NRIs (non-resident Indians) and investors hand over their properties to caretakers, who lease it to a third party without the knowledge of the owner. This is why you should verify the title documents, such as sale deed, besides obtaining an NOC from the housing society where you plan to lease the property. In case, the property is mortgaged, the original sale deed would be in the custody of the bank. In that scenario, you should take an NOC from the bank, too. 

What does the rent agreement contain?

Apart from the terms and conditions under which the property is given on rent, a rent agreement specifies the rent value and the tenure for which the agreement is made, along with the security amount that needs to be deposited with the landlord. The agreement should also mention the day by which the rent is expected to be paid. If the tenant fails to pay the rent before the predetermined period, the fine should also be defined. Additional monthly charges, which includes the society maintenance charges and club fees, should be clearly spelt out and who has to bear its cost has to be specified. The agreement should also specify the notice period and the penalty for cancelling the agreement without completing the specified period.

The tenure of a rent agreement is usually 11 months, unless otherwise specified in the contract. If it’s for more than a year, it’s mandatory for the owner to get the document registered.

 

Housing.com has launched a fully digital and contactless service, to create rental agreements. If you would like to complete the formalities in a quick and hassle-free manner, all you need to do, is fill out the details, create the Rent Agreement Online, sign the agreement digitally and get it e-stamped in seconds.

 

What should you look out for?

It’s important for the tenant to verify whether the owner has included a rent escalation clause in the lease agreement or not. As it is the best tool employed by the landlord to randomly increase the rent, the best way is to ensure that the agreement specifies the dates on which the rent escalation will be applicable and the percentage of increase.

What about the future sale?

Make sure that the agreement has a clause on the sale of the house. Even if your landlord has no plans to sell his house, you should press upon him to add the clause stating how many months you will get to search for another accommodation in case he plans to sell the property.

Is everything functioning properly?

See that the appliances and connections are in working order. Any minor repair work is the headache of the tenant. However, if the property is damaged because of negligence on your part, the landlord can rightfully use the security money deposited with him for carrying out the necessary renovation. See the documents that prove all previous power, water and gas bills have been cleared.

Also read

8 Essentials In A Good Rent Agreement

Giving Your Property On Rent? This Checklist Would Come Handy

6 Things You Must Do Before Renting Your Property

11 Things To Keep In Mind If You Are Going To Transfer Sale Proceeds Of One Property Into Another

Are you planning to sell your property? Well, the profit you earn through the transaction is taxable. Under Indian tax laws, gains arising out of the transfer of a capital asset, which among other things includes property, are taxable under the head “capital gains”. Depending on the period for which the asset is held, the gains could either be taxed under the short-term capital gains (STCG) head or the long-term capital gains (LTCG) head.

Do note here that under the current norms, long-term capital gains are taxed at 20 per cent, plus surcharge and education cess, and short-term gains are taxed at 15 per cent, plus surcharge and education cess.

However, if you plan to use the proceeds of the sale of your old residential property in acquiring another residential property, Section 54 of the Income Tax (I-T) Act saves you from paying the capital gains tax. Also, under Section 54F of the Act, a seller can be exempted from paying LTCG tax even if the saleable property is non-residential, and the profit gained so is being used to buy a residential property.

Also Read: How to claim deductions on capital gains invested in real estate

Now, let us look at what are the terms and conditions to avail of the benefits under Section 54:

The eligibility

To avail of the benefit under this Section, the seller has to be an individual or HUF (Hindu Undivided Family). An HUF includes all members of a family, including the extended family members. Apart from Hindus, HUF laws also cover Jains, Sikhs and Buddhists.

The holding period

The property you sold should be a residential asset and should have been held by you for a long term. In case if you hold the property only for a short-term, you will not be eligible to avail of the benefits. From the assessment year 2018-19, the period of holding, in case of immovable property is reduced from 36 months (three years) to 24 months (two years), to qualify as a long-term capital asset.

The Mumbai Bench of the Income Tax Appellate Tribunal has also ruled that the date of the allotment would be considered to calculate LTCG, and not the date of property registration. Typically, possession if offered before property registration if one is buying it from a real estate developer. 

Also read: Can Property Be Transferred To An Unborn Child?

Purchase of the new asset

Another condition that you have to fulfill to avail of the benefits under this Section is to buy the new property one year before the sale of the old one or within two years the sale of the old property. In case you are planning to construct a house on your own, the undertaking must be carried out within three years from the date of transfer of your old property.

Compulsory acquisition

In case of compulsory acquisition, the period of acquisition or construction will be determined from the date of receipt of compensation (whether original or additional).

Also read: Listing 8 Real Estate-Related Transaction That Are Tax Free

The number cap

Effective from assessment year 2015-16, exemption under Section 56 can be claimed only in respect of one residential house property purchased/constructed in India. If more than one house is purchased or constructed, exemption under Section 54 will be available for one property only.

Those selling multiple properties to buy one single residential unit are eligible to get tax benefits, if the transaction is carried out within the stipulated timeframe. 

Within boundaries

What if you bought a property outside India using the sale proceeds of a property that you held in India? No exemption can be claimed for the house purchased outside India.

The amount

Now, what is the amount of exemption provided under the Section? The lower of following amounts will be exempted:

  • The amount of capital gains arising on transfer of residential house; or
  • The amount invested in purchase/construction of new residential house property.

Suppose you sold your old property for Rs 10 lakh, earning capital gains of Rs 1 lakh. Now, if you invest Rs 80,000 of this amount in the purchase of a new property, the exemption under Section 54 will be Rs 80,000 while the remaining Rs 20,000 of the gains would be taxable.

Holding again

What if you are unhappy with the new property and want to sell it soon enough? In such a scenario, you will have to let go of the exemption you claimed. According to the law, the benefit granted under Section 54 will be withdrawn if you transfer the new house within a period of three years from the date of acquisition.

The scheme

The Act further says that if the capital gains arising on transfer of the house are not utilised, in whole or in part to purchase another house till the date of filing the income tax returns, the benefit of exemption can be availed of by depositing the unutilised amount in Capital Gains Deposit Account Scheme. This provision has come into force with the enactment of the Gains Deposit Accounts Scheme, 1988. You can approach any branch of a public sector bank to deposit this amount. The new house can be purchased or constructed by withdrawing the amount from the account within the specified time-limit of two or three, as the case may be.

The unused amount

In case the amount lying in Capital Gains Account Scheme account is not utilised within a specified period, the unutilised amount, for which exemption is claimed, will be taxed as income by way of long-term capital gains of the year in which the specified period ends.

The very same money

It is not mandatory for the taxpayer to use the capital gains amount lying in his account to make the new house purchase. He could use money from other sources to do that and can still claim the tax exemption, several Benches of the Income Tax Appellate Tribunal have ruled. 

Also read: Taxpayer Eligible For Capital Gains Deduction Even If Home Loan Is Availed

How To Choose The Right Architect

If you are going to invest a fortune in building a project, you would want an expert or architect to handhold you. However, there may be a long queue when you start searching for an expert in the market and finding the one who would be the best for you may not be easy.

PropGuide lists certain parameters based on which you should find an architect for your project.

What do you want?

Before handing over the responsibility of your project, you must be clear on what exactly you want from your architect. Any communication here may cause you much heartburn in future. On the other hands, popular architects may come with a huge price tag. Keep in mind your budget requirements and stick to it.

Check with thy neighbour

The best way to look for an architect is via referrals. Connect with your friends, relatives, colleagues or neighbours who have recently done some construction. These people have a first-hand experience with the architect which may save you a lot of research work.

Check the bio

Go through architect profiles and websites and check their previous work record. This will give you an insight about their designing techniques and domain knowledge.   

Do the research

If everything else fails, a good research will help you find a suitable architect. Refer to the Council of Architecture, the Indian Institute of Architects (IIA) or similar statutory bodies to find one. Connect with architects who are member of these organisations and go ahead.

Interview them

Once you have shortlisted some architects, personally meet them and discuss the work that they have to undertake. Ask as many questions as you can. Try to figure out if their style and techniques suits your requirement. A detailed discussion is always important before you finalise an architect.

Inspect previous work

Inspecting an architect’s previous work would give you a peep into their work technique. The designs, the techniques, the know-how used in his previous works would give you a picture of how suitable he could be for you.

Compare price and designs

Meet more than one architect and compare their works. Before finalising an architect, consider your overall budget and the fee he is charging.

Take the final call

Make the final choice only when you are satisfied on all aspects. Do not forget an architect offers you professional service and not a product. A perfect architect will be the one who satisfies you with his talent, technical expertise and communication skills.

9 Must-Have Accessories To Beautify Your Home

Every home tells a story of its own by the way it is designed and decorated. The accessories used for this purpose not only enhance the beauty of your residence but are also a reflection of your own style sensibilities. 

While the list of accessories that can help you define your home is a long one, MakaanIQ lists nine home accessories you must invest in:

Couch

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Adorning your living room, a couch could make or break the complete look of the area. Depending on the size of your living room, opt for a sofa that could be a four, five or seven seater. If you still have space, and if you host a lot of guests from time to time, add some ottomans as well as a statement-piece chair which could act as a decorative when not in use.

Art decorative

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An art piece can add to the beauty of walls, side tables and even the otherwise dead corners of your home. You can place them in your living room, bedroom, foyer area or even your study. However, look out for what kind of art piece works for each of these rooms. Also, keep a tab on the colour of the wall where you hang a painting or place a sculpture. Let the two contrast each other and not merge. Prefer to colour the wall where you would want to hang an art piece or place a sculpture in pastel shades. Also, pick a contemporary design if you are opting for a minimal look for your home, and a classic if you are going all luxurious.

Lighting

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Apart from solving its primary purpose, lighting can be decorative as well. Install a mix of utility lighting, task lighting and decorative lighting to make your house shine better. Also, for an environment-friendly home, opt for LED lighting as these conserve energy and have a longer shelf life. For your foyer and living room, you could opt for big chandeliers, depending on the size of the apartment; for bedrooms, opt for soft lighting; a bright light for study and kitchen is recommended. 

For more on lighting, click here.

Rugs

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Rugs accentuate the look of your room, adding to the glamour quotient. The market has a large variety of rugs available in different fabrics, sizes and shapes. So, you could opt for a Kashmiri rug if your decor is classic, buy something in fur if you are going luxurious and some abstract rugs if the look you are going in for is contemporary. See what fits and merges with your decor. Or if you find a rug whose beauty you don’t wish to hide underneath that couch of yours, go ahead and hang it on your wall; it could act as a piece of art.

For more on rugs, click here.

Houseplants

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Houseplants are both a utility and could be used for decorative purposes. While these clean up the air of your home, keeping it fresh, they also add colour to your home. While the small plants can adorn your window sills, the big ones can fill in that dead corner of your room. Also, these are a beauty when placed in the balcony or porch.

For more on houseplants as decorative, click here.

Crockery

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There is nothing that china crockery cannot add beauty to. Place them neatly on your dining table, adorn them in your crockery cabinet or just use them as a piece of decorative on a side table, chinaware is going to give a luxurious touch to your decor. Keep them in your balcony while you enjoy your evening tea and suddenly the whole set-up will make you feel like a king or queen. But chinaware can be heavy on pocket; an affordable alternative is ceramic crockery that has a similar shine and is available in various colours, shapes and sizes. It could fit well if you are giving your home an earthen look.

For more on ceramic crockery, click here.

Vases

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Tall, small or wide, vases are considered the safest piece of decoration at a home. You can never go wrong with a vase. You can pick them in different colours, opaque or transparent, and fill them with natural or artificial flowers. Vases are an interesting way of filling up an otherwise empty space in your room.

Candles

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To make your home smell good at all times, light some candles across rooms. Available in different designs and fragrances, candles also add beauty to your room from their design, as well as the light they emit. But be careful that you place these candles in a safe area, not near any fabric or other flammable products.

For more on how to use candles at home, click here.

Mirrors

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Not only do they reflect your beauty, but are also a source of adding beauty to your room. Placing mirrors at the most unusual spots can accentuate the look of your room, reflect the light, and make the room look brighter and more spacious. Mirrors are available in different frames like wooden, metallic or carved wall art.

For ways to deck up your home with mirrors, click here.

Can You Sell Your Share Of An Inherited Property?

Can one heir sell the property? Can you evict someone if he/she is living on in your property making you unable to sell your share of the property? In India, given the multitude of property-related problems, such cases are common. Here are two such cases that help you know your legal rights.

When a relative refuses to move out of the property

Abdul Malik says that his father’s property in Hyderabad was let out to his uncle (father’s brother) because the latter could not afford a rented accommodation. He has been living in the house for over 10 years while Malik and his family have been living in Mumbai. Malik wishes to sell this property in Hyderabad but his uncle is unwilling to move out. The property papers are however in the name of Malik’s father and he is seeking advice on what he must to do to get the property back.

Mumbai-based advocate Ajay Sethi also says that the ideal way to proceed would be to have Malik’s father issue a legal notice to his brother to vacate the house because they are just ‘gratuitous licensee’ licensed to live in the premises without paying any rent or consideration. If they do not vacate, Malik’s father should file a suit for eviction against his brother.

Rajgopalan Sripathi, a Hyderabad-based advocate says, “Since there is no rent agreement, it is actually beneficial to you because you can always file a criminal case against your uncle in case you want to.”

Ashish Davessar, advocate in Jaipur says, “You can file a criminal complaint for house trespass against him which will result in his prosecution in the criminal court. However, to evict him from the property you require the orders of the civil court, which you may obtain by filing a suit for his eviction. Both the cases should be filed simultaneously to generate the required amount of heat on him.”

When a sibling refuses to move out of the property 

Kirtan Sinha’s mother had passed away in 2005 and his mother’s property was given to him and his brother Manik. While Kirtan has been living away for the last 30 years, Manik has been using the property all this while and has also let it out to tenants. Kirtan had asked Manik to vacate the house but on his refusal to do so, he is looking at a way to sell his share of the house. He wants to know whether he can do it without making any physical changes in the house and without seeking his brother’s consent.   

In case of an inherited property, each sibling is an equal owner in the property unless there is a mention in the will that a certain percentage be given to one of the co-owners. This also means that if one of the co-owners wishes to move out, the others should choose to buy his share or decide to issue a surrender deed for the extent of the share of his property.

In Kirtan and Manik’s case, this may not be easy given that the latter feels he is the real owner of the property or is refusing to share his entitlement. In case the partition is through mutual consent, a partition deed is executed by the co-owners of a property. However, to make it legally valid, the partition deed should be registered at the sub-registrar office of the area. It becomes important here to talk about the partition deed. Although you should seek legal help when filing a partition suit, here is a little guide to help you understand the logic behind a partition deed.

All about partition deed

As more than one person can jointly own a property, they all have either equal or a certain percentage of the right to possess and use the property. Partition of property helps protect the interest of co-owners. Post division, you get to become the independent owner of your share of the property and you could sell, gift, transfer, exchange or surrender at your will. This helps avoid problems that could have otherwise happened when it comes to taxation, inheritance or when you transferred your share of the property. It could also help ascertain your rights if you were to be alienated from your family for any personal reason.

It is not always easy to amicably resolve issues related to property. If the co-owners are ready for the partition, they need to execute a Deed of Partition. Like all legal documents, a partition deed must be duly signed by all the co-owners irrespective of the fact whether they have the same ancestry or are business partners or co-owners in any other way. The number of co-owners could vary.

Next, this partition deed must be registered at the sub-registrar’s office where the property is located. You would also be required to pay a stamp duty of two per cent of the value of property that is to be partitioned.  Here is what a partition deed looks like this

Note

It is not necessary that the share of co-owners in the partitioned property should be equal. It depends on the amount of investment put in or what the purchase document establishes the share as. In case there is no share of investment, then it is assumed that all co-owners have an equal undivided share of title and right in the property. One crucial aspect of joint ownership is the undivided share. Although all co-owners are equal or part owners of the property, their shares are not physically ascertainable with definitive boundaries. Thus, the shares remain undivided.

When there is mutual consent, it is relatively easier to go ahead with the partition deed. Suppose the co-owners do not agree? If there is no mutual consent, you will need to file a partition suit in the court of law. We have explained how to go about a partition suit here.

In this case, you will also need to keep documents related to ownership, transfer and all the originals ready. Do note that this again has to be executed on a stamp paper and be careful to mention the exact share of the respective parties clearly. Also be careful to record it at the sub-registrar’s office with clarity on the effective date of partition.

Also Read

Documents To Check To Avoid Property Fraud

Do You Have A Right In Your Father’s Property? Find Out

Precautions To Take While Preparing Property Documents

Document writing is a professional’s job which requires expertise and thorough diligence. Whether you are a buyer or a seller,  it is important to take precautions while framing a property document. 

PropGuide tells you what precautions to take while drafting property documents.

Thoroughly check the particulars of the parties

The names of the parties concerned are material part of the document. Therefore, names should be correctly recorded in the document. To ensure this, verify the names from academic records, passport, or Aadhaar card to get the correct spelling (names) of the parties. If a person’s name is recorded differently in different records, mention the different versions of the name as alias. 

If a woman name is recorded as the daughter of a person in one link document and in another document it is recorded as the wife of a person, then it is better to record both aspects to avoid any confusion. 

Any small mistake will put the parties in trouble as the deed will have to be made all over again. The seller may not be available or his whereabouts may not be known to the buyers. Or the seller may demand additional money or put conditions to execute rectification deed in favour of the purchaser. In a nutshell, it is the duty of the buyer to ensure that the particulars are entered correctly.

Age of the parties

With all the records available, verify the correct age of the parties. Don’t put any approximate age. It is advisable to record the true age of the parties concerned.

Profession and addresses

The profession of the parties concerned, their present, and permanent addresses should also be properly documented without any errors. Any vague description of the parties will create confusion. It is important to get it cross-checked by another person to ensure that there are no mistakes.

Link document numbers

It is important to record correctly the link document number, date of registration, sub-registrar/registrar office name, and district name correctly. 

Money paid

You must record the details of money paid in numbers as well as words. This is an important part of the documentation process and proper care should be taken when recording this information.

Cheque or demand draft number 

If the amount is paid through a cheque or a demand draft, details such as its number, date of issue, bank and branch and the amount should be properly recorded. Take expert’s advice in recording the details of these instruments.

Schedule of the property

It describes the details of the property by mentioning in which village or city the property is located.

House location

It is equally important to correctly spell the district name, the sub-registrar office name, the town survey number, the plot number, the extent of the land, and all the four boundaries of the property. If it is an apartment, it is important to list the entire piece of land on which the apartment is built. Apart from that, flat number, common areas, car parking area (if any) should also be listed. 

It is vital to get full particulars of the owners of the adjoining properties rather than mentioning them vaguely such as ‘the neighbour’s property’. If there is a road along one of the boundaries, then its width should also be mentioned along with its name (if any). 

Attesting witnesses

Attesting witnesses play a crucial role in the event of a dispute regarding the document’s validity. It is important to have reputed and respected citizens to stand as witnesses. Their version regarding the execution of the document will be very critical in case of any dispute regarding the validity of the document in the court of law. Transfer of Property Act mandates that two witnesses should be present, but if parties wish then more than two persons may be taken as attesting witnesses.

For a foolproof job, give comprehensive and factual information in the document. Don’t leave everything on the document writers or lawyers, it’s important to actively participate in the documentation process because your stakes are higher. 

All You Need To Know About Sale Of Property In Case Of Partition

For various reasons, a court of law may come to a conclusion that a partition suit may not be able to lead to a successful partition of the property. It may then direct the sale of such property following rules as laid out in the Partition Act, 1893.

A court can mandate the sale only under the following circumstances:

1)   The partition suit had been filed before 1893,

2)   The nature of the property is such that it cannot be partitioned,

3)   A large number of shareholders,

4)   A decree for partition has been made before, or

5)   Any special circumstance recognised by the court.

In the event of any of the above, the court may deem fit that distribution of proceeds may be beneficial to the concerned parties. In some cases, the shareholder might feel the need for sale of the said property and may request for it.

Now there can be many situations once the decision to sell and distribute the proceeds has been taken:

When a sharer undertakes to buy:  If a shareholder says that they would like to buy, the court can order a valuation of the share/s and sell it at an ascertained price.

When there are multiple shareholders willing to buy: Suppose there are two or more shareholders who want to buy, the court will order the sale to the shareholder who is ready to pay the highest price for the property. This amount would be higher than the price ascertained after the valuation is conducted.

If no shareholder is willing to buy: It may so happen that none of the shareholders may be willing to buy the property. In such a case, the applicant will be liable to bear the costs incident to the application.

If the transferee files a partition suit: If the property share of an undivided Hindu family had been sold to someone who is not a member of this family and if this non-member (transferee) files a partition suit, the court can direct a willing shareholder (family member) to buy this property after a valuation. All necessary directions in this regard are also overseen by the court. Likewise, if there are multiple shareholders willing to buy this property in question, the party that is willing to pay the highest will be preferred as a purchaser.

Request for sale/application to buy on behalf of a member: You can always authorise any capable person to act on your behalf and file a partition suit. However, a court of law is not bound to accept such a request, application or an undertaking unless it recognises that it is for the benefit of the party.

Court reserves the bidding amount: All kind of sale is subject to a reserved bidding and the amount is fixed by the court. This may vary from time to time. Shareholders can also bid at such a sale citing non-payment of deposit or setting off the purchase-money or accounting for the purchase money.

The shareholder, however, is always at an advantage if a non-member has bid the same sum at such a sale.

Rules behind sale dependent on jurisdiction

The Registrar will oversee the sale of the property if it is sold after an order from the High Court of Calcutta, Madras of Bombay. If the property is sold under the order of any other court, then the sale of property shall be conducted on the basis of rules prescribed in the Code of Civil Procedure or rules formed by the High Court from time to time.

Those partition suits (pending suits) that were filed before the commencement of the Partition Act and in which partition has not been finally approved also come under this Act.

Can the property be partly sold?

In any partition suit, if the Court deems it fit, the property can be partly partitioned and partly sold as well. The Court will order a decree to this effect.

Note that the Partition Act applies to all of India except Jammu and Kashmir. However, if there are any local laws of any state that monitors the partition of immovable property, these would be adhered to without compromise.

All About Carpet Area, Built-up Area And Super Built-up Area

Going for a house purchase and still confused how carpet area is different from built-up area? Before you start to comprehend that, your attention wanders to another question: how is built-up area different from super built-up areas?

Here is a quick guide:

What is carpet area?

Carpet Area

Carpet area is the area that can be used to spread a carpet inside the house. It is the net usable area of the apartment. It includes the thickness of the internal wall but excludes balcony or terrace. Technically, the distance between inner walls is carpet area. Also, it will include staircase only if it is inside the apartment, but balcony, lift, lobby, etc. will not include in carpet area. 

How to calculate the total carpet area?

There are several ways of calculating carpet area. Firstly, you should know that carpet area is 70 per cent of built-up area. For instance, assuming that the built-up area is 1,000 sq ft, your carpet area should be 70 per cent off 1,000 sq ft, which is, in this case, is 700 sq ft. So your carpet area is 700 sq ft.

What is built-up area?

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In easy words, built-up area is the carpet area plus the area covered by walls. The built-up area includes balconies, terraces (with or without roof), mezzanine floors and other detachable habitable areas such as servant room, etc. You should also know that walls which are shared with other units are factored in at 50 per cent while other walls are computed fully.

How to calculate built-up area?

Logically, built-up area = carpet area + areas covered by walls. Generally, it is 10-15 per cent more than the carpet area. This can be understood with this following example.

Suppose, areas covered as dry balcony, terraces add up to the 10 per cent of the built-up area while the usable area is just 70 per cent of the built-up area. So, if built up area is 1,000 sq ft, it implies that 30 per cent i.e. the 300 sq ft is not usable while 700 sq ft is the remaining area that will be used.

What is super built-up area?

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Super built-up area is the built-up area in addition to the proportionate share of entrance lobby, corridors, stair cases, lift shafts, lift lobby, generator rooms, club house, security room and any other common areas in the complex. However, underground sump, water tanks, walk ways, swimming pool, open sports facilities, weather sheds, inaccessible flower beds, lofts shall not include in super built-up area.

Calculating super built-up area

Since super built-up area factors in the common areas such as elevator, veranda, clubhouse, etc, developers consider 1.25 as a multiplying factor to calculate super built-up area. This increases the total saleable area by 25 per cent. This percentage is called loading. Few developers tend to quote loading figueres while computing saleable area. For instance, if the carpet area is 600 sq ft, the builder adds loading of 30 per cent, you have to pay for 780 sq ft, whereas you are using just 600 sq ft.

Also Read: How carpet area definition changes in RERA