Purchasing a piece of property is one of the most important financial decisions you can make in your life. There is something about buying land that makes you feel proud and gives you a huge sense of accomplishment.
However, it is highly essential that you don’t get carried away but take absolute care in every stage of the land registration process. Even more, if you are planning to make a real estate investment in Kerala without an experienced property consultant’s support. Make sure you understand all rules and regulations set forth by the government regarding registration of land and the steps involved.
Here is a step by step guide to help you register land in Kerala, in a hassle-free manner.
1. Identify the Property
The first step in purchasing a property is of course, identifying it. Pick a location that you like, and choose a property that fits your budget range. Then try to negotiate the price of the property, the mode of payment and the tenure with the seller.
2. Get a Legal Opinion
Once you have spoken to the seller and finalized the terms, it is crucial that you meet with a lawyer. They will help you obtain a legal title report of the property you intend to purchase. Some basic checks need to be done to clarify various aspects of the property and the proposed sale transaction.
You can also conduct a research of all the property documents along with your lawyer to ensure that you have all facts regarding the property, and it is a reliable purchase. The legal title report is compiled based on all the general information that has been collected. It usually takes about 3 to 5 days to prepare and submit a title report.
3. Obtain the Encumbrance Certificate
An encumbrance certificate is an important document that helps you verify whether the immovable property you plan to buy is free from claims such as loans, leases, unpaid debts, etc. The Sub-Registrar’s office issues the encumbrance certificate after verification of the relevant property documents, and it certifies all the transactions made on the property for the time period you specify. It is important that you get the encumbrance certificate (for a period of at least 30 years) before you enter into an agreement for the sale.
4. Check the Revenue Records / Mutation Details
When the title of a property is transferred from one person to another, it is recorded in the revenue records as mutation of property. The mutation is recorded in the records for land tax payment purposes. However, the mutation is not a conclusive proof of land ownership as it is just a record for the Government to decide who to collect the taxes from.
Application for mutation will vary depending on the Re-survey status in the Village in which the property is located. If the Village Re-survey has been completed and the ROR procedure has been implemented, obtain an ROR before registration. Once the registration has been completed, the mutation is automatically done based on the information in the ROR. The applicant should pay the taxes once the mutation is complete.
In Villages where Re-survey has not been completed, you will have to submit an application containing the relevant information on plain paper, along with a non judicial stamp of relevant value, copy of the title deed and prior deed to the Village Officer to initiate the mutation proceedings.
5. Sign the Agreement
An agreement is a written contract between the buyer and the seller in the presence of two witnesses. The seller agrees to sell his property, and you (the buyer) agree to buy it under the recorded terms and conditions. These conditions are mentioned in the agreement and usually include the property value, property extent, period of documentation, advance amount paid, terms regarding property encumbrance, possession, previous document details, etc. If there are any buildings or furniture present on the property, the area of the building (in sqft), furniture details (if it is included in the sale consideration amount), and a brief description of any type of plantations present on the property are also recorded.
The agreement is prepared on stamp paper and it also includes what kind of legal penalty is to be enforced if the buyer or seller violate the terms of their agreement.
6. Register the Agreement
Only registered agreements create an interest in the property and are legally enforceable. Hence it is advisable to register the sale agreement at the respective Sub-Registrar’s office. It would then reflect in the Sub-Registrar’s records, and any subsequent buyer will be able to find the existence of a valid agreement on the property. Registering an agreement attracts the relevant stamp duty and registration fees.
7. Buy Stamp Paper in the Buyer’s name and Pay Stamp Duty
The Stamp Paper has to be purchased in the name of the buyer from the State Treasury or Stamp Paper vendor depending on the value of the stamp. The value of the stamp varies based on the purchase price. Stamp papers upto the value of Rs 1 lakh can be purchased from local Stamp Paper Vendors. Anything above this value has to be bought online.
You can get the stamp duty rate from the Registrar’s office or from the official website of the Kerala Registration Department. The prevailing rate of stamp duty in Kerala is 8%, irrespective of whether the property is located in a Panchayat, Municipality or Corporation. There would be an additional registration fees of 2%. These rates will be periodically revised by the government.
8. Ascertain the Fair Value of the Land
The stamp duty is calculated based on the actual sale value of the property. However, it is mandatory that the documented sale value cannot be lower than the “fair value” of land which is determined by the government.
The existing fair value of land in Kerala was fixed in 2010, which has been revised by the Government several times. As of 2017, the fair value has been set as 50% more than that recorded in the Government fair value website. The government will introduce necessary amendments to the Government Stamp Act to enable these changes.
In Kerala is categorized into 15 types for the purpose of fair value calculation:
Commercially important Plot
Residential Plot with NH.PWD road access
A Residential Plot with Corp.Mun.Panch. road access
Residential Plots with private road access
Residential Plot without vehicular access
Garden Land with road access
Garden Land without road access
Water logged land
Hill Tract with road access
Hill Tract without road access
The fair value of land in each district in Kerala can be accessed using these links:
9. Get the Sale Deed Drafted by a Document Writer or Advocate
The Sale Deed document should be drafted by an experienced professional to ensure that it is defect free and does not cause any future complications. However, if the case may be, the buyer himself can draft the sale deed.
10. Register the Land in the Registrar’s Office
The land has to then be registered in the Sub Registrar’s office concerned. The registration must be done within the time frame recorded in the sale agreement. 2% of the cost of the land will be charged as registration fees, irrespective of the property’s location.
What You Need to Have Before the Day of Registration
You need to ensure that you have the following in place before you go for registration.
Original Title Deed
Land and Property Tax Receipts
Passport size photographs of the buyer and seller
PAN cards of the buyer and seller
Identification details of the buyer and seller
11.Receive the Documents after Registration
Once the registration is done, the office will provide you a receipt for the same. You can then collect the documents from the Registration Office after a few weeks.
12. Get the Property Mutated / Change the Title of the Property
In order to change the title of the property, you have to submit an application with copies of relevant documents in the village office. This is done to change the revenue record of the property from the seller’s name to the buyer’s name. This process is called ‘Pokkuvaravu’ in Malayalam. It is also referred to as ‘Thandaper Pidikkuka’ since you get a ‘Thandaper’ against your name once you mutate a property to your name.
13. Pay the Property Tax and Get Tax Receipts in Your Own Name
After the property is mutated, pay the applicable tax in your name in the corresponding village office.
Purchasing and registering land does not have to be slow and tedious. Follow the steps outlined above, and you will be able to breeze through the land registration process
HO : KOTTAYAM-KADUTHURUTHY
BR : KOTTAYAM- CEMENT JUNCTION
Real estate cunsulting officials at U.S.A. (Texas & Newyork) & Bombay