Govt may make registration must for 11 month leases


Lease DocumentsThe government may make it compulsory to register “lease” documents even for a period of less than one year, a move aimed at putting property owners and tenants on a stronger legal footing in case of disputes.

An amendment proposed to the Registration Act, 1908, seeks to redefine “lease” to remove the provision which says that those for a period under one year need not be registered. The amendment would, however, exempt “lease” agreements pertaining to an amount which is below the “floor price”. The move is aimed at giving a stronger legal standing to sections like property owners and buyers or tenants who don’t have their lease documents registered, largely because the period they deal with is under one year.

The provision of non-registration is exploited by groups like landlords who tailor the lease in a way (like 11 months) to keep them from registration. Conversely, there are cases of land grabs or squatting where non-registered lease puts the owners on a weak wicket.

Sources said making registration compulsory for every lease could hinder business because of sheer volume and the government has thought of a “floor price” to make it binding. States are likely to be given the freedom to decide the “floor price” and they could fix it according to what suits the larger public interest there.

It is part of the changes that Union rural development ministry has proposed to the Registration Act, and are being vetted by the law ministry. The government may also make it mandatory to register powers of attorney. The transfer of property without registration causes loss to exchequer and is also a big source of disputes. Powers of attorney would be put under Section 17 of the act which deals with compulsory registration.

In another change, the “registered documents” relating to moveable and immoveable property would no longer be secrets in the registrar’s office for which officials are to be pestered or bribed for a glance. The changed law may throw the “Book 4” open for general viewing. “Book 4” or the Miscellaneous Register is a compendium of all registered documents of certain value which is not allowed to be accessed by the general public. Sources said it would enable citizens to verify facts like ownership details of certain properties.

A new clause is proposed to authorize ‘registration officers’ to refuse registration. Following the change in law, the officer could invoke his authority in case of documents relating to transfer of properties belonging to government, property under litigation, those belonging to charities or those whose transfer has been banned by states.

Source: The Times of India, New Delhi

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