Registration of Agreement for Sale: Why It`s Important

When buying or selling a property, drafting an agreement for sale is a crucial step. It is a legally binding document that outlines the terms and conditions of the transaction. However, simply creating an agreement for sale is not enough. It must be registered with the appropriate authority to make it legally valid.

The process of registration involves submitting the agreement for sale to the concerned sub-registrar office. The registrar verifies the document and checks for any discrepancies. Once everything is in order, he or she registers the agreement and issues a receipt. The registration process requires the payment of a fee, which varies depending on the value of the property.

There are several reasons why registration of agreement for sale is important:

Legal Validity: An unregistered agreement for sale is not legally valid. It cannot be accepted as evidence in court, nor can it be used for any legal proceedings. A registered agreement, on the other hand, is legally valid and provides protection to both parties involved in the transaction.

Proof of Ownership: A registered agreement for sale is proof of ownership. It shows that the seller has transferred ownership of the property to the buyer. It also serves as evidence of the transaction and the terms and conditions agreed upon.

Prevents Fraud: Registration of agreement for sale helps prevent fraud. Since the document is verified by the registrar, any discrepancies or fraudulent activities are detected and corrected. This ensures that both the buyer and seller are protected from potential fraud.

Mortgage: A registered agreement for sale is necessary if the buyer wishes to take out a mortgage on the property. Lenders require a registered agreement to verify ownership and to ensure that the property is free from encumbrances.

Taxation: Registration of agreement for sale is necessary for payment of stamp duty and other taxes. Failure to register the agreement can result in penalties and legal action.

In conclusion, registration of agreement for sale is a crucial step in any property transaction. It ensures legal validity, proof of ownership, prevention of fraud, and is necessary for taking out a mortgage and taxation purposes. Therefore, it is important to ensure that any agreement for sale is registered with the appropriate authority.