Introduction
Ranchi, the capital of Jharkhand, is an evolving city with growing opportunities in the real estate market. Whether you’re a buyer looking for a new home or a seller aiming to make the most of your property, understanding the legal framework surrounding real estate transactions is crucial. A solid grasp of real estate laws will ensure smooth transactions and protect you from potential legal disputes. This article provides an overview of key real estate laws and practices that every buyer and seller in Ranchi should know.
Note: You can contact real estate consultant who provides legally approved flat for sale in Ranchi.
1. Verifying Property Ownership
Before buying or selling property, it is essential to confirm legal ownership.
- Title Deed: The title deed is the most important document establishing ownership of the property. Buyers must thoroughly verify that the seller has clear ownership rights and that the title is free from disputes, encumbrances, or claims.
- Encumbrance Certificate: This certificate ensures that the property is free of financial obligations such as loans or mortgages. It provides the buyer with assurance that the property has no legal liabilities.
2. Property Registration and Stamp Duty
Property transactions must be legally registered, and both buyers and sellers must understand the process.
- Stamp Duty: When buying property in Ranchi, buyers are required to pay stamp duty. This fee is typically 7% to 9% of the property’s market value, depending on the area and property type. It is a critical step in ensuring the legal transfer of ownership.
- Registration Fee: A registration fee, usually around 1% to 2% of the property’s value, must also be paid when registering the sale deed. Failure to register the property can lead to disputes and make the transaction legally invalid.
3. Real Estate Regulatory Authority (RERA)
The Real Estate (Regulation and Development) Act, 2016 (RERA) has been introduced to ensure greater transparency in real estate transactions and to protect the interests of home buyers.
- RERA-Registered Projects: Buyers should verify that any residential or commercial projects in Ranchi are registered with RERA. This ensures that the builder or developer complies with all regulatory requirements, including project deadlines, quality standards, and the promised layout.
- Builder’s Accountability: Under RERA, developers must adhere to the agreed project timeline, and any deviations from the plan may result in penalties. Buyers can file complaints with RERA for delays or misrepresentations.
4. Agreement for Sale and Sale Deed
The sale process involves two key documents: the agreement for sale and the sale deed.
- Agreement for Sale: This is a preliminary document that outlines the terms and conditions between the buyer and the seller, such as the sale price, payment schedule, and possession date. It protects both parties by ensuring that all terms are agreed upon before finalizing the sale.
- Sale Deed: Once all terms are met, the sale deed is drafted and registered. It must be executed and signed by both parties in the presence of witnesses and registered with the local sub-registrar office in Ranchi.
5. Zoning and Land Use Regulations
Property buyers and sellers in Ranchi must be aware of zoning and land use regulations to avoid legal complications.
- Zoning Laws: Ranchi’s municipal authorities regulate land use in specific areas, determining whether land can be used for residential, commercial, or industrial purposes. Buyers should verify that the property is approved for the intended use to avoid issues with local authorities.
- Land Conversion Certificate: For agricultural land being converted to residential or commercial purposes, buyers must ensure the property has a land conversion certificate from the local authorities.
6. Mutation of Property
After buying a property, the mutation process is necessary to reflect the buyer’s name in the municipal or revenue records.
- Mutation Certificate: This certificate is essential for the new owner to pay property taxes in their name. It does not establish ownership but ensures that the property is officially recorded in the buyer’s name.
7. Capital Gains Tax and TDS
Both buyers and sellers should be aware of tax implications involved in real estate transactions.
- Capital Gains Tax for Sellers: If a property is sold for a profit, the seller is liable to pay capital gains tax. The amount varies depending on whether it’s a short-term or long-term gain.
- TDS on Property Transactions: Buyers must deduct 1% tax deducted at source (TDS) if the property value exceeds ₹50 lakh. This TDS must be deposited with the Income Tax Department, and a certificate provided to the seller as proof of deduction.
8. Power of Attorney (PoA)
A Power of Attorney (PoA) allows someone to act on your behalf in a property transaction if you cannot be physically present.
- Specific PoA: It’s advisable to use a specific PoA that clearly defines the scope of authority, such as selling or buying a particular property, to avoid misuse of power.
9. Legal Due Diligence
Before finalizing a deal, conducting legal due diligence is essential for both buyers and sellers.
- Buyer’s Due Diligence: Buyers should verify all property documents, including ownership, building approvals, and environmental clearances. Consulting a real estate lawyer in Ranchi can ensure the property is free of legal encumbrances.
- Seller’s Responsibility: Sellers should ensure that all property documents, including tax receipts and approvals, are up to date and available for verification.
Conclusion:
Whether you’re buying or selling property in Ranchi, understanding the real estate laws can save you from future complications. Buyers need to verify property ownership, check for RERA compliance, and ensure registration and mutation are completed. Sellers must have clear title deeds, be aware of tax liabilities, and follow legal protocols to ensure a smooth transaction. Consulting legal experts or real estate professionals in Ranchi is highly recommended to navigate the complexities of property transactions confidently.