Delhi govt order to ease sale of property
Jul 22, 2013
Source : The Economic Times


DELHI: With the stamp of approval from LG Najeeb Jung, the Delhi government has decided to reverse the directive that put a stop to registration of all general power of attorney (GPA)-based property transactions. The earlier order was issued by the revenue department in April 2012.

The fresh orders will open the door to registrations based on GPA but with a rider that these can only be legal transfers and cannot be construed as transfers of title that enables mutation of property.

The move will enable GPAbased sales and registration of properties in areas like unauthorized colonies, where there is no documentation to execute a clear sale deed with transfer of title. For the pollbound Delhi government, it is a move to woo the lakhs of voters in these colonies, which are growing into a potential ground for real estate dealers.

Before the 2012 orders came into force, around 20 percent of registries were done through GPA transfers—a common way of selling leasehold properties and those that don’t have a clear title. Bankers said the proportion of GPA transfers were even higher in sales involving bank loans.

The final order on allowing registration of GPA-based registrations has got the sanction of the LG and final orders are likely to be issued on 22nd July. Chief minister was quick to capitalize on the decision and made the announcement at a public meeting in Nangloi late on 19th July evening.

The government hopes to see its revenue spiral if such registrations are enabled through a fresh circular which, it says, is a clarification following a high court order last month which quashed the Delhi Government’s April 24, 2012, circular. The revenue department says that the circular has been drafted keeping in mind the spirit of the Supreme Court’s 2011 judgment.

The broad contours of the circular that is set to reverse the previous orders states that nothing stops a registered property owner from executing a General Power of Attorney or Special Power of Attorney in the name of spouse, relative or any person of trust to manage his property or empowering him or her to execute any further deed of transfer including sale gift deed on behalf of registered owner.

It is clarified that it is also legally tenable if the registered property owner enters into a land development agreement with a builder and executes a registered power of attorney. Also, the registered power of attorney holder is competent to execute further the deed of transfer like gift deed and sale in accordance with the terms of the GPA.

All this is said with a rider. Properties can be transferred only by registered sale deed. GPA-based transactions cannot be the basis for a mutation to enable transfer of the property’s title. The department had maintained that the order was required as GPA transfer transactions left no evidence of how many times a property changed hands. The order aimed at cleaner transactions with clear title deeds and higher revenue for the government.

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