purchasing an Unregistered Property Make Sense : Purchasing a home is a major choice that requires significant financial outlays. Individuals typically choose between resale, under-construction, and ready-to-move-in residences. Everyone has benefits and drawbacks of its own. Generally speaking, if you’re searching for a place where there aren’t any new projects, you buy a resale home. Budget is also important because these are usually a little less expensive than brand-new, move-in ready apartments. The possibility that many resale houses are unregistered, however, presents a significant risk. We will discuss the hazards connected to these kinds of assets in this book, which could lead to significant losses as opposed to profits.
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A resale property: what is it?
The buyer (current owner) purchases and lists a resale property. People often make the mistake of choosing an unregistered resale property because it is less expensive. This is a potentially risky and expensive endeavor.
The difference between unregistered and registered resale properties
Registered resale property
Unregistered resale property
These will not have any undisclosed liabilities as they must be settled before the sale and registration of the property.
These will have undisclosed liabilities which may trouble the property owner later.
A property, which is registered, is protected under law in case of disputes.
An unregistered property is not protected under law in case of disputes.
Ownership is clear in registered properties.
Ownership is not clear in unregistered properties.
The registration takes place after proper validation of the property in the sub-registrar’s office in the presence of the buyer, seller, and witnesses.
No such activity takes place. Hence, the validation of the property doesn’t occur.
These properties are legally registered, and their records are with the government.
These properties do not have information recorded with the government.
Registration process involves payment of stamp duty and registration charges.
No such fees are paid.
Why shouldn’t you purchase unregistered real estate?
Lack of ownership: When a property is unregistered, its owner is absent. Due to the lack of an owner, this will cause issues for the buyer down the road.
Finance issues: Obtaining funds in the form of house loans is a laborious process because unregistered homes could not have the necessary paperwork.
Encumbrances: Since the title is not record, the new owner will also be responsible for numerous overdue property taxes and other encumbrances.
Hard to Sell: It will be challenging to resell this property in the absence of any documentation. If the seller finds a buyer, they might have to give it away as part of a distress sale and will never be able to recoup the full market value that the property would command if it were registere.
Difficult to legalize: It will be challenging to legalize and register the property in the absence of the necessary paperwork and proof of prior ownership. A significant sum of money will also need to be spent on this project—money that, ideally, the seller from whom you purchase the house should have spent.
Can properties that are not registere be eligible for a house loan?
Although it is possible to obtain a house loan for an unregistered property, it is not as simple as it is for a registered property. Banks adhere to standard operating procedures (SOP) when awarding house loans for real estate, but these Sops cannot be followed in the event of unregistere real estate. They therefore take significantly stricter action when it comes to unregistered properties.
Find out if banks and other financial institutions pay out house loans for homes that aren’t registere.
Any loan you receive from a financial institution will be smaller than the loan received by a registered property. As a result, your down payment will need to be larger.
Additionally, the interest rate on the loan for your unregistered property will be higher than it is for registered homes.
Additional guarantees against the loan amount, such as certain assets, co-signers, guarantors, etc., may be requeste by financial institutions.
How can one prove they are the owner of unregistered property?
Find out who owned the property before you. Find the owner’s legitimate heirs and have them sign a selling deed in your name if the owner has passed away.
You might need to file a declaratory suit if the previous owner won’t sign a sale deed. In this case, you should state that the property belongs to you, your father, or your ancestors, and that the seller paid the full consideration and stamp duty but neglected to go to the SRO to register it and transfer ownership.
Lastly, you can file a formal application claiming that you have been residing here and that you are in adverse possession, which should result in the transfer of title rights to you, if you have been living in a property for more than 12 years and no one else has claimed it.
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Purchasing an unregistered home could seem like a wise choice because you could save money, but there could be a lot of expensive and frustrating legal issues involved. It is advise against investing money in unregistere real estate since you won’t have a legal record of ownership.
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