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What are the consequences of not registering a property sale agreement in Delhi?

What are the consequences of not registering a property sale agreement in Delhi?

Published At July 12, 2024

Answer

A property sale agreement in Delhi can lead to several legal and practical consequences.

  • Legal Non-Enforceability: An unregistered sale agreement is not legally enforceable. This means that if any disputes arise, the agreement cannot be used as evidence in court to assert any legal claims. The agreement might be used for collateral purposes, such as proving payment, but it cannot establish ownership or other primary rights over the property​​.
  • Risk of Fraud and Disputes: Without registration, there is a higher risk of fraudulent transactions. Multiple agreements for the same property could be executed without the buyer’s knowledge, leading to potential disputes. Registration ensures that the transaction is recorded in the public domain, reducing the risk of fraud​​.
  • Financial Penalties: The law mandates registration of property sale agreements. Non-compliance can attract financial penalties and additional stamp duty when rectifying the registration later. This can lead to increased costs and legal complications​.
  • Lack of Legal Protection: An unregistered agreement does not provide legal protection to the buyer. If the seller fails to honor the terms, the buyer cannot seek specific performance since the agreement is not legally binding​​.
  • Hurdles in Future Transactions: Future transactions involving the property can face significant hurdles if the initial sale agreement is not registered. This can complicate matters for obtaining loans, selling the property, or transferring ownership, as the chain of title will be unclear.

Registering a property sale agreement in Delhi is crucial to ensure legal enforceability, protect against fraud, and avoid financial and legal complications.

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