Under 1-year lease to get legal cover

- Sunday, June 24, 2012 6:39:47 PM

The government may make it required to register "lease" documents even for a period of less than one year, a move aimed at putting property owners and tenants on a stronger legal footing in case of disputes.
An alteration proposed to the Registration Act, 1908, seeks to redefine "lease" to remove the provision which says that those for a period under one year need not be registered.

The alteration would, however, exempt "lease" agreements pertaining to an amount which is below the “floor price”. The move is aimed at giving a stronger legal standing to sections like property owners and buyers or tenants who don't have their lease documents registered, largely because the period they deal with is under one year.

The provision of non-registration is exploited by groups like landlords who tailor the lease in a way (like 11 months) to keep them from registration. Conversely, there are cases of land grabs or squatting where non-registered lease puts the owners on a weak wicket.

It is part of the changes that Union rural development ministry has proposed to the Registration Act, and is being vetted by the law ministry.

The government may also make it mandatory to register powers of attorney. The transfer of property without registration causes loss to exchequer and is also a big source of disputes. Powers of attorney would be put under Section 17 of the act which deals with compulsory registration.

A new clause is proposed to authorize 'registration officers' to refuse registration. Following the change in law, the officer could invoke his authority in case of documents relating to transfer of properties belonging to government, property under litigation, those belonging to charities or those whose transfer has been banned by states.

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