Power of Attorney Property Deals Banned in Delhi

In an order that puts thousands of property transactions in Delhi under a cloud, the revenue department has made all real estate property sales through transfer of GPA ( general power of attorney) null and void with retrospective effect from October last year (2011).

The order, dated April 27, 2012 directs all 13 sub-registrar offices, DDA &  NDMC to follow the Supreme Court’s order last October that no sale deed will be registered if it is through a GPA transfer. This means transactions carried out since October on GPA transfers will have to be registered afresh with complete documents.

On average, about 20% of registries are done through GPA transfers, a common way of selling leasehold properties &  those that do not have a clear title.

In Delhi’s northwest district, for instance, of 5,300 documents registered across 3 sub-registrar offices in March,(2012) 1,157 were GPA transfer registries.

The proportion of GPA transfers were even higher in sales involving bank home loans.

The order will reduce the number of saleable properties in Delhi and lead to a hike in the value of properties on freehold land.

Citing the October 11, 2011, judgment of the Supreme Court, the revenue department circular says, “It is reiterated that immovable property can be legally and lawfully transferred only by a registered deed of conveyance (sale deed)… ‘GPA sales’ of ‘SA  (sale agreement)/ GPA / will transfer’ do not convey title and do not amount to transfer, nor can they be recognized as valid mode of transfer of immovable property. The court will not treat such transactions as completed…”

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