Registered a property sale deed? You need more to prove it’s yours!

Recently, the Supreme Court clarified that having a property registered in your name is not the only proof required to prove ownership. Separating conclusive legal ownership of a property from the act of registering a property in one’s own name, the Supreme Court held the latter is only a part of the process of claiming ownership. For complete ownership, several other documents are necessary.

In this Weekly, we lay down the new rules that every property owner must know and follow.

What are the key observations of the Supreme Court in this case?

While hearing a dispute over a piece of land in Telangana in the case of Mahnoor Fatima Imran & Ors. vs. M/S Viswesara Infrastructure Pvt. Ltd. & Ors, the court ruled that registration of a sale deed or a title deed is a procedural formality. It gives notice to the concerned registry but does not finalise the legal ownership. If there are any disputes or ambiguities in the title or sale deed, registration of the document will not result in overriding such defects. Owners will have to provide further documentation to validate their lawful ownership of a property.

In several instances, including the current case, the ownership of the original owner can remain not legally proven or be under dispute. If title or sale deeds are registered despite that, it can cause confusion about who really is the owner. For e.g., A buys a flat from B through a valid sale deed and then goes ahead and registers the property in her name. She later finds out that the flat wasn’t even B’s to sell in the first place. The court will then not recognise A as the legal owner despite the registration.

What are the documents required to prove lawful ownership of a property?

To claim lawful ownership, you must be able to produce :

• Original Title Deed : This can be the sale deed from the developer or the government authority, or a will, partition or a succession deed in case of inheritance or a gift deed.
• Encumbrance Certificate : You need to get a certificate from the sub-registrar’s office declaring the document has been free from any outstanding loan, mortgages or legal disputes for the 10 years prior to the date of the certificate. 
• Property Tax and Utility Bills : All property tax and utility bills have been paid in the name of the rightful owner. 
• Mutation documents : The mutation records in the relevant municipality office must reflect the rightful owner’s name and affirm that no pending liabilities remain with the property. 
• Three-pronged due diligence : The Court further laid down three critical tests of due diligence to determine whether the ownership is lawful or not. These are:
  • Proof of full payment of the property : The documents of the original purchase and subsequent documents recording any further transfer of property, with or without any financial transaction available as proof. 
  • Legal Possession of the property: There must be conclusive evidence that the owner is the legal owner of the property. There should be no disputes over possession. 
  • Custody of original property ownership : Irrespective of the number or or nature of transfers, the possession of the original legal documentation conferring the title of ownership of a property to an individual must be available. 

To know more about our rights over property and how to overcome disputes, read our explainer here.