If you’re interested in playing in the property sector in Pakistan, then the best way to start is familiarising yourself with the legal terminologies, industry lingo, and other property-related matters that often go unnoticed, such as knowing the differences between transfer and registration of property. Being aware of the details and terminologies might not qualify you to be called an expert; they will, however, help you avoid the many pitfalls that can threaten your hard-earned investment.
Previously, we had discussed the key differences between registry and inteqal. And now, we’re here to take the next step by understanding the differences between transfer and registration of property.
Key Differences between Transfer and Registration of Property
We get a lot of queries about the legal aspects of property transactions quite regularly. There are various things that need to be considered for every individual property-related transaction, and a lot of legal nitty-gritty has to be adequately dealt with. Thus, it is imperative that this matter is appropriately separated and understood with all the challenges that it poses.
On a side note, to explore more about different types of property taxes in Pakistan, head to our recently published blog now.
What is the Meaning of Property Transfer?
In continuation of discussing major differences between property registration and transfer, it is important to know that two common cases apply to property transfer in Pakistan, including: “immovable property given to someone as a gift” and “inheritance”. The latter mostly occurs in cases where the owner of a property dies.
So, what does the law actually say about the transfer of property in Pakistan? Let’s discuss it in detail.
To begin with, “gift” is associated with any property or land transfer during the owner’s life. This type of property transfer is quite common in Pakistan, and it involves no complex procedures but immediate acceptance of the “gift”. No prices are charged against this type of property transfer.
Inheritance of property, on the other hand, involves the ultimate transfer of property/land to the legal heirs (usually off-springs of the deceased person). According to the Transfer of Property Act and Islamic Law, there’s no concept of “Will”, and the property is distributed equally among all legal heirs. Hence, this situation is one of the most common property disputes in Pakistan if it isn’t resolved during a person’s lifetime.
Documents Required for Transfer of Property in Pakistan
Here’s a list of documents required to carry out the process of property transfer in Pakistan smoothly:
- Original copy of Land Ownership Papers
- Photocopies of National Identity Cards of the seller, buyer, and other witnesses
- Passport (for Non-Pakistanis)
- No-Objection Certificate from Building Control Authority of the respective state
- No-Object Certificate from M/o regarding property transaction (for foreigners)
- No-Objection Certificate from Foreign Office regarding property transaction (for foreigners)
- Bank draft of PKR 3,000 – PKR 5,000 (depending on the case)
What is the Meaning of Property Registration in Pakistan?
The registration of a property is simply a legal procedure of stamping and paying charges against a sales deed. It is more or less similar to property transfer except for the monetary factor. A buyer “purchases” the property on its market or agreed value from a seller and registers the transactions in the registrar’s office.
Documents Required for Property Registration in Pakistan
Here’s a comprehensive list of important credentials for property registration in Pakistan:
- National Identity Cards of the seller, buyer, and witnesses
- The original title deed of seller
- Stamped Conveyance/Sale deed
- Power of Attorney (if any)
- No-Objection Certificate from the Town Nazim
Expert’s Word on Transfer and Registration of Property in Pakistan
According to Mr. Waqar Latif from Masood & Masood, Corporate & Legal Consultants, “The basic difference between the transfer and registration of the property is that the transfer is when the seller transfers property to the other buyer, whereas, registration is done in the name of the present buyer”. Elaborating his views, Mr. Waqar further added, “Both depict a stage-wise process, requiring extensive coordination with legal experts. Both of these are legal contracts, binding on all parties and, therefore, require that they are dealt in the same way.”
In continuation with his explanation, Mr. Latif also pointed out in reference to his personal experience, “People are mostly unaware about matters of registrations and transfer of property in case of a death in the family.” He added, “People in such circumstances should know that the matter has to be dealt lawfully and that the longer they prolong it, the more complicated it will get.”
Speaking on the same subject, Ms. Nazia Ali from Nazia Law Associates also corresponded with Waqar Latif’s opinion that it is a stage-wise process. She said, “For every transfer of property, registration also has to be carried out in the new buyer’s name.”
She further added, “All that is to be carried out with the help of a government official. In case the transaction is to be carried out with a woman, a local commission is set up, that works as a liaison between the government official (also known as patwari in local language) and the woman to carry out these legal duties.”
Furthermore, Mr. Chaudhry Ijaz Ashraf, a lawyer from Ashraf & Ashraf Law Firm also contributed to Mr. Waqar Latif’s views and said, “Most of the problems that occur are in cases of death of a person who leaves behind legal heir. In such cases, the Declaration of Property is to be made, which is a legal decree.”
Mr. Ashraf specified his point and further added, “This decree is taken from the revenue department and that following this – a newspaper advertisement is also published. And, after a period of fifteen days, the court waits and takes no action further along with the specified steps. These are the first steps for formalising the process of transfer and moving towards registration.”
“In case of selling a property”, Chaudhry Ijaz said, “There is an agreement to sell that is to be signed between the interested parties.” Furthermore, he highlighted, “The process requires three things; offer (the proposed value of exchange), consideration (mode of paying) and then acceptance (the final exchange of goods, signifying that the deal has been made).”
All in all, the process of both transfer and registration of property is a legal matter and should at all times be dealt in this way. Cases of mutation are particular, but the sooner you take these up with a legal consultant, the better you will be in putting things in place. This process can take up to 2-3 months, owing to the presence and requirements of different laws.
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