Summary of this article
Only registered sale deeds prove ownership.
GPA or agreements don’t transfer property title.
Ruling promotes transparency, curbs benami transactions.
Recently, the Supreme Court has clarified all myths and beliefs around property ownership. Cutting through years of confusion surrounding the role of sales deeds, agreements, and possessions as a determining factor in who actually owns the piece of land. For countless buyers and sellers, mapping through the Indian real estate landscape required a much-needed clarity.
The crux of the ruling is one key message: the only proof of property ownership is a registered sale deed. Documents such as a general power of attorney, sale agreement, and payment receipts do not pass as ownership themselves. They may be proofs of intent and transactions, but they do not amount to the transfer of title.
The distinction is important because for years, buyers in urban and semi-urban areas relied on these alternatives to buy and sell property. This is done mainly to avoid stamp duty, or if the previous transfers were informal.
Key Takeaways From The Ruling
The Supreme Court has made it clear that such practices have no legal standing when it comes to ownership. A GPA or sale agreement only establishes that both parties have agreed to enter a sale agreement for a future date. These documents do not replace the formal process of transfer and the legally binding process. Without the formal transfer process, the title of ownership does not shift to the new buyer.
The ruling has also highlighted a second point to keep in mind: possession is not ownership. Even if someone occupies or uses a property, that does not make them the owner legally unless the registered sale deed can prove possession. This is another complex legal route that does not apply to the vast majority of transactions.
The clarification affects people directly who buy properties through "GPA Sales". This way of ownership used to be a common practice in Delhi NCR and several urban areas. Many properties still occupy properties that were 'transferred' through GPA's or notarised documents, believing these are proper substitutes for transfer papers. The Supreme Court's stance means that these buyers don't have any legal ownership over the property they've paid for. This can result in disputes and issues if they try to sell the property later on.
This judgement also strengthens the state governments' efforts to deal with benami transactions, undervaluation, and revenue losses. By reminding these rules, the court is pushing the system towards a more transparent and trustworthy real estate market.
For buyers, the takeaway of the ruling is simple: avoid shortcuts. Keep in mind before purchasing any property to make sure that the seller has a clear title of ownership and that the transfer takes place through a well-executed sale deed.
