In 2004, the government had made registration of the sale agreement mandatory, requiring payment of 90% of stamp duty and corporation tax for a property transaction to be deemed complete. Therefore, the government will not gain additional revenue following the Supreme Court's order. The registrar's office also keeps track of sale agreements which shows all transactions related to a particular property. However, people were still engaging in sale pf properties through general power of attorney.
This order would impact lot of people and will bring down transactions in the real estate market in the short term. However, it may bring down legal disputes in the long term. Though, this verdict will cause anxiety to owners who have bought dispute free properties on general power of attorney and sale agreement simply because paperwork wasn't complete for a proper sale registration. Apartment owners in societies which have not got a completion certificate will find themselves on a tough spot because these flats cannot be converted into freehold. Even after regularization of some unauthorized colonies, a large number of properties are still owned through power of attorney because the authorities have never actively facilitated their conversion to freehold.
Also, bank loans will not be available for property transactions which take place through power of attorney. After this, there should be rise in the market value of freehold real estate while the price of leasehold properties shall go down.
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