Real estate market in Pakistan is thriving as always. In Pakistan, the financial stability comes from either owning a house or some fertile land. Hence the people chase after property to gain that stability. However owning a property or land in Pakistan comes with a set of government rules and laws, which are in place to ensure the secure transaction of land and property. It is these legalities that bring stability to the real estate market in Pakistan.
Whether you are a property owner, someone who is interested in buying or owning a property or just curious to know about the legalities of property in Pakistan this blog is your ultimate guide to the laws of land/property ownership, buying and selling in Pakistan.
Real Estate Laws:
There are four main laws concerning the ownership, selling and buying of the land and property in Pakistan.
- Transfer of Property Act,1882
- Registration Act, 1908
- Stamp Act 1899
- Land revenue act. 1967
Before we dive into the real estate legalities , let’s quickly take a look at the legal definition of the property.
Property: Legal Definition:
In legal terms property and land are not as synonymous as they are used. Property in legal terms can be defined as “any tangible or intangible thing that can be “owned” by or vested in a person” But that’s not all. Property is further divided into two categories,
- Movable:
Movable property includes assets such as your vehicle, jewelry, valuable goods as well as shares. In Pakistan, the crops, fruits, vegetables or any other thing that grows on the land and can be moved is also considered as an movable agricultural property.
- Immovable:
Immovable property includes land, houses, and apartments. All the structures that are linked or built on the property are also considered immovable property.
Now that we have a clarity about what can be considered a property in Pakistan, let’s look at the real estate legalities involving selling and buying of property in Pakistan.
Real Estate Legalities Involving the Selling and Buying of Property In Pakistan:
Real estate selling and buying is a complex act which requires certain laws for the just regulation of property selling and buying. Thus property needs legal protection due to its value in terms of being an asset.
Here are four main laws concerning the selling and buying of real estate property in pakistan:
- Transfer of Property Act 1882
- Stamp Act1899
- Registration Act 1908
- Land Revenue Act 1967
These laws cover the various aspects of selling and buying of property in Pakistan for the purpose of having smooth transactions of property. If you are a potential property buyer or seller and are looking to sell or buy a property, you must be aware of these laws to protect your own rights and keep the transactions legal. Here is the detailed view of these laws.
1. Transfer of Property Act 1882:
Transfer of property Act 1882, lays down the regulations of transferring property whether movable or immovable. It mentions the situations where the property can be or cannot be transferred. Here are some of the things that transfer of property Act 1882 addresses.
- Property:
The transfer of property act 1882 clearly defines the legal meaning of the property and the types of transferable property including movable and immovable property.
- Transfer of Property:
The act clarifies the conditions under which the property can be transferred and the persons that are eligible to have the property transferred to them including living persons and entities.
- Transferable property:
It talks about the types of property that can be transferred including land , house, apartment etc.
- Transfer of immovable property:
The act mentions the legal means to transfer the immovable property. These means can be, lease, mortgage, and sales deeds
- Lease And Mortgage:
The transfer of property act lays down the rights and responsibilities of both the parties i.e. the lessees ( who takes the leese) and lessors (who provide the lease), the mortgagors ( who provided the mortgage) and mortgagees ( who takes the mortgage)
- Conditions and restrictions:
The act strictly clarifies the conditions and restrictions of property transfer specifically related to minors and any attempted property fraud.
- Rights and liabilities of the parties involved:
The act clarifies the rights and liabilities of the parties involved in the act of property transfer including the transferor and the transferee.
The transfer of property act 1882 is a complete legal document of around 72 pages which has clearly mentioned in detail about the regulations of property transfer. These were just some of the points that the document covers.
2. Stamp Act, 1899:
The purpose of the stamp act 1899 is to have a legal framework that ensures the payment of the stamp service generates and collects revenue for the government on different legal agreements. The main points of the act are:
- Stamp Duties:
It clarifies the stamp duties that different documents require. These duties may vary depending on the nature of the document.
- Mandatory Stamping:
Stamp act specifies the documents that require mandatory stamping defined so by the law for them to be considered valid.
- Stamping process:
It clearly states the procedure for getting the buying stamp papers for the purpose of adding validity to the documents.
- Penalty for non compliance:
The stamp act clearly states the penalty in case of failure to stamp the documents. Penalty can be in the form of fines or there may be some legal consequences as well.
3. Registration Act, 1908
The Registration Act 1908 talks about the laws involving the registration of property documents including wills, transfer of property, leases , sales deeds and other similar documents.
Here is the summary of the information mentioned in the Registration Act 1908.
- The Purpose of Registration Act:
The document explains the purpose of the registration act as a legal mechanism in place to get the important documents registered for authenticity and protection against fraud. .
- Registration office:
The act defines that the designated offices and the personnel called registrars for the registration of property related documents.
- Mandatory registration:
The act lists the documents that require mandatory registration. Some of these documents are lease papers, mortgage and sales deeds.
- Preservation of records:
The act states that the registrars should maintain the record of the registered documents to ensure their preservation.
- Registration fee
The act also defines the registration fee for the registration of the document. However the fees vary as per the type and the value of the transaction.
4. Revenue Act (1967):
Land revenue act of Pakistan (1967) provides the legal framework for managing the land revenue as well as keeping the record of the revenue. Land revenue act1967 gives the provinces their own sets of laws through which they can govern and manage their own land revenues. It also defines the hierarchy of the land and revenue department of Pakistan.
The act also specifies the powers allotted to different officials working in the land revenue department. It provides guidelines to assess the land , to make boundaries or arbitrations where required.
The Bottom Line:
Navigating real estate legalities while buying and selling property is quite a complex process. That is why there are certain laws to ensure the smooth transaction of the property. These laws are a guideline , and by abiding by them property selling and buying can be quite dispute free.
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