NEW DELHI: Real estate transactions in the secondary market in Delhi could see a 30-40% drop over the next few months with the government banning sale of property through transfer of general power of attorney.
The state government has notified an October 2011 Supreme Court order with retrospective effect, which would impact hundreds of buyers who had bought properties since October last year through this route.
For them, it would mean going back to the sellers to get the correct and complete documentation and then get a fresh registration done.
Power of attorney is used in the city to sell properties that are leasehold in nature and properties that lack clarity of title. Builders who are redeveloping plots that will later be sold floor wise to other buyers also use it. In some cases, buyers who want to avoid paying stamp duty use the GPA route to buy properties.
“People who have bought properties between October and now will be stuck,” says Samarjit Singh, Managing Director of property broking firm IndiaHomes.Close to 30-40% of property transactions in Delhi happen through general power of attorney.
In some parts of the city, like Rohini, Patparganj, Dwarka and Mayur Vihar, which have a considerable number of corporative group housing societies that are typically leasehold, this figure could be even higher and would see a steeper fall in transactions.