Here are some common legal terms related to real estate transactions that every home buyer and broker in India should know:

Freehold property

Owned outright by the buyer without any lease restrictions. Provides absolute rights and control over the property for perpetuity.

Leasehold property

Ownership granted by a lessor to the lessee for a limited fixed-term period like 99 years. Rights over the property revert to the lessor after the lease period.

Sale deed

The main conveyance document for transfer of ownership between the seller and buyer. It establishes the legal transfer of the property in exchange for consideration. Must be registered to complete the transaction.

Title deed

A legal document that establishes the ownership and rights over a property. Can be in the form of a sale deed, lease deed, inheritance deed, etc. Provides evidence of title or ownership.

Encumbrance certificate

Issued by local authorities to establish whether a property has any charges, liabilities or unpaid taxes due on it. An encumbrance-free certificate shows a clear title with no outstanding dues. Essential for any property purchase.

Registration

The process of recording the change of ownership and transfer rights in official records with the local registry or sub-registrar's office. Makes the new ownership legally valid and binding. Registration charges/stamp duty have to be paid by the buyer.

Stamp duty

A tax levied by the government on legal instruments like sale deeds, lease deeds, mortgages, etc. The stamp duty amount depends on the property value and location. Has to be paid before registration and executed documents can be stamped.

Capital gains tax

A tax paid by the seller on the profit earned from the sale of a property. Applicable only if the property is sold within 3 years of purchase. Tax rate depends on the period of holding. Can be avoided if a new property is purchased with sale proceeds.

Possession

The process of an owner physically occupying and using the property as desired. Possession is distinct from the sale and transfer of ownership rights. Late or non-possession can lead to legal action against the seller/developer.

Mutation of property

The change of ownership record in official municipal records. Ensures that new owners become liable to pay property taxes and can obtain a Khata certificate or document for change of name in records.

Power of attorney

A legal document giving the authority to a nominated representative to handle transactions related to the property on the owner's behalf. The level of authority can be general or specific. Registration charges apply for each POA executed.

Relinquishment deed

A document through which a co-owner surrenders their rights or share in a jointly held property in favor of other owners. Needs proper registration and stamping like a sale deed. Helps in transferring the property to sole ownership.