Sale of Real Estate in Pakistan
Sale
of real estate in Pakistan normally takes place through a title
document known as a Sale Deed, except in certain cases e.g. purchase of
real estate in Defence Housing Authority (DHA) or in a housing society
where sale deed is not executed for transfer of title in real estate
and an allotment letter/transfer letter from the authority or the
society, as the case may be, is deemed to be the title document. Some
people, before execution of the sale deed, may opt to execute an
agreement to sell. However, such agreement to sell does not transfer
title to a property in favour of the vendee. It, nevertheless, does
create a right in favour of the vendee, in case the vendor refuses to
honour the terms and conditions of the agreement, to seek specific
enforcement of the agreement to sell. Title in an immovable property is
only deemed to transfer once such Sale Deed or title document has been
executed. A sale deed must be affixed with requisite stamp duty and it
must be registered with the relevant sub-registrar. After registration
of the Sale Deed with the sub-registrar it must be ensured that a
mutation of such sale is entered in the register of mutations kept and
maintained by the patwari.
Purchase of Real Estate in Pakistan
Before purchasing real estate in Pakistan, a complete and thorough
search in respect of title of the seller to the real estate must be
carried out. A general practice is to investigate title of the current
vendor and any previous owner(s) for the last 20 years. Original title
document in favour of the vendor must be obtained alongwith other
relevant documents including mutation in favour of the vendor, a fresh
copy of fard, aks shajra and NOC/NEC as the case may be.
If the vendor is selling the property in the capacity of an attorney of
the owner then it must be ensured that the power of attorney is affixed
with appropriate stamp duty and it has been duly registered with the
relevant sub-registrar. If possible, contact should be made with the
owner(s) of the property and authenticity of the power of attorney must
be confirmed. A holder of a forged and fabricated power of attorney may
not be able to transfer a valid title in an immovable property to a
third party.
Non-resident Pakistanis, overseas Pakistanis and foreigners may also
purchase immovable property in Pakistan. Their presence in Pakistan at
the time of execution of the title document is not necessary.
Lease/Renting out of Real Estate in Pakistan
Landlord's Point of View
Landlord must ensure that lease of an immovable property is executed in
writing. Lease of immovable property for a period of less than a year
does not require compulsory registration. However, lease of immovable
property for a period of more than a year must be registered.
If the tenant refuses to pay rent, or for any other reason as stated in
the lease agreement and allowed under the law, the landlord may
terminate the lease. If the tenant refuses to vacate the premises the
landlord may file an ejectment petition before the relevant rent
controller.
Tenant's Point of View
Tenant must ensure that he makes payment of the rent either through a
crossed cheque, or where payment is made through some other mode, then
a receipt must be obtained from the landlord. In case the landlord
unlawfully or unjustifiably attempts to evict the tenant, the tenant
may file a petition before rent controller in addition to availing
other legal remedies as advised by his counsel.
Gift of Real Estate in Pakistan
Gift of real estate in Pakistan must be made in writing. There is,
however, a qualification to this general rule in case of a
Mohammedan.
A Mohammedan may make an oral gift of an immovable property. Although
allowed under law, it is not recommended to make oral gifts of
immovable property because it may become difficult to prove an oral
gift. Where a gift deed is executed, it must be affixed with
appropriate stamp duty and it must be registered.
An oral gift, in case of a
Mohammedan, takes effect if all three of
these under mentioned conditions are satisfied:
- Declaration of gift;
- Acceptance of the gift by the donnee during the lifetime of the donor
- Transfer of possession of the subject matter of the gift by the donor to the donnee
Once all of the above-mentioned conditions are satisfied, then the fact of a gift is deemed to be established.
Mortgage of Real Estate in Pakistan
Legal Mortgage
A legal mortgage in respect of an immobile property may be created
after execution of a mortgage deed. A mortgage deed must be affixed
with appropriate stamp duty and it must be registered with the relevant
sub-registrar.
Equitable Mortgage
An equitable mortgage in respect of an immovable property may be
created simply by deposit of original title documents e.g. sale deed,
allotment letter, etc., with the mortgagor. It is not required to be
registered, however, a general practice is to get a lien marked in
respect of such mortgage.
Sindh – Renting Property
In Sindh the governing rentals
were amended in 1979, when the
Urban Rent Restriction Ordinance
1959 was replaced by Sindh
Rented Premises Ordinance 1979.
This was done in order to
regulate the relations between
landlords and tenants and to
protect their interests with
respect to rented premises in
the urban areas of the Province.
Under the Ordinance of 1979 a
written rental Agreement must be
drawn up and signed by the
landlord and the tenant. If the
Agreement is for 12 months or
more it must be registered under
the Registration Act 1908. A
Rent Controller is usually a
Civil Judge who has exclusive
Jurisdiction over the resolution
of disputes between the landlord
and the tenant. The Agreement
can also be attested by a Civil
Judge First Class Magistrate.
There is no prescribed format
under which the Agreement must
be drawn up unlike the Punjab
Rented Premises Act 2007 where
both parties must include
details regarding their
particulars a description of the
premises the period of tenancy
the rental value the rate of
enhancement the due date and
payment method of the rent and
the particulars of the bank
account of the landlord if the
rent is paid through a bank.
A certified copy of the
registered Agreement or the
original attested Deed is the
proof of the relationship
between the landlord and the
tenant should a dispute be
brought to the notice of the
Rent Controller. According to
the Ordinance the Rent
Controller may evict a tenant
from the premises on the
application of the landlord
if
the tenant has:
1. Defaulted on the rent.
2. Handed over the possession to
another person without the
landlords written
permission.
3. Used the premises for
purposes others than for which
it was rented in the first
place.
4. Violated a condition pf the
Agreement.
5. Undertaken an activity that has decreased the value of
the premises or is likely to
cause damage to it.
6. Been a nuisance to the neighbors.
7. The landlord requires the premises for use or occupation
for himself his spouse or
any of
his children.
8. The landlord requires the premises for reconstruction
purposes.