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Proposed administrative procedure - ID.04
Creating land/building ownership records
Purpose : To create a system to register transfer and mortages of plots/flats that would reduce ambiguity in deciding ownerships of plots/flats.

Pre-requiste readings : RLPP.

Contents

Problems with land/flats ownership records
Overview of proposed procedure ID.04
Insuring the land/flat transactions
Details of ID.04
Summary of ID.04
Advantages of ID.04
Draft of the act to create procedure ID.04

Problems with land/flats ownership records

Many of us think that so called Revenue Departments of State Governments keep some records about "ownership" of the land plots and flats. This is nothing but a pure misconception. Strictly speaking the records are "tax records" for land plots and NOT ownership records. The grim reality is that there is NO govt office in India which keeps information on land/flat ownership !!!

And the revenue records are also incomplete and inaccurate. eg in many case a plot/flat is sold to someone, and for several years, the records will have the name of the old owner. Sometimes, a person would have died years/decades ago, and yet the records will have his name on the plot. Why does such a mess happen?

Mainly becuase the local officer in-charge of revenue dept (Talaati or Mamlatdaar) is only required to ensure that land tax is collected timely, and it is NOT his job to ensure that the person whose name is on the record is alive, still the owner or if he was ever the actual owner. The local revenue officer does NOT have powers necessary to keep an accurate record of transfers and thus ownerships. The local revenue officer is not even authorized to conduct a search for "owner" as long as taxes are paid in the time. Also say a land is in the name of a person; he dies; his heirs do not get the name transferred, and keep paying the land tax; then even after decades, the (dead) person's name will stay on the record. The local office is neighter required nor empowered to carry our operations needed to keep the database up-to-date.

The existing laws do NOT require that buyer/seller must register the sale before/after the deal occurs within a ceriain number of days. Also, the local revenue officer ONLY registers the sale, and keeps record of duty collected, and he has NO powers to decide if the sale is valid or not. The officer also does NOT have powers to decide if the seller is the actual owner or not and if he is fully authorized to sell the land/flat. Worse, the officer also does NOT have powers to stop the deal even if he knows and has evidences to show that the seller is NOT the actual owner !!! And in most cases, the revenue office keeps only the following information about buyer/seller : name, father's name, address and approximate age. The revenue office does NOT even keep photograph or signature or tax-ID# or ration card number or driver licence number of buyers/sellers. So the revenue officer does not even have elementary means to verify if the seller is the same person who had bought the land/building before i.e. if he is the actual owner.

The matter is worse in case of flats. When a builder buys a plot and makes several flats on that plot, and sells them, the first sale is NOT to be registered at all in many states. So in many cases, while a plot may have say 100 flats, there is NO entry for even one of the flat in revenue records. And when that flat is sold for the second time to someone else, and when the transfer document comes for registration, the local revenue officer has NO way at all to know if the seller was the first buyer, as the first buyer's deal had never come for registration.

Since it is not necessary to register a sale within a time limit, it is perfectly possible for a land owner to sell the plot/flat several times to various buyers and dupe them. Also, if a plot/flat-owner has taken a loan against the plot/flat, it is NOT required for lender or borrower to register the loan at revenue office. It is still optional, and sometimes even organized lenders do not register their outstanding loans. Now if the owner sells the land, the lender can still put a claim on the land, and drag the new owner to the court who had not taken even a penny from the lender. Also, if the loan has been fully paid, it is NOT required for the lender to un-register the loan, there by creating confusion even in case of "clear" plots.

And there is quite a lot of confusion when a person expires, and has no clear will describing ownership of his land/flat. The heirs can file a suit against each other. But the courts in India, perticularly the civil courts in-charge of resolving such disputes are notoriously slow. It literally takes years and decades for courts to give verdicts. Meanwhile, the title of the plot/flat becomes defective.

What is further worse, is that no department has clear record of flats itself, forget the ownership. The Revenue Department (which comes under State Govt) have an accurate records of land plots, their locations, their borders and their area. eg a plot may have just 1 bungalow or have 12 flats or have 100 flats. It is quite often the case, that Revenue office will not have faintest data on how many flats a plot has !!! Also, municipalities sometimes only have records of construction plans, and DO NOT have records of how many flats/units a building has. It is also possible that builder would have shown 12 flats on the plan, and made 16 or even 24 flats and sold them, and municipality will have no record of them for several years. The ONLY good thing is that the Municipality will certainly come to know about it at the time of giving water/sewer connections, but that can be too late --- the builder may have sold this illegal flat by that time. Then later owner of 1 flat made two parts of his flat and sold it to two different persons, hence the plot now has 17 flats. It is possible that the Revenue office as well as Municipality, has no knowledge of it. And revenue office keeps almost no record of flats' areas and other details. Fortunately, the local Municipalities has fairly accurate record of flats, and their areas, but Municipalities DO NOT have any record of ownership (nor they are required to keep it). At best, they keep the record of occupier, and that too may be stale.

And a large number of Revenue records are lost, literally. It is hard to believe, but the Revenue Department has actually lost the records as sometimes papers are torn, brittle or got soaked in rain, or got burnt in some fire, or got washed away in some flood. And the duplicates were never kept, or the records were never updated back from the duplicates.

And worst of all, a large number of plots and flats are under litigation, and ownership CANNOT be decided unless and until case is over. And if the any of the party of challenges the verdict in a higher court, then it can take still more time.

Now a whole book can be written on how defunct our land/flat ownership record system is (compared to western countries) and tens of thousands of frauds it cuases every year. Now some 150-200 years ago, this confusion, uncertainity and resulting frauds were prevelent in almost ALL western countries. One of the first countries to solve this problem was Austrialia, which solved it by enacting the "Torrence System" in around 1860s. The Torrence System was highly successful in creating very less errorprone and thus very accurate land/building ownership records. And this drastically reduced frauds, uncertainity, ambiguity, litigations and confusion in the land/flat sales and leases, and thus improved liquidity of land/flat market and development of economy. Very soon, several countries took cue from Australia's Torrence System, and created similar such record keeping system. A noteworthy example is Germany, which revamped its land record system in year 1901, and since then confusion, uncertainity and frauds in real estate market have nearly disappeared in Germany.

Along with improving records, we also need to reduce stamp duty, which worsens the record keeping job. The current transfer tax (so called stamp duty) is some 10% - 12% of the market value of the land/flat (it varies from state to state ; in some states like Delhi, it is less, but still as high as 8% while in Gujarat it is 14%). IOW, if a person sells a flat worth Rs 1000,000/- in Gujarat, the buyer will have to pay a stamp duty of 14% i.e. whopping Rs 140,000/-. Such high stamp duty creates following problems in record keeping

It discourages buyers from registering the deal "as soon as possible" and so gives ample oppurtunity for seller to committ frauds.
Many buyers intend to hold the flat for a short term only. eg buyer may be speculator, or an investor or someone with transferable jon who intends to keep the flat only for say 3-5 years. Or the buyer could be a couple, who intend to keep the flat only for 3-4 years, till they have kid. Without going into detials of 100s of reasons, it is quite often the case, that buyer would try to "skip" the registration of sale. How is skipping done? Say a flat belongs to A, and B intends to "own" it for a short term. Then A will make sale-deed and sell the flat to B. But B wont register it, and when B finds some other buyer C, A and B will cancel the sale-deed, there by making A again a lawful owner, and then A will make a sale-deed selling the flat to C. Such "skipping" gives a lot of oppurtunity to act in a fraudulent ways for A as well as B. eg after selling the flat to B, A may suceed it in selling it again to someone else, as B had not registered the sale.
To avoid stamp duty, people often draft a document known as "irrevocable power of attorney". What is "irrevocable power of attorney"? Say A gives irrevocable PoA to B over his land/flat. Then B can become the lawful owner for all practical purposes. IOW, A can sell land/flat to B and B will NOT need to pay stamp duty of 10% to 14%. But PoA is not transferrable. So when B wants to sell the land to C, he would again need signature of A. If A resfuses to co-operate, and in case A has expired and if heirs of A refuse to co-operate, the property's title i.e. ownership becomes defective.

In addition, such high transfer tax reduces liquidity of real estate market, and reduce economic growth.

So although technically, maintaining accurate records of land/flat ownership has NOTHING to do with amount of stamp duty, it is indeed the case that if the stamp duty is high, a significantly large number of buyers may try to use every trick in the book to avoid the registration of sale, thereby making the ownerships defective and increasing chances of fraud. So IMO it is MUST to reduce stamp duty to improve ownership records.

Overview of proposed procedure ID.04 to maintain land/flat ownership records

There are 4 parts :

create a complete and accurate record of plots and flats, and ensure that it is always updated BEFORE a new flat is made and/or a plot/flat is divided/merged.
Creating an accurate (i.e. as accurate as possible) record of EXISTING land/building ownership (as of today, there is NO such record)
enacting a law that sales, loans, long rentals etc of flat/land will be void unless registered at the time of deal i.e. no delay, and enacting registration procedures which will make it impossible for owner to sell the land/flat twice.
Reduce stamp duty

Creating a complete and accurate record of plots and flats is a voluminous task, but still a task where disputes will be few, as municipalities' estate tax dept have fairly accurate record of flats, though it may not be up-to-date.

After that, to ensure that information stays up-to-date and accurate, we would need a law that would require that any change in plot/building would first require a registration (not permission, just registration) i.e. say if a builder plans to build say 10 flats on a plot, then first he needs to register the plan to create 10 flats, submit the property card of land and obtain one serial number and one property card for each of the flat. This would NOT require him to give details like floor plan, but some details to identify the flat uniquely (numbers, relative locations, directions, no of floors, no. of flats on each floor etc) should be made compulsory. This registration should be MUST before he can sell the flats. Likewise, if a person divides his flat/building into two or more parts, and plans to sell them independently, then he would first need to get the entry of his building/flat "dissolved", obtain two-more seperate serial numbers for each part, and only then he would be allowed to sell the units.

This registration is ONLY to keep track of "existence" of plots, sub-plots and flats, NOT to verify factors like safety, or consistency with town planning laws, zoning laws etc. So the officer in-charge needs ONLY limited powers.

Once a database of plots/flats is made, the officer-in-charge can start the gathering data on ownerships. The procedures I have proposed will enable the local officer-in-charge to create a database "as accurate as possible", but only in cases of plots/flats which are NOT under litigation.

Along with ownership, the local revenue office, as per the procedure ID.04 I have proposed, will keep information on individuals who own land/flat as well. Some pieces of information will be photograph (to be updated every 5 years), signatures, (to be updated every 5 years), finger print (to be updated every 10 years), tax-ID#, bank account number (optional) etc. Once the National ID System, the revenue office will NOT need to keep this information. But till then land record offices MUST keep owners' information to ensure that seller is indeed the owner.

Once a fairly accurate database of land ownership is created, maintaining it is easy --- the procedure ID.04 makes registration of ALL sales, transfers, loans and long rentals compulsory right at the time of sale/loan/rental , no delay. An unregistered sale, long term rental and loan would be considered as void, PERIOD. So the records will always "mirror" the reality.

In addition, it is would be necessary and productive to replace transfer tax with wealth tax i.e.

Reduce transfer tax to say 0.5%, from existing 8% to 14%
All houses, which are bought/sold or transferred by any means including inheritance (except inheritance to spouse) AFTER enacting ID.04, the owners will have to pay a wealth tax of say 1% to 1.5% per year of market value.

Insuring the land/flat transactions

This is the most important feature of Torrence System, and my proposal ID.04 (which is basically a procedure to enact Torrence System in India). ID.04 will enable the land records office to keep such an accurate record, that it would possible for State Govt to insure the land transaction as following

Say in revenue records a plot/land is registered in the name of A
Say A and B appear at revenue office, and the officer will have to certify that the person who claims himself as A is indeed A.
A sells land/flat to B, and the officer registers the deal
The office will charge B an insurance fee.
Later, it is found that
1. The entries in records were errorneous --- not A, but some other person say C was the actual owner OR
2. The person who had appeared at office was NOT A but some imposter, and actual A had never come to sell the land

In such case, GoI will compensate A, and B will can continue as lawful owner. The revenue office will later work woth police to track down the source of mistake and punish/fine the culprit to recover the loss.

Details of ID.04

The details of the proposed procedure ID.04 are as follows :

Setup of the personnel

The CM will appoint a Land Record Officer (LRO) for every district (as today). The citizens may replace the officer using RLPP. (What is RLPP? It is fast and inexpensive procedure by citizens can recall/replace an officer. For details, please click here.)
The Land Record Officer can use existing staff in District Collector's office (after permission from Collector), or recrcuit new staff using open written competitive exam. The citizens may expel a staff member after a Jury Trial.

Creating a record for each plot/flat
The LRO will create a Land Ownership Register for each town/ward in the district. In the register, LRO or his staff member, will create a record for each plot and each property owner. The LRO will give say a 5-10 digit serial number to the plot, and a 10 digit serial number to every property owner.
If a plot has multiple sub-plots or several independent flats, the LRO will mark the plot as COMPLEX, and create a seperate record for each subplot or flat (to some extent, this work is already done for sub-plots, but not for flats). A complex plot cannot have any owner, and cannot be sold/bought. The LRO will list the references of those sub-plots and flats on the record of that plot.
If a plot is NOT divided into sub-plots or a flat is single entity, then LRO will mark the record (and the property) as ATOMIC.
if owners of a plot wish to make sub-plots of his plot, he MUST first register each sub-plots with LRO. The LRO will ensure that there is NO claim against the plot, and ALL owners have agreed with the splitting scheme. He will then mark the plot as "complex" and "dissolved after split", and create records for each sub-plots, and make the owners of the plot as owners of sub-plot in the SAME proportion. The LRO may charge a small charge (say 0.1% of land value) as charge for sub-plotting.
Likewise, owners of several adjacent plots want to merge their plots into one bigger plot, the LRO will do so ONLY ALL smaller plots are owned by same owners in SAME proportion, and there is NO claim against ANY of the smaller plots. Then LRO will mark the records of smaller page as "dissolved after merge", create an entry for bigger plot, and put the plot number of bigger plot in the record of each smaller plots.
If a plot has several flats in it, the LRO will divide the plot into same number of "unbordered" sub-plots, as there are flats. He will keep area of unbordered sub-plots in proportion to
1. in proportion to flats' carpet area, as per the original construction plan OR
2. in proportion to number of shares each flat owner has in the co-operative society or non-trading corporation which owns the plot OR
3. as per agreement amongst flat owners.
The LRO will ensure that sum of unbordered sub-plots' areas is same plot's area. The LRO will also give a serial number to each unbordered sub-plot and will associate each unbordered sub-plot exactly with one flat.
The LRO will issue two numbers to each complex/atomic property : a serial number and one hirachial number. The hierachial number of land will be as will be as towncode.plot#.sub_plot#.___ , and that of flats will as towncode.plot#.sub_plot#.___.sub_sub_plot#.unbordered_plot#.flat#. The serial number will be a say 10 digit flat sequential number issued for that town.
Later LRO will also issue two "Geographical Serial Numbers" for each plot. The two numbers will be created as follows :
1. The LRO will decide a reference point for each town/ward, which can be the geographical center of the town/ward, called as the Town Reference Point.
2. For each plot, the LRO's staff will decide two Plot Reference Points, one at the centre of the plot and other at northmost point on the border of the plot.
3. The LRO's staff will measure the distances between Plot Reference Points and the Town Reference Point along East-West (X) direction and North-South (Y) direction.
4. The two pairs of distances will be the two Geographical Serial Numbers of the plot.
This will reduce the burden for potential buyer to locate/visualize the plot. This will reduce the frauds and also improve efficiency of selling and thus improve the liquidity of the land estate market.

Creating first (tentative) owneship record
Using existing land tax records and existing municipality property tax records, the LRO will create a TENTATIVE ownership record, which will NOT be assumed as correct, but taken as a stating point.
The LRO will keep the entire register, with serial numbers of each plot/flat and the first ownership data, on the internet, and also in his office for public view. The LRO will also publish a CD of the entire register every month.
The LRO will issue notices to the owners of the property, and all the owners who had had held that property in past 3 years or past 3 transfers, which ever is more, and every person/company which has registered a partial or total claim (claims are sometimes called as "weights" in revenue code) on that flat/plot, or the plot of which that flat/plot is part of, to re-register their claims.
If a complex property has a claim against it, the LRO will copy that claim on ALL the complex/atomic properties in that complex property. He will copy the whole claim, as well as put an amount which is divided pro-rate land area. (example : say a plot of area 1000 sqm has a claim of Rs 200,000/- against it and there are 4 sub-plots of 100 sqm, 200 sqm, 300sq and 400sqm each. Then LRO will freeze ALL sub-plots, and put a note of Rs 100,000 of claim on all sub-plots and a weight of Rs 20000, Rs 40000, Rs 60000 and Rs 80000 respectively against the sub-plots.)
Each person, who may or may not be on the existing revenue records, will register his claims, and the LRO will put the claims on the net within 7 days after he recieves.
At the end of six months period, the LRO will publish a final list of claims and disputes, and publish an intrim copy of the register, and also publish it on the net and CDs.
If a property has only one sole owner, and there is no claim against it or against ALL the complex properties in which it is enclosed, LRO will mark it as clear, and will give ownership (title) certificate, AFTER the sole-owner pays 10% of the value of the property as interest bearing gurantee. The LRO will return deposit to the owner or his nominee if no valid claims come over the property in next 10 years.
If a property has two or more owners, and there is no claim against it or against ALL the complex properties in which it is enclosed, then if the ALL the owners agree on the %-ownership of the property by appearing in person before LRO or his deputy, LRO will mark it as clear, and will give ownership (title) certificate, AFTER the EACH owners pays 10% of the value of the property in the ratio of their % ownerships as interest bearing gurantee. The LRO will return deposit to the owner or his nominee if no valid claims come over the property in next 10 years. The LRO will issue one certificate and the person who is approved by highest % of owners will get the custody of the certificate. And he will give a "co-owners'" copy to all the owners.
If a property has two or more owners, and they cannot decide the %-ownership amongst themselves, then the LRO will ask each party to declare the %-ownership he has in the plot. If the %-ownership adds upto 100 (or less), there is no dispute. If the %-ownership is more than 100, then LRO will call a Jury to decide the %-ownership of each party. The LRO will impose a fine on each party depending on difference betwen his claim and what Jury awarded, if the person's claim was higher. eg
1. say there are 5 claimaints on a property, A, B, C, D and E.
2. they declare a claim of 20%, 20%, 30%, 30% and 40% respectively, totalling 140%.
3. Say Jury decides ownership as 20%, 30%, 30%, 20% and 20%
4. In such case, A, B and C got rewards more or equal to their claims. So there is NO fine on them. But D and E had declared a share more than what an impartial Jury decided. So D and E will have to pay a fine in proportion to their over-claim, as decided by a second Jury.
  As a guideline, the second Jury can use following formula to decide the fine as 10% of market value * (ownership declared - ownership given)/100. So if an owner had asked for say 35% of the plot/flat, and he was awarded only 30% on a plot of 1000sqm with value as Rs 2000/sqm, then fine will be 10% * (10000 * 2000) * (40 - 35)/100 = 10/100 * (1000 * 2000) * 5/100 = Rs 10000
5. The owners must pay the fines within 1 year, or LRO will confiscate the their share in the land.
6. Only after all the fines have been collected, the LRO will issue the certificates.
All the ownership certificates will have an expiry period of say 3 years after the date of issue. At the end of expiry, if the property is NOT sold, the owners must return the certificate to LRO and obtain new certificates.

Creating a record for owner
The LRO will take name (as it appears in tax-ID or national/state/district ID), addresses, photograph, signatures, finger prints, tax-ID#, date of birth as on school leaving certificate or some other document, BOTH parents names and their tax-IDs (if they have) of the owners.
In case the owner is a company, he will take company's as well as directors' information. He will put some of the information, like name, address etc in the register on the net.
When National, State or District ID Systems arrive, LRO will NOT need to take this information to identify the owners. Till then, LRO may need this data to ensure that a person who has come owner of a plot/flat is the same person as is registered in the land/flat ownership records.

Registering the transfer --- "no registration - no deals"
A sale, or loan or rental for a period longer than 2 years will be void unless it was approved by LRO or his designated deputy, and posted on land register.
If a property owner is the sole owner and he wants to sell the property to someone else, he may do it by appearing in person or by sending an agent with power of attorney. The agent must be a registered solictor in the district, or a child/parent/sibbling/spouse of the seller and no-one else.
If one owner of the property owners want to sell his stake to an existing onwer, the persmission of other owners will NOT be required. The LRO can register the deal, and issue a new certificate. The LRO will summon the person who hold the certificate and co-owners' copies, take the old certificate and copies back, and provide them with the new certificate and copies.
If a land/flat owner is a co-owner, and he wants to sell his portion of his land/flat to someone other than an existing co-owner, the transaction will require permission of ALL the existing co-owners. They must appear in person, or via an agent.
The LRO will allow the owners to mark the property, at the time of purchase or later, as following
1. To be sold only when owner appears in person : in this case, NO agent can appear to sell the property. To remove this "lock", the person must appear in-person.
2. To be sold ONLY by a following agents : in this case, the owner will have to personally appear, and submit the name and other information of the agent who may operate on his behalf. The agent MUST be a registered solicitor in the District/State or son, daughter, parent, sibbling or spouse of the owner. The owner can take-off agents name anyday i.e. the power will ALWAYS be inherently revocable.
3. Payments must be by account payee checks : In this case, the seller MUST make payments by payee-AC cheques or else the LRO will NOT approve the deal.
4. Payments must be made by account payee checks in owner's bank account# XXXX at such and such bank : In this case, the seller MUST make payments by payee-AC cheques to the specified account, or else the LRO will NOT approve the deal.
5. Payments must be by account payee checks in bank account where tax-ID is XXXXX : In this case, the seller MUST make payments by payee-AC cheques to a bank account where account holder's tax-ID is registered, and it is same as the one stated in land records, or else the LRO will NOT approve the deal.
6. The payments must be equal to or more than at least 75% of the market price : In such case, the payment amount must be over 75% of market value or else LRO will NOT approve the deal.
The owner may or may not use any, all or none of the above markings. The above features protect the owner against possible frauds.
If a loan is to be taken against a plot/flat,
1. The lender and borrowers (owners) must register the loan to LRO BEFORE the loan money is taken, or else the loan will be considered void
2. If the plot is complex, i.e. already divided into independent sub-plots or a plot on which independent flats have been made, LRO will NOT allow the loan against such plots, and such loan will not amount to any claims on the plot.
3. The LRO will allow ONLY one lender to give loan against a plot/flat.
4. If the loan has been paid, the lender MUST release the claims within 3 months, or else LRO can summon a Jury to issue a fine on the lender.
5. The lender must re-register the pending amount on the plot/flat every year. Or else, LRO can initiate a search, summon the lender and also summon a Jury to decide a fine on the lender.
6. In case the lender cannot be tracked for more than 2 years, the LRO can assume that the loan has been repaid in full, and remove the claims
If there is a pending loan on the plot/flat, the LRO will transfer the plot/land ONLY if the lenders or their agent withdraws the loan at the time of the sale (basically seller will have to pay the loan to lenders and remaining amount to owner at the time of sale).

Changing the transfer tax rates
Transfer tax will be 0.5% of market value of land/flat
On all plots/flats, which are bought/sold or transferred by any means AFTER enacting ID.04, the owners will have to pay a property tax of say 1% per year of market value. There will NO such tax on plots/flats which were transferred BEFORE enacting ID.04.
The transfer tax will be 20% higher if there are more than one buyers, and property tax will be also 20% higher if there are more than one owners of a property

Specifying the nominees
Any buyer can specify 0, 1 or more nominees at the time of buying the property. He will need to provide names and relations with the nominees and other details at the time of buying the property. Within 30 days, he MUST also provide photographs, addresses and tax-ID# of the nominees.
The buyer may also provide %-share of each nominees (the shares MUST add up to 100).
If there is NO nominees, the transfer tax will be twice. And if there are over 5 nominees, then the transfer tax will be 50% higher. Same way, if there are no nominees, the property tax will be 20% higher, and if there are over 5 nominees, then property tax will be 20% higher.
If an owner dies, and there is ONLY one nominee, and he is alive, then the property will go to him after he pays the tranfer tax. If the nominee is person other than child, sibbling, parent or spouse, the LRO must put the tranfer request on notice for 14 days before transfer.
If an owner dies, and there is ONLY one nominee, and he is dead, the the property will go next kin of the owner, NOT the next of the kin of the nominee.
If an owner dies, and there are multiple nominees, and all of them are alive, the the property will go them in the %-share he specified. The LRO will issue the new certificate ONLY after each party pays transfer tax in proportion to their share on the property. The transfer tax will be 20% higher if there are more than 5 nominees.
If an owner dies, and there are more than one nominees, and one/more of them is alive, but one or or more are dead, then ownership will go to the listed nominees ONLY, NOT relatives of the nominees, in the proportion of of their shares.
In case there are no nominees, or nominees have expired, the LRO will post the information in bulletins, consudt a search for hiers, and the heir will get property. In such cases, the transfer tax will be twice. In case of disputes, the Jurors will decide the %-shares of the heirs.
In case, a person is a co-owner and NOT a sole-owner of the land/flat, he too can specify the nominees in the same way.

Unpaid taxes on land/flat
If the owners request an ownership certificate before paying the taxes due, the LRO can put a charge of 10%, and issue the certificates as "ownership clear, taxes not fully paid". The register will also show the amount of taxes unpaid. The certificate will be valid ONLY for 3 months, and will need to be re-issued after that.
In such case, the owner can sell the land, but the buyer must submit a written note to LRO that he is aware about unpaid taxes, with the amount of taxes unpaid, before he buys the property, and must pay the taxes at the time of buying the property and registering the transfer.

Keeping tracks of deaths
Each hospital/morgue in the country will be required to inform deaths with IDs of the dead persons to central office in New Delhi, which will send this information to each LRO.
If a land/flat is owned by a person, and the LRO gets information about the person's death, and nominees DO NOT appear within 30 days, the LRO MUST start a search for his nominees within 60 days. If the nominees DO NOT arrive within 3 years, the LRO may auction the property, and put the amount in the name of nominees.
If nominees appear after 30 days, but before auction, they can get the property transferred after paying transfer tax plus 10% on pending taxes (plus interests).
If a person is a nominee in any land/flat, and the LRO gets information of his death, the LRO must summon the owner of the land/flat and ask him to remove that person as nominee.
In case of a dispute, the LRO will call a Jury to decide. Insurance against bad sales
Say a person Y has purchased the land from X, and deal was approved the LRO. If later it is found that Z was the actual owner, NOT X, then LRO will pay the market value of the land to Z, and Y will be able to keep the plot/flat
The LRO with the help of police will conduct the criminal investigation to arrest X, fine/imprison him and recover the money.

Summary of ID.04

There are 100s of micro-issues and micro-solutions that come in land/flat transfer code, and issues like pending loans, deciding heirs etc. Some of them are already addressed in existing laws, some are not, and more and more issues keep coming as time goes.

The procedure ID.04 does NOT list ALL solutions to possible problems which may come. Much of the exceptional cases are to be resolved by courts (i.e. Jurors). What ID.04 provides in a nut shell is following :

Each owner is registered in District and/or State and/or National ID System. His name, addresses, other IDs (like passport#, driver's licence number), names/IDs of parents, DoB, picture, signature etc and some bio-details like retina scan, finger print etc are also known
Each plot/flat is uniquely and unambiguosly identified, and recorded in Town Land Register.
No sale, purchase, tranfer (by gift, inheritance), taking mortgage i.e. loans or ANY transaction involving that land/flat (except rental for less than 2 years) is valid unless it was registered at the time of making deal and was approved by LRO.
If a lawful owner loses ownership, the LRO will compensate him by paying prevailing market price, and will trace the culprit, and the Jury will decide a fine on him.

Advantages of ID.04

It would reduce frauds, confusion and ambiguity in real estate, and thus improve the liquidity of real estate market. This will improve the economy.

Draft of the act to create procedure ID.04

One law needs to be passed in the State Assembly to enact ID.04. To see the draft, of that law, please click here.

Now citizens can ask MLAs to pass this Act. But IMO, it will be wiser for citizens to first enact procedure LM.02, and then use LM.02 to pass this ID.04 draft WITHOUT any help from MLAs. To know about procedure LM.02, please click here .

If you have any other question, please mail it to MehtaRahulC@yahoo.com. Thousand thanks in advance.