PROPERTY & REAL ESTATE IN PAKISTAN
Property ownership, titles, sale, purchase, leasing and other transactions relating to real estate in Pakistan are governed by different laws, most importantly the Transfer of Property Act 1882, Land Revenue Act 1967, Stamp Act 1899, and Registration Act 1908. There are also several provincial and municipal laws and regulations impacting property transactions in Pakistan. Most properties in Pakistan are sold or purchased through a Sale Deed (also commonly referred to as a ‘Registry’, or ‘Bay Nama’). A Sale Deed must be registered with the relevant office of the sub-registrar and it must be affixed with required stamp duty. Sale Deed is a written document which executes property transaction between buyer and seller. In addition to this, title transfer to the buyer should also be reflected in the relevant official record, for example with relevant revenue authorities (Patwari) in most cases; local office of the housing authority if the property is located within the jurisdiction of a housing authority (for example societies of Lahore Development Authority or Defense Housing Authority; or city district government in some cases.
In modern housing societies in Pakistan, there is no need to execute the Sale Deed and property transaction is recorded simply through a allotment letter which is final and conclusive proof that property is legally transferred from seller to the buy. This process is very quick and fraud proof in major societies.
Rented or Leased Properties
There are certain implications for landlords who rent out or lease their properties. A landlord must ensure that there is a properly drafted and executed lease agreement or rent agreement. Lease of a property for a period less than a year does not require registration. However, a lease of more than a year must be registered. If a tenant violates any provision of the lease/rent agreement, for example refuses to pay rent, does unauthorized modifications in the property, signs a further lease agreement with a third party etc. the landlord may terminate the lease. If the tenant refuses to vacate the property the landlord will have the right to file an ejectment petition in the court of local rent controller. Ejectment petitions are normally summary proceedings and they are concluded much faster than ordinary civil suits.
Tenants should always take necessary steps to ensure their rights are protected and they enjoy the rented property within the parameters of the lease/rent agreement. For example, tenants must make rent payment preferably through a crossed cheque, or in case payment is made through cash written receipt should be obtained from the landlord. In case the landlord unlawfully or unjustifiably attempts to remove the tenant from the property, the tenant may file a petition in the court of local rent controller.
Purchasing Property in Pakistan
Property purchase in Pakistan has never been a smooth and risk free process. Unfortunately, the land records system is decades old and there are several pitfalls and loopholes in the system exposing innocnet buyers to possible fraud and deception. Therefore, it is highly recommended that someone experienced in property matters should carefully and vigilantly check the property title of the seller before any transaction is executed or any advance payment is made. A careful buyer will normally check the ownership title of not only the current seller, but also those of previous owners for the last 20 to 30 years or more in order to avoid any counter title claims later on or any litigation. What type of documents a buyer should inspect before purchasing property depends upon the nature of the property, for example in case of most properties original Sale Deed often referred to as ‘Registry’, a fresh copy of previous title transfer document often known as a ‘Fard’, and ‘Aks Shajra’ (graphical image of the property identigying its location) should be carefully inspected. In case of commercial properties, NOCs (No Objection Certificates) from local authorities (if applicable), approval of commercialization, and other documents should also be inspected. It is a common mistake by innocent buyers to purchase commercial properties in Pakistan which are not actually allowed to be used as commercial premises and there are heavy penalties if commercial activity is done at those properties.
It is very common in Pakistan that property transactions are done through attorneys (commonly referred to as ‘Mukhtar-e-Aam’ or ‘Mukhtar-e-Khaas’), and this is the highly complicated, tricky and risky area of property transactions. In cases where property is offered for sale or lease through attorneys, the buyer should try to establish contact with the original owner of the property and verify the identity, powers and authorities of the attorney. Moreover, the document granting rights to the attorney (normally called a ‘Specific Power of Attorney’, a ‘General Power of Attorney’, or ‘Mukhtar Nama’) should be carefully examined and its authenticity should be verified by examining the record of relevant office of the sub-registrar. The location of the property should of course be physically examined by purchaser or a nominated representative to identify any discrepancies and misrepresentations.
FREQUENTLY ASKED QUESTIONS
What is Aks Shajra?
Aks Shajra is the graphical image of a specific piece of land or a specific Khasra from the map or plan of a village/estate. It is used to point out the exact location of land, with identification of adjoining or surrounding lands.
What is Fard, or Fard Malkiat?
Fard Malkiat is record of different kinds of titles and rights in property maintained by local government revenue authorities, most commonly Patwari.
What is Registry?
Registry is a written document signed between seller and buyer of a property, confirming the transfer of ownership and title of the property from seller to buyer. It is also called ‘Bay Nama’ or ‘Moahida Bay’.
What is Intiqal or Mutation?
Intiqal or Mutation is a written order by the relevant revenue officer showing change in the government record of titles, and confirming transfer of property title from seller to purchaser. It is the most authentic record of title transfer in case of most types of properties in Pakistan.
What is Iqrar Nama?
Iqrar Nama, or Agreement to Sell, is a written agreement between intended seller and buyer recording the terms and condition under which the property will eventually be transferred. Please note that this document itself is not enough for legal title transfer in favor of the buyer. It is just a promise to transfer by the seller. The seller can still refuse to transfer the property, in which case the buyer will have the right to enforce his rights through court.
What is Mukhtar Nama?
Mukhtar Nama, also called Power of Attorney, is a written document confirming the appointment of a person as legal attorney of the property owner to conduct certain transaction, for example sale or lease of the property.
What is Tattima Registry?
Tattima Registry means a supplementary or additional Sale Deed, adding to the contents of already signed Sale Deed.
What is Khasra?
Khasra is a piece of land with a specific and unique identification number in the record of relevant government authority.
What is Gardawri?
Gardawri is the act of maintaining the record of the person(s) cultivating and possessing a piece of land, mostly agricultural land.
If you would like to seek further legal advice relating to a matter involving real estate laws of Pakistan, or regarding sale, purchase or lease of a property in Pakistan, we will be happy to assist you. We are a real estate specialist firm with more than 15 years of experience dealing with property law matters. Please feel free to Contact Us for further assistance.
Please fill out and submit the form below for an immediate response.