The government has enforced new policy restrictions on realty transactions, barring people from selling land and houses on the day they bought it.

The new policy will also hit people aspiring to buy property with loans from banks and financial institutions (BFIs) by pledging the same as collateral, as it categorically bars them from pawning the property on the same day of gaining ownership.

“We circulated the new policy decision to all land revenue offices (LROs) across the country on Sunday,” said an official at the Ministry of Land Reforms and Management.

In the circular, the ministry has strictly instructed land revenue offices (LROs) not to register multiple ownership transfers of the same land plots and housing on the same day. It has also instructed LROs not to allow BFIs accept the property as collateral on the day of transaction.

“They can carry out both these activities on the next day of ownership transfer, but not on the same day,” said a source.

Officials at the ministry said the new decision was taken with an aim to check growing anomalies in realty deals and protect the aspirant buyers from falling into the trap of unscrupulous dealers.

“The new control measures have been adopted mainly taking into account recent rise in the number of property related cases at the court,” the source said.

While tagging the deals carried out in rush as risky, he argued that controlled transfer of property will relatively safeguard buyers from unscrupulous dealers.

The circular, however, categorically states that such restriction will not be applicable for cases related to the transfer and distribution of parental property among siblings. The ministry has also allowed ownership transfer of property as gift to spouses.

Likewise, MoLRM has also tightened registration of realty transactions after the closure of office hour.

“Post office hour transactions must be carried out only with the permission of the chief of the LRO. And the chief must take decision on it only after ensuring that the applications for transactions were filed before the end of office hour,” said the source.

The circular categorically bars registrations of transactions lodged after the office hour.

Sources said the restriction to this connection was prompted mainly by a recent case in Pokhara, wherein LRO there facilitated multiple transactions of land worth millions of rupees auctioned by the bank after office hours. The ministry had suspected anomalies in the deal.

source:republica(2010),"Govt bars multiple deals of property in a day ",republica, 14 September 2010