Legal Advice on Buying Property in Pakistan for Overseas Pakistanis and Foreigners

Navigating through the complex and regionally diverse legal landscape of the real estate sector in Pakistan can be a daunting task, especially for overseas Pakistanis and foreigners. The intricacies involved necessitate a thorough understanding and adherence to the prevailing laws and regulations to ensure a smooth and legally secure transaction. At Josh and Mak International, we offer a spectrum of legal services tailored to address the myriad challenges and to assist in making informed decisions when considering property purchases or investments in Pakistan.

Legal Consultation: Our legal team is adept at interpreting the various laws and regulations governing the real estate sector in Pakistan. Engage with our seasoned professionals to gain clarity and insights on the legal framework applicable to your specific situation. Reach out to us at [email protected] for personalized legal consultation.

Regional Laws and Regulations: Pakistan’s real estate laws vary across different regions and provinces. We assist you in comprehending and complying with the distinct laws and regulations pertinent to the specific region where you intend to purchase or invest.

Title Verification: Ensuring a clear title to the property you aim to purchase is paramount. Our thorough title verification service helps ascertain the legal ownership of the property, safeguarding you from potential legal complications down the line.

Approval from Relevant Authorities: Navigating through the approvals, permissions, and NOCs (No Objection Certificates) required from relevant authorities is a meticulous task. We ensure that all necessary authorizations have been duly obtained for your chosen property or real estate project.

Tax Implications: Be abreast of the tax implications involved in property transactions. We provide a comprehensive understanding of taxes including capital gains tax, capital value tax, and other provincial or federal taxes that may apply to your transaction.

Development Authorities’ Regulations: Adherence to the stipulated rules and regulations of Development Authorities is crucial. We guide you through the regulatory compliance necessary for properties governed by such authorities.

Verification of Project Approvals: Investing in real estate projects requires a thorough verification of all necessary approvals and permissions from concerned authorities. Our meticulous verification service ensures your investment is on solid legal ground.

Contractual Agreements: Having clear, legally binding contractual agreements is fundamental. We assist in drafting, reviewing, and registering contractual agreements in accordance with Pakistani law, ensuring a legally secure transaction.

Awareness of Regulatory Changes: Staying updated on regulatory changes is crucial for safeguarding your investment. We provide timely updates on any amendments in real estate laws or proposed bills like the Real Estate Regulatory Authority Bill that may impact your investment.

Consumer Protection Rights: Empower yourself with knowledge of your rights as a consumer in the real estate sector. We provide guidance on consumer protection rights to ensure fair business practices.

Foreign Exchange Regulations: Understanding the foreign exchange regulations is crucial for international investors. We assist in ensuring compliance with these regulations, facilitating a seamless remittance of funds for property transactions.

Enforcement and Revision of Existing Laws: Our services extend to advising on the enforcement and revision of existing laws governing the real estate sector, which is vital for ensuring a compliant and secure investment.

Prolonged Litigation and Dispute Resolution: We understand the challenges posed by prolonged litigation and offer services aimed at efficient dispute resolution in real estate matters.

Inaccurate Land Records and Mutation System: Our thorough verification of land records and mutation systems helps prevent issues like multiple sales of the same property and over-pricing, ensuring a hassle-free transaction.

Unorganised Real Estate Agents: We help you navigate through the challenges posed by unregulated real estate agents, ensuring you do not fall prey to fraudulent practices.

Our practice and advice reflects underlying systemic issues within the real estate sector in Pakistan. Addressing these concerns requires a multifaceted approach including legal, regulatory, and institutional reforms. At Josh and Mak International, we are committed to providing comprehensive legal services that not only address these issues but also ensure a legally secure and informed real estate transaction or investment. Through our tailored legal services, we strive to provide a seamless and secure pathway for real estate ventures in Pakistan.

Update 4th of July 2024

Dear Non-Resident and Overseas Pakistanis,

The Finance Act 2024 introduces several significant changes that affect the purchasing of property in Pakistan. It is crucial to understand these changes to make informed investment decisions and comply with the new regulations. This memo outlines the key changes and their implications for non-resident and overseas Pakistanis.

1. Advance Tax on Purchase of Immovable Property

The Finance Act 2024 imposes an advance tax on the purchase of immovable property. The rates are determined based on the fair market value of the property:

• For properties with a fair market value not exceeding Rs. 50 million, the tax rate is 3%.
• For properties with a fair market value exceeding Rs. 50 million but not exceeding Rs. 100 million, the tax rate is 3.5%.
• For properties with a fair market value exceeding Rs. 100 million, the tax rate is 4%.

These advance tax rates are applicable at the time of purchase and must be factored into the total cost of acquiring property.

2. Advance Tax on Sale or Transfer of Immovable Property

The Act also stipulates the collection of advance tax on the sale or transfer of immovable property. The rates are as follows:

• For properties sold or transferred with a gross amount not exceeding Rs. 50 million, the tax rate is 3%.
• For amounts exceeding Rs. 50 million but not exceeding Rs. 100 million, the rate is 3.5%.
• For amounts exceeding Rs. 100 million, the rate is 4%.

Non-resident and overseas Pakistanis planning to sell or transfer property in Pakistan need to be aware of these advance tax rates.

3. Capital Gains Tax

The Finance Act 2024 specifies tax rates for capital gains on the disposal of immovable property, depending on the holding period:

• Properties held for less than one year are taxed at 15%.
• The tax rate decreases incrementally for longer holding periods, with properties held for over six years being exempt from capital gains tax.

This provision encourages longer-term investments and impacts short-term property transactions by increasing the tax burden on capital gains.

4. Compliance and Active Taxpayers’ List

The Act imposes higher tax rates for individuals not appearing on the Active Taxpayers’ List (ATL). Non-resident and overseas Pakistanis must ensure timely tax filings to be included on the ATL, thereby benefiting from lower tax rates and avoiding penalties.

5. Implications for Non-Compliance

Non-compliance with the new tax regulations results in higher tax rates and potential penalties. It is essential to comply with the tax filing requirements and other regulatory obligations to avoid increased tax liabilities.

6. Impact on Property Investment Strategies

Given the higher tax rates for short-term holdings and non-compliance, non-resident and overseas Pakistanis may need to adjust their property investment strategies:

• Consider holding properties for longer periods to benefit from reduced capital gains tax rates.
• Ensure compliance with tax regulations to be included on the ATL and benefit from lower tax rates.
• Plan property purchases and sales with the new advance tax rates in mind to manage overall investment costs effectively.

The Finance Act 2024 introduces changes that affect the purchasing and selling of property in Pakistan for non-resident and overseas Pakistanis. By understanding these changes and complying with the new regulations, you can make informed investment decisions and optimise your property transactions in Pakistan.

For personalised advice or further information, please do not hesitate to contact us at Josh and Mak International at [email protected]

Best regards,

Barrister Aemen
Josh and Mak International

Update 1st of July 2024 Impact of Finance Act 2024 on Property Sales and Purchase in Pakistan

What does the Finance Act 2024 say about taxation of property in general?

The Finance Act 2024 outlines several provisions regarding the taxation of property. The key aspects can be summarised as follows:

1. Advance Tax on Sale or Transfer of Immovable Property: According to the Finance Act 2024, the rate of tax to be collected under section 236C on the sale or transfer of immovable property is determined based on the gross amount of consideration received. The rates are structured as follows:
   • Where the gross amount does not exceed Rs. 50 million, the tax rate is 3%.
   • For amounts exceeding Rs. 50 million but not exceeding Rs. 100 million, the rate is 3.5%.
   • For amounts exceeding Rs. 100 million, the rate is 4% .
2. Advance Tax on Purchase of Immovable Property: The Finance Act also stipulates the collection of advance tax under section 236K on the purchase of immovable property. The rates are categorised based on the fair market value of the property:
   • If the fair market value does not exceed Rs. 50 million, the tax rate is 3%.
   • For values between Rs. 50 million and Rs. 100 million, the tax rate is 3.5%.
   • For values exceeding Rs. 100 million, the tax rate is 4% .
3. Capital Gains on Disposal of Immovable Property: The Act specifies tax rates based on the holding period of the property and the date of acquisition:
   • For properties acquired on or before 30th June 2024, the rates are:
     • 15% if the holding period does not exceed one year.
     • 12.5% if the holding period exceeds one year but does not exceed two years.
     • 10% if the holding period exceeds two years but does not exceed three years.
     • 7.5% if the holding period exceeds three years but does not exceed four years.
     • 5% if the holding period exceeds four years but does not exceed five years.
     • 2.5% if the holding period exceeds five years but does not exceed six years.
     • 0% if the holding period exceeds six years.
   • For properties acquired on or after 1st July 2024, the tax rates vary, with higher rates for individuals and associations not appearing on the Active Taxpayers’ List .
4. Specific Provisions for Non-active Taxpayers: The Act includes provisions that increase tax rates for individuals and entities not appearing on the Active Taxpayers’ List. For instance, if the tax return is not filed by the due date specified in section 118 or the extended date under section 119 or 214A, the tax rates are higher for these non-compliant taxpayers .
5. Tax on Builders and Developers: The Act imposes a tax on the taxable profit of persons deriving income from the construction and sale of residential, commercial, or other buildings, as well as the development and sale of plots. The taxable profit rates are:
   • 10% of gross receipts for construction activities.
   • 15% of gross receipts for development activities.
   • 12% of gross receipts for combined activities .
6. Rate of Taxation for Holding Periods: The Act differentiates the rate of tax based on the holding period of the property:
   • Properties held for less than a year are taxed at 15%.
   • Properties held for more extended periods have decreasing tax rates, incentivising longer-term holdings .

These provisions indicate a comprehensive framework aimed at ensuring effective taxation of property transactions and incentivising tax compliance among property owners and developers. The Act’s emphasis on differentiated tax rates based on holding periods and compliance status highlights its dual focus on revenue generation and regulatory compliance.

How will this affect foreign and overseas Pakistani investors trying to ‘flip’ property for a profit in Pakistan?

The provisions of the Finance Act 2024 regarding property taxation will significantly impact investors engaged in property flipping in Pakistan. Here are the key implications:

1. Increased Tax Burden:
   • The Finance Act introduces higher tax rates for short-term property holdings. Properties held for less than a year are taxed at 15%, and the rate decreases as the holding period increases. This will directly increase the tax burden on investors who typically hold properties for short durations to ‘flip’ them for a quick profit.
2. Deterrent for Short-term Investments:
   • The higher tax rates for properties held for shorter periods serve as a deterrent for short-term investments. Investors aiming to flip properties within a year will face significant tax liabilities, reducing the overall profitability of such transactions. The tax rates incentivise longer-term holdings, which may shift investor strategies towards holding properties for more extended periods to benefit from lower tax rates.
3. Impact on Profit Margins:
   • The advance tax on the sale or transfer of immovable property, which ranges from 3% to 4% depending on the transaction value, will also impact profit margins. Investors will need to account for this additional cost when calculating their potential returns, which may reduce the attractiveness of flipping properties as a high-return investment strategy.
4. Compliance and Penalty Considerations:
   • Investors who are not on the Active Taxpayers’ List will face even higher tax rates. This provision encourages compliance with tax regulations but also imposes additional costs on non-compliant investors. For property flippers, ensuring timely tax filings and compliance with tax regulations becomes crucial to avoid higher tax rates and penalties.
5. Market Dynamics:
   • The Act’s provisions may lead to a cooling effect on the property market, particularly in the segment dominated by short-term investors and speculators. Reduced profitability from flipping activities might lead to a decrease in speculative investments, potentially stabilising property prices and reducing market volatility.
6. Adjustment of Investment Strategies:
   • Investors might adjust their strategies to adapt to the new tax regime. This could include longer holding periods to benefit from lower tax rates or diversifying investments into other asset classes to mitigate the impact of increased property taxes. Additionally, there might be a shift towards more comprehensive planning to account for tax implications in investment decisions.
7. Incentives for Development and Compliance:
   • The tax on builders and developers, which ranges from 10% to 15% of gross receipts, will also affect those involved in property development for resale. Ensuring compliance with these tax provisions will be essential to manage costs effectively. This may encourage a more regulated and transparent property development market, benefiting long-term stability.

Overall, the Finance Act 2024’s provisions on property taxation are designed to promote longer-term investment horizons, enhance tax compliance, and stabilise the property market. While this poses challenges for property flippers, it encourages a more sustainable and regulated investment environment in the real estate sector.

Update 4th of June 2024

Dear Local and Overseas Pakistanis wishing to purchase property in Pakistan , 

We have gone through  17 years of case law (approximately 350 Reported cases) on property matters to bring you stellar legal advice based on lessons learned from reported cases.We hope you will find the  advice below useful as it comes with the relevant facts and citations so you know what situations to avoid when buying property in Pakistan.

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Due Diligence and Verification of Ownership: 2024 CLC 900: The case of Syed Muhammad Ghous underscores the significance of verifying the ownership and legal status of the property before entering into a sale agreement. The petitioner’s failure to check the legal status of the property and the parties involved led to a legal dispute. Buyers should always verify the ownership and ensure that all relevant parties are properly impleaded in any prior legal proceedings to avoid purchasing disputed property.

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Proof of Ownership and Compensation Claims: 2024 CLC 239: Asad Ali Khan’s case highlights the necessity of proving ownership when claiming compensation for acquired land. The failure to provide concrete evidence of ownership resulted in the dismissal of the compensation claim. Prospective buyers should ensure that all ownership documents are in order and properly registered to avoid similar issues.

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Benami Transactions: 2024 CLC 95: The case involving Habiba Mehmood Ali Khan illustrates the complexities of benami transactions. The burden of proving a benami transaction lies on the person alleging it. Buyers must ensure that the property is genuinely owned by the seller and that no benami transactions are involved. They should also secure all relevant title documents and verify the source of funds used in the purchase.

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Temporary Injunctions and Proof of Purchase: 2024 YLR 667: Muhammad Hussain’s case emphasises the importance of having clear and documented proof of purchase. The failure to provide evidence of the conditions of a transaction can lead to the denial of temporary injunctions. Buyers should ensure that all terms and conditions of the sale are clearly documented and agreed upon by both parties.

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Doctrine of Lis Pendens and Fraud Allegations: 2023 SCMR 2158: The case of Sheikh Muhammad Iftikhar Ahmad highlights the doctrine of lis pendens, where a property purchased during the pendency of a lawsuit is subject to the final outcome of the litigation. Buyers must check for any ongoing legal disputes involving the property and understand that any purchase made during such disputes may be contested and subject to the court’s final decision.

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Sale Transactions with Illiterate or Vulnerable Parties: 2023 PLD 628: The case of Pervaiz Akhtar against Mst. Farida Bibi underscores the need for additional scrutiny when dealing with illiterate or vulnerable parties. Transactions involving such parties must be handled with care, ensuring that they fully understand the terms and that all legal requirements are met to avoid allegations of fraud or misrepresentation.

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Burden of Proof in Sale Agreements: 2023 CLC 2098: Ghazi Khan’s case emphasises the importance of proper attestation and registration of sale agreements. The failure to produce all required witnesses and proper registration can lead to the dismissal of claims regarding the validity of the sale. Buyers should ensure that all sale agreements are properly executed, witnessed, and registered in accordance with the law.

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Doctrine of Pendente Lite and Equitable Principles: 2023 PLD 93: The case involving Syeda Nayyar Sultana demonstrates the principle of pendente lite, where any transfer of property during the pendency of a suit is subject to the outcome of the litigation. Buyers should be cautious about purchasing property that is subject to ongoing legal proceedings, as they will be bound by the final judgment, regardless of their good faith or lack of notice.

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Rights of Vendee from Co-sharer: 2023 PLD 503: Muhammad Yousaf’s case clarifies the rights of a vendee purchasing from a co-sharer in undivided joint property. The vendee steps into the shoes of the vendor with the same rights, but these rights are limited until a legal partition occurs. Buyers should understand the implications of purchasing undivided joint property and the necessity of eventual partition to secure their ownership rights.

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Bona Fide Purchaser for Valuable Consideration: 2023 YLR 1899: The case of Ghulam Muhammad against Hakim-ud-Din highlights the protection available to bona fide purchasers under Section 41 of the Transfer of Property Act, 1882. However, this protection is not available if the purchase is made during the pendency of litigation (lis pendens). Buyers must ensure they are purchasing property from a legitimate owner and that there are no ongoing disputes that could affect their title.

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Verification of Proprietary Rights: 2023 YLR 1261: The case underscores the importance of verifying proprietary rights before entering into a property purchase agreement. In this instance, the respondent failed to establish the fulfillment of policy conditions required for claiming proprietary rights. Buyers should ensure that the seller has fulfilled all legal conditions and that there is a clear basis for claiming proprietary rights.

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Preference of Prior Registered Sale Deeds: 2023 YLR 1033: This case highlights the legal principle that a prior registered sale deed takes precedence over a later one. Buyers must verify the registration dates of all previous sale deeds to ensure that there are no conflicting claims on the property. A later sale deed cannot supersede an earlier registered one unless the earlier deed is cancelled.

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Tenant’s Rights and Estoppel: 2023 CLC 2140: This case demonstrates the rule of estoppel and the principle “once a tenant, always a tenant.” If a tenant purchases a share from a co-owner during the subsistence of the tenancy, their status as a tenant does not change. Buyers should be aware that purchasing a property does not automatically terminate existing tenancies unless expressly agreed upon.

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Jurisdiction Over Evacuee Trust Property: 2023 CLC 2090: The case clarifies that the determination of Evacuee Trust property status by the Chairman Evacuee Trust Property Board is not challengeable in civil court. Buyers should ensure that the property is not classified as Evacuee Trust property, as disputes regarding such properties must be addressed through specific legal channels outlined in the Evacuee Trust Properties (Management and Disposal) Act, 1975.

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Proof of Bona Fide Purchase: 2023 MLD 1372: This case emphasizes the duty of a subsequent purchaser to establish that they acquired the property for due consideration, acted in good faith, and had no knowledge of prior sale agreements. Buyers should gather and retain all documentation proving the legitimacy of their purchase, including payment records and absence of prior claims.

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Reopening of Closed Transactions: 2023 MLD 11: This case indicates that commercial transactions, especially with government departments, should not be reopened arbitrarily. Buyers should ensure that their purchase transactions are final and properly documented to prevent future disputes or demands.

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Importance of Evidence and Witnesses in Property Disputes: 2023 CLC 138: The case highlights the necessity of presenting primary or certified evidence in property disputes. Buyers should ensure that all documentation is in order, and if relying on secondary evidence, they must comply with legal requirements to validate such evidence.

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Mutation and Transfer of Property: 2023 YLRN 27: This case underscores the importance of ensuring that mutations and property transfers are properly documented and attested by credible witnesses. Buyers should verify that all mutations are duly recorded and that the transaction has been validated by the relevant authorities.

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Proof of Ownership and Proper Documentation: 2023 YLR 1385: Mst. Irshad Bibi’s case highlights the importance of clear and convincing evidence when asserting ownership of property. The plaintiff’s inability to provide a convincing argument and proper documentation resulted in the refusal of interim injunction. Prospective buyers must ensure they have all necessary documentation and legal proof to establish ownership and title before proceeding with a purchase.

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Timeliness and Limitation: 2023 YLR 261: The case involving Kishanchand emphasizes the importance of filing suits within the prescribed limitation period. The plaintiffs’ failure to act promptly led to the dismissal of their suit for declaration and possession as time-barred. Buyers should be vigilant about any statutory limitation periods and act within the time frame to protect their legal rights.

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Principle of Lis Pendens and Bona Fide Purchasers: 2023 PLD 96: Ms. Gulnar’s case illustrates the principle of lis pendens, which prevents the transfer of property during ongoing litigation without the court’s consent. Buyers must check for any ongoing legal disputes involving the property and ensure compliance with court orders to avoid complications. Additionally, bona fide purchasers must conduct due diligence to ascertain the property’s legal status and ownership.

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Validity of Gift Deeds and Specific Performance: 2023 CLC 838: The case of Mst. Shahida Parveen demonstrates the challenges in proving a gift from husband to wife without proper documentation. The court requires substantial evidence to validate such claims. Buyers should ensure that any gifts or transfers are properly documented, registered, and supported by credible witnesses to avoid disputes.

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Acquiescence and Waiver of Rights: 2022 SCMR 877: The Intelligence Bureau Employees Cooperative Housing Society case underscores the consequences of inaction in claiming rights over property. The plaintiff’s prolonged inaction and acquiescence resulted in the dismissal of his suit. Buyers must assert their rights promptly and not delay taking legal action if they believe their property rights are infringed.

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Bona Fide Purchasers Without Notice: 2022 SCMR 2130: The case involving Zakia Begum highlights the protection available to bona fide purchasers who act in good faith and conduct due diligence. Buyers must ensure they conduct thorough investigations into the property’s title and ownership records before completing the transaction.

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Fraud and Misrepresentation: 2022 SCMR 284: The case of Bahar Shah stresses the importance of verifying the legitimacy of the transaction and the seller’s intentions. Buyers should be cautious of any dubious or hurried transactions and ensure that all agreements are transparent and properly documented.

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Compensation for Inheritance Shares: 2022 SCMR 2130 (second part): The court’s decision to compensate sisters deprived of their inheritance share by their brothers emphasizes the need for fair dealing in inheritance matters. Buyers should be aware of potential claims from heirs and ensure that all inheritance disputes are resolved before finalizing the purchase.

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Proof of Agreement and Payment: 2022 YLR 742: The case of Malik Muhammad Ameen emphasizes the necessity of proving the execution of sale agreements and payment. Buyers should retain all proof of payment and ensure that agreements are witnessed and documented to avoid disputes.

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Sales of Unpartitioned Shamilat Deh: 2022 MLD 563: The case involving Syed Gulistan highlights the complexities of purchasing unpartitioned communal property (Shamilat Deh). Buyers should avoid purchasing such property without ensuring that it has been properly partitioned and all co-owners have been consulted and consented to the transaction. This ensures that the sale is legally valid and enforceable.

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Burden of Proof in Property Transactions: 2022 CLC 1646: Pir Muhammad’s case emphasizes the burden of proof on the seller to establish the legitimacy of the property transaction. The lack of witnesses and proper documentation to prove the sale or gift (hiba) resulted in the dismissal of the defendants’ claim. Buyers should ensure that sellers provide credible evidence, including witnesses and documentation, to support the transaction.

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Doctrine of Lis Pendens: 2022 CLC 277: Muhammad Zaman’s case reinforces the doctrine of lis pendens, which binds purchasers to the outcome of ongoing litigation involving the property. Buyers must conduct thorough due diligence to ascertain whether the property is involved in any legal disputes. Purchasing property during ongoing litigation can result in the loss of rights if the court rules against the seller.

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Bona Fide Purchasers and Fraud: 2022 YLR 2151: Nadeem Sadiq’s case highlights the risks faced by bona fide purchasers who fail to verify the seller’s title to the property. Buyers should ensure that the seller has a clear and undisputed title to the property before completing the transaction. Any allegations of fraud or disputes over the seller’s ownership can render the sale invalid.

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Tenant-Landlord Relationships and Property Sales: 2022 YLR 675: Aqeela Abid’s case underscores the importance of distinguishing between tenancy agreements and property sales. Tenants cannot presume the revocation of tenancy merely based on an agreement to sell with a third party. Buyers should ensure that existing tenancies are properly terminated and that tenants are informed and agree to vacate the premises before completing the purchase.

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Validation of Transfers by Ostensible Owners: 2022 YLR 464: Rana Muhammad Saleem’s case highlights the responsibility of purchasers to validate the seller’s title, especially when dealing with properties managed by government bodies or under trust. Buyers should conduct a thorough investigation to verify the authenticity and legality of the seller’s title to avoid legal complications.

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Lis Pendens and Third-Party Rights: 2022 YLR 336 and 2022 YLR 46: These cases reiterate the doctrine of lis pendens, which protects the rights of parties involved in ongoing litigation. Buyers acquiring property during such litigation must be aware that their rights will be subject to the final court decision, even if they are not a party to the original lawsuit. It is crucial to investigate any pending litigation before purchasing property.

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Execution of Sale Deeds and Legal Validity: 2022 CLC 1925: Sardar Ali’s case demonstrates the importance of proper execution and validation of sale deeds. Courts may require evidence to resolve factual controversies, such as the legitimacy of sale agreements and power of attorney. Buyers should ensure that all transactions are legally executed, witnessed, and documented to withstand legal scrutiny.

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Acceptance and Execution of Agreements: 2022 CLC 1659: In Mst. Afifa Bibi alias Begum Afifa Momdoot’s case, the court upheld the validity of an agreement to sell based on partial payment of consideration and a duly signed receipt. Buyers must ensure that all agreements are well-documented and that partial payments are acknowledged through proper receipts to avoid disputes.

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Bona Fide Character of Subsequent Purchasers: 2022 MLD 939: Muhammad Rafiq’s case emphasizes that subsequent purchasers must prove their bona fide character by demonstrating they acquired the property for due consideration, acted in good faith, and had no knowledge of prior agreements. Buyers should conduct thorough inquiries with neighbors and other knowledgeable persons about the property’s status.

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Dealing with State Land: 2022 CLC 414: Malik Allah Ditta’s case illustrates the high level of scrutiny and caution required when dealing with state land. The court highlighted the importance of ensuring compliance with relevant laws and schemes when acquiring state property. Buyers should verify that the transaction complies with all legal requirements and that the property is not encumbered by unresolved claims or disputes.

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Effect of Pending Litigation on Property Transactions: 2022 CLC 349: The case involving Mian Imran Saeed highlights the doctrine of lis pendens, which binds subsequent purchasers to the outcome of ongoing litigation involving the property. Buyers should check for any ongoing legal disputes and understand that their rights will be subject to the final court decision if they purchase property during litigation.

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Transfer by Ostensible Owner and Evacuee Trust Property: 2022 CLC 178: Khan Bahadar’s case underscores the risks associated with purchasing property from an ostensible owner, particularly in the context of evacuee trust property. Buyers should conduct a diligent investigation into the seller’s title and be aware that any flaws in the vendor’s title will affect their rights.

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Mental Incapacity and Fraud: 2022 PLD 34: Farrukh Afzal Munif’s case demonstrates the legal complexities when property is transferred by individuals under alleged mental incapacity or fraud. Buyers should ensure that the seller is legally competent and that the transaction is free from any fraud or undue influence.

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Necessity of Involving All Relevant Parties: 2022 YLR 1017: Nandomal’s case emphasizes the importance of involving all necessary parties in legal proceedings related to property transactions. Failure to do so can result in the invalidation of claims. Buyers should ensure that all parties with a potential interest in the property are properly addressed in any legal documents or proceedings.

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Requirements for Specific Performance and Title Transfer: 2022 YLR 572: Sharif Ahmed Qureshi’s case highlights the necessity of obtaining all required approvals, such as a No Objection Certificate (NOC), for the transfer of title. Buyers should ensure that all regulatory requirements are met and that any necessary approvals are obtained to validate the property transaction.

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Verification of Seller’s Title and Property Records: 2022 MLD 2032: Fazal Hakim’s case underscores the importance of verifying the seller’s title and ensuring that all property records are accurate and authentic. Buyers should conduct a thorough title search and verify the authenticity of all documents to avoid fraudulent transactions.

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Fraud and Misrepresentation in Property Transactions: 2022 MLD 577: Abdul Zaheer’s case illustrates the need for concrete evidence to support claims of fraud and misrepresentation. Buyers should maintain thorough records and documentation to support their claims and ensure that any allegations of fraud are substantiated with credible evidence.

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Due Diligence and Ownership Verification: 2022 CLC 489: Muhammad Hashim’s case emphasizes the necessity of verifying ownership rights before entering into a property transaction. Buyers should ensure that the parties consenting to the sale have legitimate ownership rights over the property. Additionally, any compromise decree must be scrutinized for potential fraud.

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Impact of Pending Litigation (Lis Pendens): 2022 MLD 1459: Khalique Zaman Chaudhry’s case illustrates the principle of lis pendens, which binds purchasers to the outcome of ongoing litigation. Buyers should check if any litigation is pending involving the property and understand that any transaction made during such litigation will be subject to the final court decision.

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Bona Fide Purchaser Requirements: 2021 SCMR 1241: Muhammad Yousaf’s case provides a clear guideline on proving bona fide purchaser status. Buyers must show they acquired the property for valuable consideration, acted in good faith, and had no knowledge of any prior disputes or claims.

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Specific Performance and Sale Consideration: 2021 SCMR 1270: Muhammad Asif Awan’s case highlights that courts may require vendees to deposit the balance sale consideration during specific performance suits to demonstrate their bona fide intentions and financial capability.

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Protection Under Section 41 of the Transfer of Property Act: 2021 SCMR 1241: This case further explains that protection under Section 41 of the Transfer of Property Act requires proving that the purchase was completed, consideration paid, and possession taken before any lawsuit was filed. Buyers should complete transactions swiftly and document them thoroughly.

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Consequences of Non-Impleading Necessary Parties: 2022 YLR 1017: Nandomal’s case underscores the importance of including all necessary parties in legal proceedings. Failure to do so can invalidate claims. Buyers should ensure all interested parties are properly involved in any property-related litigation.

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Transactions Involving Evacuee Trust Property: 2022 CLC 178: Khan Bahadar’s case warns about the complexities of dealing with evacuee trust properties. Buyers should be particularly cautious and ensure thorough verification of the title and compliance with relevant laws to avoid future disputes.

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Forward Contracts in Real Estate: 2021 PLD 434: This case emphasizes the need for regulation in real estate transactions, especially forward contracts. Buyers should be cautious when dealing with pre-booked properties and ensure that all agreements are well-documented and legally binding.

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Proof of Consideration and Agreement: 2022 CLC 1659: Mst. Afifa Bibi’s case highlights the importance of having clear, documented evidence of agreements and payments made. Buyers should maintain detailed records of all transactions to support their claims in case of disputes.

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Verification of Seller’s Authority: 2022 MLD 2032: Fazal Hakim’s case underscores the need for buyers to verify the seller’s authority and title through official records before finalizing any property purchase to avoid fraudulent transactions.

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Implications of General Power of Attorney: 2022 CLC 1670: This case clarifies that a general power of attorney must explicitly authorize the sale or alienation of property. Buyers should ensure that the power of attorney contains clear and specific clauses regarding the authority to sell the property.

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Role of Revenue Records: 2021 SCMR 1182: This case illustrates that buyers should rely on updated and accurate revenue records to verify the status of the property and any existing claims or restrictions.

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Verify the Ostensible Owner: 2021 SCMR 686 (Inayatullah Khan v. Shabir Ahmad Khan): Ensure that the transferor is the ostensible owner and has the consent of the real owner. This can protect a bona fide purchaser under Section 41 of the Transfer of Property Act, 1882, provided the transaction was made in good faith, for consideration, and after taking reasonable care to ascertain the transferor’s authority to sell.

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Forfeiture of Earnest Money: 2021 SCMR 7 (Mst. Samina Riffat v. Rohail Asghar): When entering into an agreement to sell immovable property, it is crucial to adhere to the payment schedule for the balance consideration. Failure to do so can result in the forfeiture of the earnest money. Buyers should ensure they have the financial capacity and intention to complete the purchase within the stipulated timeframe.

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Fiduciary Duties and Conflict of Interest: 2021 CLD 863 (English Biscuits Manufacturers Pvt. Ltd. v. Associated Biscuits International Ltd.): In transactions involving company shares or properties, directors must exercise fiduciary duties bona fide and in the interest of the company and its members. Buyers should be cautious of conflicts of interest and ensure valuations and transactions are conducted transparently.

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Rights of the Highest Bidder in Court Auctions: 2021 CLD 39 (Muhammad Jawed v. First Women Bank Ltd.): In court auction proceedings, being declared the highest bidder does not automatically create vested rights. The bid must be accepted by the court, and the full purchase money must be deposited. Buyers should be prepared for potential legal challenges and ensure timely completion of all necessary steps.

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Knowledge of Prior Agreements: 2021 SCMR 1797 (Ahmed Din v. Muhammad Iqbal): Subsequent purchasers must investigate any prior agreements, especially if the original buyer is in possession of the property. Failure to do so may invalidate the subsequent transaction, as the purchaser is expected to have knowledge of existing agreements.

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Inheritance and Co-Sharers: 2021 CLC 106 (Dr. Aziz ur Rehman v. Noor Bibi): Buyers should be cautious when dealing with properties involving inheritance and co-sharers. Co-sharers cannot alienate property beyond their shares, and mutations are not proof of title. Buyers must ensure all legal heirs’ rights are addressed and properly documented.

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Pre-emption Rights: 2021 CLC 650 (Mian Latif Shah v. Munir Khan): When purchasing property, buyers should be aware of potential pre-emption rights. Any attempt to disguise a sale as a gift to defeat pre-emption rights can be challenged in court.

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Legal Status of Forward Contracts in Real Estate: 2021 PLD 434 (Mst. Jaiwanti Bai v. Amir Corporation): Real estate transactions often involve forward contracts, which may not be fully regulated. Buyers should ensure these contracts are properly documented and understand the risks associated with such arrangements.

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Litigation and Lis Pendens: 2022 MLD 1459 (Khalique Zaman Chaudhry v. Shabbir Anjum Mehdi): Transactions involving property under litigation are subject to the outcome of the litigation. Buyers should avoid purchasing properties with pending lawsuits to avoid legal entanglements and potential nullification of their purchase.

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Gift and Mutation Validity: 2021 CLC 106 (Dr. Aziz ur Rehman v. Noor Bibi): In cases of property transfer by gift, proper documentation and proof of the gift transaction are essential. Buyers should ensure that the gift is validly constituted and does not disinherit legal heirs unjustly.

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Execution and Compromise Decrees: 2022 CLC 489 (Muhammad Hashim v. Haji Abdul Ghafoor): Compromise decrees and execution applications must be scrutinized for validity and legitimacy. Buyers should ensure that any decree or execution application related to their property transaction is obtained legally and without fraud.

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Fraud and Forgery in Property Transactions: 2021 YLR 677 (Syed Arif Hussain Shah v. Sakina Bibi): Always verify the authenticity of the power of attorney. The case highlights that fraudulently obtained or forged power of attorney documents cannot confer legal ownership, and purchasers relying on such documents may lose their investment. Buyers should ensure that power of attorney is registered and executed in the relevant jurisdiction.

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Pre-emption Rights and Recording Evidence: 2021 YLR 315 (Sheikh Ishtiaq Ahmad v. Muhammad Usman Ali Sheikh): When pre-emption rights are claimed, all necessary legal procedures and formalities must be strictly followed, including the demand of Talb and verification of documents. Buyers should be aware that pre-emption suits can be complex and may require detailed evidence to establish the nature of the transaction.

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Criminal Proceedings and Benefit of Doubt: 2021 PCrLJ 1485 (Mian Muhammad Shahbaz Sharif v. NAB): Property buyers involved in transactions where the seller or related parties are under investigation for financial crimes should exercise caution. The absence of direct evidence linking an accused to property ownership or money laundering can influence bail decisions but underscores the importance of clear and legitimate transactions.

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Co-Sharers and Undivided Property: 2021 CLC 1394 (Ansar Iqbal v. Muhammad Ahsan Khan): When purchasing from a co-sharer of undivided property, the buyer only acquires the rights that the seller had. Buyers should ensure proper partition and clear documentation to avoid disputes with other co-sharers.

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Amendment of Pleadings and Addition of Parties: 2021 CLC 87 (Muhammad Saleem Naseem v. Additional District Judge, Dunyapur): Buyers should be prepared for potential legal challenges and the need to amend pleadings to reflect new developments. If the property is transferred during litigation, the buyer can be added as a party to the suit.

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Principle of Caveat Emptor: 2021 PLD 130 (Mohyuddin Mohammad Khan v. Chief Settlement Commissioner): Buyers must conduct thorough due diligence to verify the genuineness and legality of the title of the vendor. Any discovered deficiency in title will travel with the land, and the buyer cannot later claim protection under Section 41 of the Transfer of Property Act, 1882.

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Public Notice and Legal Formalities: 2021 YLR 886 (Mirza Shafaat Ali Baig v. Wg. Cdr. (Rtd.) Khurshid Anwar): After entering into a property agreement, buyers should invite public objections and send legal notices to complete all formalities. Failing to do so can jeopardize their right to specific performance.

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Demonstrating Readiness and Willingness: 2021 MLD 1368 (Akhlaq Hashmi v. Mst. Bakht Bibi): Buyers seeking specific performance must demonstrate continuous readiness and willingness to fulfill their contractual obligations. Failure to deposit the balance sale consideration or comply with court orders reflects unwillingness and can result in dismissal of the suit.

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Partition and Rights of Vendees: 2021 CLC 1399 (Nasir Mirza v. Syed Muzaffar Ejaz): Similar to previous advice on co-sharers, the rights of a vendee in undivided property are limited to the rights of the seller until a legal partition occurs. Buyers should ensure proper partition to solidify their ownership rights.

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Power of Attorney Limitations: 2021 CLC 1121 (Batul Hussain Dharamsey v. Hussain Dharamsey): Power of attorney, even if irrevocable, does not transfer ownership rights. Property transfers must be made through duly stamped and registered conveyance deeds. Buyers should not rely solely on power of attorney documents to establish ownership.

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Fraudulent Documents and Verification: 2021 YLRN 81 (Aziz Abdul Rahim Kassam Ali v. State): It is crucial to verify all documents thoroughly before purchasing property. Ensure that any CNIC, birth certificate, or other personal documentation used in property transactions is genuine and not forged. Buyers should be cautious of any modifications or attestations and should verify such actions from credible sources to avoid being implicated in criminal misconduct.

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Tax Notices and Communication: 2021 PTD 1710 (Raja Fida Hussain Hafeez v. Deputy Director-I, Estate Management Directorate-II, CDA): When receiving a tax notice, ensure that it is clear, detailed, and issued by a competent officer. Buyers should demand a clear breakdown of outstanding taxes or duties and verify payments made. Any unclear or defective notice can be legally challenged as it may lack jurisdiction and be declared void.

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Criminal Breach of Trust and Civil Disputes: 2021 YLR 370 (Muhammad Shafiq v. Muhammad Ijaz Abbasi): Distinguish between criminal breach of trust and civil disputes. Issues related to agreements to sell, where one party fails to perform, should be addressed through civil remedies under the Specific Relief Act, rather than initiating criminal proceedings. Payment of earnest money under a sale agreement does not constitute “entrustment” for the purposes of criminal breach of trust.

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Fraudulent Transfers and Third-party Purchases: 2021 PCrLJ 1738 (Ali Trust Pakistan v. CDA): Be cautious of purchasing property that may have been fraudulently transferred. Verify the property’s history and ensure no pending inquiries or restrictions by authorities like NAB. Any instructions from authorities regarding property status should be legally scrutinized, and appropriate legal channels should be pursued for clearances or permissions.

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Bona Fide Purchasers and Prior Contracts: 2021 MLD 1313 (Muhammad Imran v. Multan): When purchasing property, especially in the presence of prior agreements, buyers must establish that they are bona fide purchasers for value without notice of earlier contracts. The onus lies on the buyer to prove their bona fide status. The courts allow amendments in pleadings to address newly discovered facts regarding the property’s transfer.

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Specific Performance and Contingent Contracts: 2021 MLD 698 (Bashir Ahmed v. Muhammad Isa): Purchase Agreements to sell that lack specific details or are contingent upon future events cannot be enforced. Ensure that all agreements to sell contain specific, detailed descriptions of the property and meet all legal requirements. Contingent contracts are not enforceable until the contingent event occurs.

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Doctrine of Lis Pendens: 2021 PLD 236 (Ms. Sara Bibi v. Muhammad Saleem): The doctrine of lis pendens applies to property transfers made during ongoing litigation. Subsequent purchasers must be aware that any transfer made during the pendency of a suit is subservient to the outcome of that suit. The plea of being a bona fide purchaser without notice does not override the principle of lis pendens.

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Defective Notices and Legal Remedies: 2021 YLRN 156 (Raja Fida Hussain Hafeez v. Deputy Director-I, Estate Management, Islamabad): Buyers should scrutinize any tax or legal notices received regarding property transactions. Defective or unclear notices can be challenged in court. Buyers have the right to clear and detailed communication of any outstanding tax demands.

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Rejection of Plaints and Legal Grounds: 2021 YLR 1929 (Muzaffar Ali Khan v. Shehzad Khan): Ensure that all legal grounds for rejecting a plaint are clearly established before proceeding. In cases involving mortgages or gifts, ensure that all transactions are legal and within the bounds of the law. Disputes arising during the mortgage period must consider the legal restrictions on property transfer.

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Court Auctions and Bidding: 2020 SCMR 2134 (Muhammad Jawed v. First Women Bank Ltd.): When participating in court auctions for immovable property, understand that a bid is merely an offer and does not create any vested rights until accepted by the court. The highest bid must be confirmed by the court, and the full purchase money must be deposited. The judgment debtor retains the right to redeem the property by paying the decretal amount and compensation before the bid is confirmed. Buyers should be prepared for potential delays and complications in court procedures.

Leasing and Transfer Authority: 2020 SCMR 1499 (Naimatullah Khan v. Federation of Pakistan): Ensure that the leasing or transfer of property by a trust or organization is within their legal authority. For example, the Karachi Port Trust (KPT) did not have the authority to lease or sell land for residential purposes to its employees. Always verify that the entity transferring or leasing the property has the legal mandate to do so.

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Proof of Ownership and Benami Transactions: 2020 SCMR 1396 (Mst. Attia Bano v. Abdul Majeed): In cases of disputed ownership, especially involving remittances from abroad, maintain clear records of financial transactions and ensure that any arrangement regarding property purchase is documented. For instance, if the property is purchased using funds from a foreign national, clear evidence and documentation should establish the actual ownership and nature of the transaction to avoid disputes.

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Tax Obligations and Private Transfers: 2020 SCMR 146 and 2020 PTD 336 (Pak Gulf Construction Company (Pvt.) Ltd. v. Federation of Pakistan): When purchasing property from private real estate developers, be aware of the tax obligations such as Capital Value Tax (CVT). Even if the property is transferred privately without involving the Registrar of Documents, the responsibility to collect and pay CVT lies with the entity registering or attesting the transfer. Ensure that the developer or company adheres to tax collection regulations to avoid future legal issues.

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Setting Aside Auction Sales and Legal Procedures: 2020 YLR 2297 (Hafiz Abdul Salam v. Hassan Din): If challenging an auction sale of property in execution of a decree, it is crucial to act promptly and within the prescribed time limits. The sale can be set aside on grounds of irregularity or fraud if substantial injury can be proved. The application must comply with procedural requirements, including the deposit of a percentage of the sale amount or security.

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Inheritance and Co-ownership Rights: 2020 YLR 110 (Mian Din Muhammad v. Mst. Zaitoon): Inheritance rights must be protected, and any transactions exceeding the co-owner’s entitlement are void. Ensure that all legal heirs consent to property transactions, and any disputes over wills or gifts should be backed by solid evidence. Co-owners should be cautious about alienating more than their share in the property.

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Eviction and Property Ownership: 2020 PLD 94 (Pak Muhammad v. Mst. Rozeena Waseem): When purchasing property subject to tenancy or eviction proceedings, verify the title thoroughly and ensure that the seller has clear ownership. Pending civil suits can affect property rights, and it is essential to confirm the legitimacy of the seller’s title through legal proceedings if necessary.

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Principle of Lis Pendens and Subsequent Sales: 2020 YLR 461 (Pervaiz Ahmed v. Sultan Tipu Sarwar): The principle of lis pendens applies to property transactions made during ongoing litigation. Buyers should be aware that any property purchased during the pendency of a suit is subject to the final judgment of that suit. Subsequent purchasers are bound by the litigation’s outcome and cannot set up an independent case to defeat the settled claims.

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Application of Lis Pendens Principle: 2020 CLC 1835 (Mst. Alam Bibi v. KASB Bank): When purchasing property from an auction purchaser, be aware that if the auction is set aside during an appeal, the principle of lis pendens will apply. This means that any transaction conducted during the pendency of an appeal does not confer independent rights to the subsequent purchaser. Therefore, ensure the finality of the auction before proceeding with the purchase.

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Benami Transactions: 2020 MLD 1279 (Mst. Shaheena Bibi v. Shaukat Ali): Claims of benami transactions (where property is held in one person’s name but the real ownership belongs to another) require cogent and unimpeachable evidence. A plaintiff challenging such a transaction must provide strong proof to support the claim. Buyers should ensure the property is clearly titled in the seller’s name to avoid disputes later on.

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Rights of Bona Fide Purchasers: 2020 CLC 1145 (Muhammad Mohsin Yunas v. National Bank of Pakistan): If you purchase property that was mortgaged to a bank and not noted in the revenue records, you might still be considered a bona fide purchaser if you exercised reasonable care and due diligence. However, you should be prepared to substantiate your claim by leading evidence, especially if the bank seeks to auction the property.

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Validity of Evacuee Property Transactions: 2020 CLCN 23 (Ghulam Hurr v. District Collector Bhakkar): Transactions involving evacuee property require confirmation and registration to be legally valid. Unregistered deeds and transactions that do not meet statutory conditions are void and do not confer ownership rights. Ensure all legal formalities are completed when dealing with evacuee property.

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Compensation for Breach of Contract: 2020 CLC 1974 (Muhammad Saeed Akhtar v. Taha Mobeen Qureshi): In cases where a property developer breaches a contract, the court may grant specific performance with additional compensation. If specific performance becomes impractical due to third-party possession, the plaintiff may be awarded compensation for breach of contract and the escalation in property value. Buyers should negotiate clear terms regarding compensation for potential breaches.

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Title and Ownership Transfer: 2020 YLR 2166 (Faruqi House Building Corporation (Pvt.) Ltd. v. M. Sohail Shakil Faruqi): A sale agreement does not confer ownership rights until it is transformed into a sale deed. Buyers should ensure that the sale agreement includes clear terms regarding the transfer of ownership and that all statutory requirements are met to confer legal ownership.

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Proof of Benami Ownership: 2020 YLR 1494 (Mst. Parveen Raza Jadun v. Bashir Ahmed Chandio): Claims of benami ownership must be supported by convincing evidence. Legal heirs challenging a benami transaction must prove continuous possession and the use of their funds for the property’s purchase or construction. Ensure proper documentation and clear ownership records to avoid disputes.

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Principle of Caveat Emptor: 2020 CLC 1945 (Asad Jamal Daudpoto v. Assistant Commissioner Ratodero): The burden of proving the genuineness of property transfer lies with the purchaser. Mutation alone does not confer title, and transactions involving properties valued over a certain amount require registered instruments. Buyers should conduct thorough due diligence and obtain registered deeds to establish clear title.

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Equitable Relief and Constitutional Petitions: 2020 PLD 94 (Pak Muhammad v. Mst. Rozeena Waseem): Ensure you have a clear legal right and title before invoking constitutional jurisdiction. Equitable relief is discretionary and not available to parties who have demonstrated negligence or laches. Buyers should ensure they come to court with clean hands and complete all legal formalities to establish their rights.

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Verify Ownership and Documentation: 2020 CLC 1746 (Dr. Abdul Rashid Paracha v. Defence Housing Authority): It is crucial to verify the authenticity and validity of property documents before purchasing. In this case, the defendants produced valid conveyance deeds, leases, and other public documents that could not be contradicted by the plaintiff. Ensure that all property transactions are supported by registered instruments and official approvals.

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Preference in Inheritance Sales: 2020 CLC 179 (Ahmed Asif Siddiqui v. IIIrd ADJ East Karachi): In cases of partition and auction of inherited property, the offers from legal heirs should be given preference over third parties if they can match the highest bid. Ensure that if you are a legal heir, your intention to purchase should be clearly communicated and documented in the auction process.

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Clear Description of Property: 2020 YLRN 37 (Saeed Akhtar v. Mohammad Amin): Ensure that the sale deed contains a clear and specific description of the property, including its boundaries and neighboring properties. Ambiguous or insufficient descriptions can lead to disputes and challenges in identifying the property.

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Bona Fide Purchasers and Prior Agreements: 2020 CLC 2024 (Bakht Baidar v. Ghulam Nabi): As a bona fide purchaser, ensure that there are no prior agreements to sell or other encumbrances on the property. Courts may refuse specific performance if the defendant is a bona fide purchaser without knowledge of prior claims. Conduct thorough due diligence and seek legal assurances that the property is free from previous agreements.

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Tenant-Landlord Relationship and Agreements to Sell: 2020 YLR 2269 (Umer Tanveer Butt v. Muhammad Ibrahim): Tenants claiming ownership based on an agreement to sell must understand that such agreements do not create ownership rights until specific performance is decreed. Landlords should ensure that lease agreements are properly executed, witnessed, and registered to avoid disputes over tenancy.

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Lis Pendens Principle: 2019 YLR 1158 (Fawad Khan v. Sh. Asif Latif Sathi): Be aware that any property purchased during pending litigation is subject to the principle of lis pendens, meaning the purchaser cannot claim independent rights if the litigation affects the property. Ensure no ongoing litigation impacts the property you intend to purchase.

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Proof of Agreements and Ownership: 2019 MLD 1924 (Mukarram Khan v. Maab Zada): Beneficiaries of property agreements must establish the validity of the documents through witnesses and prove the contents of the deeds. Ensure all agreements are properly attested and that the executant has clear ownership rights to avoid challenges.

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General Power of Attorney and Registration Requirements: 2019 CLCN 4 (Mst. Firdos Nazia Ajmal v. Mst. Iqbal Begum): When dealing with property transactions involving a general power of attorney, ensure the document is registered, attested by witnesses, and validly executed. Unregistered or improperly executed documents may render the transaction void.

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Implementation of Pre-Emption Decrees: 2019 MLD 1876 (Nazar Hussain v. Member Board of Revenue, Punjab): Ensure timely implementation of decrees in pre-emption suits and understand that transactions made during pending suits are void. Revenue authorities are obligated to act on decrees without being affected by time limitations if the decree has attained finality.

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Fraud and Misrepresentation in Property Purchases: 2019 MLD 537 (Muhammad Iqbal v. Sajid Hussain Bhatti): If purchasing property during pending litigation, understand that any subsequent challenge based on fraud or misrepresentation must account for the fact that the purchaser has no standing to challenge the decree if the purchase was made during litigation. Ensure no litigation or disputes are pending before proceeding with the purchase.

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Caveat Emptor – Buyer’s Responsibility: 2019 MLD 201 (Punjab Cooperatives Board for Liquidation v. Dr. Nazir Saeed): Under Section 41 of the Transfer of Property Act, 1882, purchasers have an extraordinary responsibility to verify the genuineness, originality, and legality of the vendor’s title before purchasing land. This principle of “caveat emptor” (buyer beware) requires thorough investigation and due diligence to avoid any infirmities or deficiencies in the title that could affect the purchaser later on.

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Lis Pendens – Purchases During Pending Litigation: 2019 CLC 252 (Basharat Amjad Hussain v. Additional District Judge): The principle of “lis pendens” (pending suit) under Section 52 of the Transfer of Property Act, 1882, implies that any property purchased during the pendency of a lawsuit is subject to the outcome of that litigation. Purchasers should avoid buying properties involved in ongoing legal disputes as they cannot claim independent rights free from the litigation’s impact.

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Fraud and Misrepresentation: 2019 CLCN 36 (Rubina Habib v. Province of Punjab): When purchasing property, ensure that the allotment or title is not based on fraud, misrepresentation, or void documents. The courts will not protect purchasers under Section 41 of the Transfer of Property Act, 1882, if the original allotment was obtained through fraudulent means.

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Bona Fide Purchasers: 2019 CLD 632 (Mst. Farhat Fareed Sheikh v. NIB Bank Limited): Bona fide purchasers must demonstrate that they acquired the property for valuable consideration without notice of any prior agreements or disputes. Courts require proof of the bona fide nature of the purchase, including reasonable care in verifying the title and circumstances surrounding the transaction.

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Verification of Titles and Documents: 2019 CLCN 18 (Abdur Rashid v. Mst. Sultana Begum): Ensure that the titles and documents related to the property are verified and not based on fraudulent or fictitious claims. The burden of proof lies on the purchaser to establish the legitimacy of the transaction, especially when dealing with evacuee property or disputed titles.

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Compliance with Legal Procedures: 2019 YLR 2911 (Muhammad Panah Jokhio v. State): Follow all legal procedures and ensure that all required documents, such as sketches, site plans, and revenue records, are correctly executed and submitted. Failure to comply with legal requirements or reliance on fraudulent documents can lead to legal complications and the invalidation of the transaction.

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Due Diligence on Property Status: 2019 CLC 854 (Usman Ghani Muhammad Vohra v. Additional District Judge IV East Karachi): Before purchasing property, particularly in housing societies, verify the registration and transfer status of the property. Ensure that the property is registered in the name of the seller and that all procedural requirements of the housing society are fulfilled.

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Protection of Possession: 2019 YLR 498 (Qamaruddin v. Imdad Hussain): Possession of property through a valid agreement of sale, even if the title has not yet transferred, can provide protection under Section 53-A of the Transfer of Property Act, 1882. However, it is crucial to ensure that the agreement is properly executed and supported by evidence to defend against illegal dispossession claims.

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Investigating Vendor’s Authority: 2019 CLC 1925 (Mst. Naseem Zehra alias Shaheen v. Ghayaz Ahmed): When dealing with transactions involving agreements to sell, ensure that the vendor has the legal authority to transfer the property. Agreements with individuals who are not legally competent to sell the property are void, and such transactions cannot confer title to the purchaser.

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Ensure Clear Title and Genuineness of Documents: 2019 PCrLJN 33 (Riaz Ahmad Khan v. State): Always verify the authenticity of property documents. In this case, the petitioner was accused of obtaining a loan based on forged documents for a non-existing property. Ensure all property documents are genuine and the property exists to avoid legal complications.

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Caution with NAB-Restricted Properties: 2019 PCrLJ 997 (Mst. Ashi Munir v. National Accountability Bureau, Rawalpindi): If a property is under caution or restriction by the National Accountability Bureau (NAB), it is crucial to verify the status. The High Court ruled that restrictions must be legally valid and related to the accused, emphasizing the importance of checking NAB restrictions before purchase.

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Verify Possession and Prior Agreements: 2019 MLD 1630 (Mst. Parveen Akhtar v. Mian Salah-ud-Din): When purchasing property, ensure that the seller has clear possession and there are no prior agreements or claims. The court held that a subsequent purchaser should have inquired about the existing possession and agreements, highlighting the need for thorough due diligence.

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Understand the Limitation Period for Legal Actions: 2018 YLR 1244 (Muhammad Ayub v. Ali Zaffar): The limitation period for filing a suit for specific performance of an agreement to sell starts from the date of refusal to execute the deed, not the date of the agreement. Ensure timely action in case of disputes regarding agreements to sell.

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Bona Fide Purchasers and Reasonable Care: 2018 PLD 189 (Muhammad Hanif Abbasi v. Imran Khan Niazi): As a bona fide purchaser, you must take reasonable care to verify the seller’s title and the property’s status. Failure to conduct due diligence can result in the loss of legal protections typically afforded to bona fide purchasers.

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Dealing with Evacuee Properties: 2018 SCMR 705 (Younus Habib v. Imranur Rashid): When purchasing evacuee properties, ensure that the transaction is approved by the relevant authorities and that the seller has the legal right to transfer the property. Transactions involving evacuee properties often require additional scrutiny and adherence to specific legal provisions.

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Addressing Fraud and Misrepresentation: 2018 PLD 114 (Muhammad Hanif Abbasi v. Jahangir Khan Tareen): Claims of fraud and misrepresentation in property transactions must be substantiated with clear evidence. Courts require proof of fraudulent intent and the material impact of such fraud on the transaction.

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Doctrine of Lis Pendens: 2018 YLR 1543 (Muhammad v. Sheikh Taj Muhammad): Be cautious of purchasing property that is the subject of ongoing litigation. The doctrine of lis pendens dictates that any transaction during the pendency of a suit is subject to the outcome of that litigation, and such transactions may not be legally protected.

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Handling Disputes Over Succession and Ownership: 2018 CLC 1943 (Mst. Saeeda Begum v. Mst. Habib-u-Nisa): In cases of disputed succession or ownership, documentary evidence prevails over oral claims. Ensure that succession and ownership documents are in order and properly registered to avoid disputes.

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Protection Under the Transfer of Property Act: 2019 PCrLJN 33 (Riaz Ahmad Khan v. State): Understand the protections and obligations under the Transfer of Property Act, 1882, especially regarding bona fide purchasers and the principle of caveat emptor. Purchasers must exercise due diligence to verify the seller’s title and the property’s status.

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Due Diligence on Title and Ownership: 2018 YLR 1028 (Mst. Anwar Kalsoom v. Ghulam Raza): Ensure that the transferor (seller) has a valid title to the property and that all necessary steps (offer, acceptance, and delivery of possession) for a valid transfer, such as a gift, are fulfilled. It is crucial to verify that the transferor has indeed approached revenue officials and that the transaction is properly recorded and attested. Be cautious of dubious entries and fraudulent transactions, especially involving illiterate individuals.

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Scrutinizing Historical Transactions: 2018 YLR 829 (Mst. Bilqees Barkat v. Member, Board of Revenue): Be vigilant about the property’s history, especially if it involves evacuee property or land subject to historical claims and allotments. Verify that the original allottee had a legitimate claim and that any subsequent transactions were conducted lawfully. Fraudulent claims and transactions can render subsequent purchases invalid.

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Avoiding Transactions During Litigation: 2018 CLC 307 (Mukhtar Ahmad v. Province of Punjab): Avoid purchasing property that is subject to ongoing litigation. Transactions made during the pendency of a suit are risky and can be invalidated. The doctrine of lis pendens applies, meaning any transfer made during litigation does not affect the rights established in the pending suit.

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Verifying Property Identity and Seller’s Authority: 2018 MLD 151 (Nazeer Ahmed v. Ahmed Khan): Ensure that the property’s identity and the seller’s authority to sell are clearly established. Documents such as KHATOONI (ownership record) must be verified for legitimacy. The buyer must take reasonable care to investigate the title and ensure that the property is not being sold by someone who lacks the authority to do so.

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Dealing with Alleged Fraud and Misrepresentation: 2018 PCrLJN 193 (Naeem Malik v. State): Be wary of transactions where there are allegations of fraud or misrepresentation. Confirm the authenticity of documents and ensure the seller is the true owner. Cases involving allegations of forged documents and misrepresentation should be approached with heightened caution.

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Understanding the Concept of Bona Fide Purchasers: 2018 YLR 829 (Mst. Bilqees Barkat v. Member, Board of Revenue): The protection under Section 41 of the Transfer of Property Act, 1882 is available to bona fide purchasers who have taken reasonable care to verify the seller’s title. Buyers must conduct thorough investigations to ensure that they are not purchasing property from an unauthorized seller.

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Ensuring Proper Documentation and Legal Procedures: 2017 SCMR 1395 (Fancy Foundation v. Commissioner of Income Tax, Karachi): Maintain accurate and proper documentation for all property transactions. Ensure that all legal formalities, such as proper registration of deeds, are followed. This is crucial for asserting rights and defending against challenges.

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Understanding the Implications of Past Transactions: 2017 SCMR 1787 (Muhammad Moizuddin v. Mansoor Khalil): Be aware that past and closed transactions, especially those involving financial institutions and auctions, have specific protections. Understand the legal status of such transactions to avoid future disputes.

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Litigation and Costs of Improvements: 2017 YLRN 129 (Muhammad Razzaq v. Tassadaq Hussain Shah): When purchasing property involved in litigation, be aware that any improvements made during the pendency of a suit might not be compensated. The principle of lis pendens can apply, affecting the rights and interests in the property.

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Handling Evacuee Properties and Inherited Land: 2018 SCMR 468 (Nasir Fahimuddin v. Charles Philips Mills): For evacuee properties and inherited land, ensure that all previous transfers were legitimate and properly documented. Claims of ownership should be backed by solid documentary evidence, and any historical claims should be carefully reviewed.

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Impleadment of Bona Fide Purchasers in Ongoing Suits: 2017 SCMR 172 (Province of the Punjab v. Syed Ghazanfar Ali Shah): Bona fide purchasers who acquire property from an ostensible owner cannot be impleaded in suits between the original allottee and the government if the original allotment is invalid. This highlights the importance of verifying the legitimacy of the initial allotment to avoid legal complications.

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Errors in Revenue Records: 2017 SCMR 81 (Ghulam Rasool v. Noor Muhammad): Errors in revenue records that exclude the lawful owner’s name do not deprive the true owner of their title. Purchasers must ensure they are buying from the actual owner. Claims of bona fide purchase under Section 41 of the Transfer of Property Act, 1882, are invalid if the sale was made without the real owner’s consent, even if the error was due to unintentional or deliberate actions by revenue staff.

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Joint Ownership and Errors in Records: 2017 SCMR 81 (Ghulam Rasool v. Noor Muhammad): In cases of joint ownership, any sale by one co-owner without the consent of the other co-owner is unauthorized and void. Purchasers must ensure that all co-owners consent to the sale to be protected under the principle of bona fide purchaser.

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Essential Prerequisites for Bona Fide Purchasers: 2017 SCMR 81 (Ghulam Rasool v. Noor Muhammad): For the protection under Section 41 of the Transfer of Property Act, 1882, the following must be established: the transferor is the ostensible owner, the transfer is with the consent of the real owner, the transfer is for consideration, and the transferee has taken reasonable care before entering the transaction. These elements must co-exist.

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Transactions Deemed “Past and Closed”: 2017 CLD 1459 (Muhammad Moizuddin v. Mansoor Khalil): Transactions involving the sale of mortgaged property finalized before legal declarations of unconstitutionality are protected under the principle of “past and closed transactions.” Buyers in such scenarios should confirm that their purchase falls within these protected parameters to avoid future legal disputes.

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Handling of Property Acquired Through Corruption: 2017 PLD 665 (Razia Begum v. NAB): Properties acquired through corruption and held in the name of another person (benami property) can be scrutinized by accountability courts. Buyers must ensure the seller can legitimately demonstrate their financial capacity and legal ownership, particularly in cases where the seller’s income sources and property acquisition methods are questionable.

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Bids in Auctions and Judgment Debtors: 2017 CLD 1158 (Fayaz Ali v. Dr. Ahmad Khan Hoti): A bid in an auction is merely an offer and does not create a vested right until confirmed. Judgment debtors can satisfy the decree by paying the decretal amount, nullifying the auction bid. Buyers should be aware that their rights are not secured until the auction bid is confirmed.

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Lis Pendens and Purchases During Litigation: 2017 YLR 355 (Zamurad Khan v. Sabir Khan): Purchases made during the pendency of a suit are at risk under the doctrine of lis pendens, which means such transactions do not affect the rights established in the ongoing litigation. Buyers should avoid purchasing properties involved in ongoing lawsuits unless they have ensured the proper legal standing and received court approval.

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Inheritance Claims and Revenue Records: 2017 MLD 1180 (Mst. Soocha v. Mst. Khazuna Bibi): Inheritance rights are immediately vested upon the predecessor’s death. Revenue record entries cannot deprive rightful heirs of their shares. Purchasers must verify that sellers have clear, uncontested title to the property, especially when the property is inherited.

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Protection under Section 41 of the Transfer of Property Act, 1882: 2017 CLC 84 (Saifullah Khan Bangash v. Jaseem Khan): For a buyer to avail the protection provided under Section 41, the seller must be the ostensible owner. The buyer must exercise reasonable care in verifying the ownership. In this case, the seller was not the true owner, and the buyer failed to demonstrate reasonable care. Hence, the buyer could not claim protection under Section 41. Buyers should always verify the ownership status and ensure that the seller is either the true owner or has the authority to sell the property.

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Lis Pendens and Due Diligence: 2017 YLR 2173 (Asif Iqbal v. Aman Ullah): Transactions made during the pendency of a suit are subject to the doctrine of lis pendens, meaning the outcome of the litigation will affect the transaction. Buyers must conduct thorough due diligence and take precautionary measures, such as checking ongoing litigation involving the property. Simply inquiring from revenue officials may not be sufficient to establish a bona fide purchase.

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Jurisdiction and Proof in Redemption of Mortgaged Property: 2017 YLR 1662 (Allah Dad v. Muhammad): When dealing with properties previously mortgaged, plaintiffs must prove their claims of ownership and mortgage. Civil suits for redemption of mortgaged lands should be filed in the appropriate forum, such as the District Collector, and not in civil courts. Proper documentation and evidence of ownership and mortgage status are crucial.

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Compliance with Injunctive Orders: 2017 YLR 613 (Muhammad Mushtaq v. Mst. Nadira): Purchasing property in violation of an injunctive order can lead to the application of the principle of caveat emptor (buyer beware). Buyers should ensure there are no existing court orders prohibiting the sale of the property to avoid legal complications.

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Benami Transactions and Motive: 2017 YLR 224 (Muhammad Arif v. Haji Waheed-ul-Haq): In benami transactions, it is crucial to prove an express or implied agreement between the real owner and the ostensible owner. The motive behind such transactions, especially if it involves hiding assets or illegal gains, must be clear and legitimate. Buyers should avoid engaging in benami transactions to prevent legal issues.

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Proof of Possession and Agreement to Sell: 2017 CLCN 84 (Muhammad Yousaf v. Ghulam Murtaza): Buyers must provide convincing evidence of possession and the validity of the agreement to sell. In this case, the defendant successfully proved possession and an agreement to sell, while the plaintiffs failed to establish a landlord-tenant relationship. Buyers should ensure all agreements are properly documented and witnesses are available to testify if needed.

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Power of Attorney and Validity of Transactions: 2017 CLCN 44 (Muhammad Javed v. Arez Sher): A power of attorney must be valid and not revoked at the time of executing transactions. If the attorney had the power to sell or alienate the property, subsequent transactions are legitimate. Buyers should verify the status of the power of attorney before proceeding with any purchase.

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Fraudulent Transactions and Exchange Deeds: 2017 CLCN 28 (Muhammad Ejaz v. Allah Bakhsh): Exchange deeds executed fraudulently or without proper authorization can be voided. Buyers must ensure that the exchange or sale of property is conducted legally and transparently, with all necessary documentation and consent from involved parties.

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Proof of Agreements to Sell and Secondary Evidence: 2017 CLCN 5 (Aijaz Ahmad v. Muhammad Ashiq): Plaintiffs must provide convincing and primary evidence of agreements to sell, such as records from stamp vendors and petition writers. Reliance on secondary evidence or photocopies without permission can weaken the case. Buyers should ensure all agreements are documented and substantiated with primary evidence.

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Awareness of Existing Agreements: 2017 YLR 2459 (Mushtaq A. Patel v. Muhammad Islam): Buyers must ensure that the property they intend to purchase is not subject to any existing agreements. If a buyer knowingly enters into an agreement for a property that has already been sold to someone else, the second agreement can be invalidated. It is crucial to perform thorough due diligence and obtain written confirmation from the seller that there are no pending agreements or claims on the property.

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Proof of Funds and Ownership: 2017 CLC 1755 (Mujeebur Rehman Alvi v. Alvia Tabligh Trust): When purchasing a property, buyers must ensure that the seller has clear proof of funds and ownership. In cases where the funds for purchasing the property are not clearly documented or the seller does not have clear title, the transaction can be contested. Buyers should request and verify all necessary documents, including title deeds, tax receipts, and evidence of funds used for the purchase.

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Part Performance and Long Delays: 2017 MLD 1592 (Muhammad Saleem v. Saleem Ahmed Mirza): In claims of part performance under an agreement to sell, a significant delay in seeking specific performance can undermine the claim. Buyers should act promptly to enforce their rights under an agreement to sell, and any long delay without action may weaken their legal position. Documenting all transactions and steps taken to fulfill the contract is essential.

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Cancellation of Lease and Due Process: 2017 MLD 1094 (Muhammad Younus Ahmed Zai v. Executive Officer, Malir Cantonment): If a lease or property transfer is canceled, due process must be followed. This includes issuing show-cause notices and providing the affected party an opportunity to be heard. Buyers should ensure that any lease or property purchase is finalized with all legal formalities and that they receive proper documentation. If facing cancellation, buyers should be aware of their right to due process and challenge any arbitrary actions.

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Membership in Co-operative Housing Societies: 2017 CLC 1683 (Shabbir Alibhai v. Pakistan Employees’ Co-operative Housing Society): Membership rules in co-operative housing societies must be adhered to. Buyers should ensure they qualify for membership under the society’s bylaws before purchasing property within the society. If the society’s rules restrict membership based on occupation or other criteria, buyers who do not meet these criteria may not be granted membership, even if they acquire an interest in the property.

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Fraud and Misrepresentation in Property Transactions: 2017 CLCN 145 (Mst. Parveen Shoukat Widow of Late Shoukat Ali Bhojani): Transactions involving minors or those with improper consent can be voided. Buyers must ensure that all parties involved in the transaction have the legal capacity and proper consent to sell the property. If a transaction is found to involve fraud or misrepresentation, it can be challenged and potentially invalidated.

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Mortgage and Redemption of Property: 2016 GBLR 216 (Nazim v. Muhammad Musa): Mortgaged properties can be subject to redemption rights. Buyers must ensure that any mortgage on the property is cleared before completing the purchase. Failure to address existing mortgages can result in the original owner reclaiming the property upon payment of the mortgage debt.

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Due Diligence in Auction Purchases: 2016 SCMR 222 (Beach Luxury Hotels, Karachi v. Anas Muneer Ltd.): When purchasing property through an auction, buyers must ensure the legitimacy of the auction process and the seller’s entitlement to sell the property. Misrepresentation or fraud in obtaining the auctioned property can lead to legal challenges and potential cancellation of the purchase.

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Legal Consequences of Fraudulent Transfers: 2016 SCMR 92 (Anti-Corruption Establishment, Punjab v. National Accountability Bureau): Fraudulent transfers of property can result in severe legal consequences, including criminal investigations and the reversal of the transaction. Buyers should thoroughly investigate the history of the property and ensure that all previous transfers were conducted legally.

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Compliance with Land Lease Policies: 2016 YLR 1385 (Inayatullah v. Government of Balochistan): Compliance with land lease policies is essential. Buyers should be aware that leases or allotments do not automatically confer ownership rights and must comply with specific requirements. Any transfer of leased land must adhere to the terms set forth by the relevant land lease policy, and buyers must ensure that the lease or allotment is valid and transferable.

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Unregistered Sale Deeds and Tenant-at-Will: 2016 YLR 475 (Syed Shah Meeran v. Provincial Government of Khyber Pakhtunkhwa): An unregistered sale deed of state land does not create any title or legal rights. A ‘tenant-at-will’ has no right to sell the land. Buyers should avoid purchasing property from individuals who are merely tenants-at-will, as such transactions lack legal validity. Additionally, significant delays in instituting a suit can adversely affect claims for property rights.

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Additional Evidence in Appellate Courts: 2016 MLD 1267 (Nadeem Khan v. Noureen Sultan): When there are claims of fraud or misrepresentation regarding property transactions, it is crucial to produce all relevant evidence, including testimonies from revenue officers who attested to the transactions. If additional evidence is needed, appellate courts can allow its production. Buyers should ensure that all procedural requirements are met, and crucial witnesses are presented to validate the transaction.

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Sale by Ostensible Owners: 2016 MLD 605 (Muhammad Ayub v. Sher Abbas Khan): A purchaser from an ostensible owner who is in possession and appears to be the true owner may be protected if the purchase was made in good faith and with due care. However, the plaintiff must prove their claim with solid evidence. Buyers should ensure they purchase property from individuals who are clearly the rightful owners and should verify the chain of title to avoid legal disputes.

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Pre-emption Rights and Valid Sales: 2016 MLD 499 (Muhammad Jan v. Rustam Khan): Right of pre-emption arises only in the case of a valid sale. Transactions such as granting a special power of attorney for supervision do not qualify as sales. Buyers should be aware of pre-emption rights and ensure that the sale is properly documented and registered to avoid legal challenges from pre-emption claimants.

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Possession and Co-sharers’ Rights: 2016 CLC 1255 (Muhammad Sareer Khan v. Arbab Sultan Muhammad): Co-sharers in a property cannot dispossess each other by force. Proper legal procedures, such as filing a suit for partition, must be followed. Buyers purchasing a share in a co-owned property should ensure that the transaction respects the rights of all co-sharers and is conducted legally.

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Limitations and Minor’s Rights: 2016 CLCN 147 (Abdul Waheed Khan v. Mst. Ruqia Bibi): Transactions involving minors or their property are subject to strict scrutiny. Sales conducted without the minor’s consent or during their minority are void. Buyers should verify the age of the sellers and ensure that transactions involving minors have proper legal authorization and consent from a court-appointed guardian.

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Fraudulent Transactions and Inheritance Rights: 2016 CLCN 115 (Khan Wali v. Rozi Khan): Fraudulent transactions that deprive legal heirs of their inheritance rights are void, and the protection under S. 41 of the Transfer of Property Act does not apply. Buyers must conduct thorough due diligence, particularly in inheritance cases, to ensure that the transaction is legitimate and all heirs’ rights are respected.

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Auction Purchases and Valid Decrees: 2016 CLCN 70 (Faqir Jamil Masoom v. Allah Bakhsh): Buyers purchasing property through auctions must ensure that the auction was conducted legally and that the auctioned property was not subject to prior valid decrees or claims. Proper follow-up on the execution of decrees is necessary to secure ownership.

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Burden of Proof and Evidence: 2016 CLCN 31 (Muhammad Yousaf v. Ajab Noor): The burden of proof lies on the party asserting a fact. Buyers must ensure they have adequate documentary evidence to support their claims and should be prepared to testify and provide witnesses to validate the transaction. Avoid relying solely on oral evidence.

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Benami Transactions: 2016 PLD 383 (Abdul Majeed v. Abdul Rasheed): Proving a benami transaction requires showing the motive and financial contribution of the person asserting the benami claim. Buyers should avoid transactions that appear benami and ensure that all property documents are in the name of the actual purchaser, with clear evidence of the source of funds.

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Bona Fide Purchasers and Revocation of Attorney: 2016 YLR 175 (Muhammad Iqbal v. Mehmood Hassan): A purchaser who claims to be bona fide must ensure that the seller has the legal right to sell the property. If the power of attorney authorising the sale has been revoked, the transaction is invalid. The failure to cross-examine a fact can be taken as an admission of that fact. Buyers should verify the validity of the power of attorney and ensure no revocation has occurred.

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Pre-emption Rights and Nature of Transactions: 2016 CLCN 113 (Nazir Ahmed v. Muhammad Jamil): When claiming pre-emption rights, it is essential to prove the transaction is indeed a sale and not an exchange. The period for making Talb-i-Ishhad starts from the date of knowledge of the transaction. Buyers should ensure they understand the nature of the transaction and meet all legal requirements to avoid challenges based on pre-emption rights.

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Surety and Novation of Contract: 2016 CLD 1938 (National Bank of Pakistan v. Raja Traders): When a business is transferred and rescheduled finance agreements are made, the original guarantors remain liable unless explicitly discharged. Buyers should ensure that any transfer of business or liabilities is clearly documented, and all parties are aware of their ongoing obligations.

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Guarantor’s Liability and Rescheduling of Finance: 2016 CLD 618 (Bank Alfalah Limited v. Syed Zulfiqar Ali Rizvi): Guarantors remain liable for the debt unless discharged in writing. Rescheduling or restructuring of finance does not necessarily discharge the guarantor’s obligations. Buyers should ensure they fully understand the terms and conditions of any financial agreements they enter into, including the implications of rescheduling.

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Inheritance and Power of Attorney: 2016 perty as benami (held in the name of another for the benefit of someone else) can complicate transactions. Buyers should verify the legal status of the property and the authority of any agents or attorneys involved in the sale.

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Protection of Property Rights and Pending Litigation: 2016 CLC 367 (Syed Dost Ali v. Federation of Pakistan): Pending litigation can affect property transactions. Authorities may refuse to process applications related to property with pending legal disputes. Buyers should ensure there are no pending litigations or legal issues affecting the property before proceeding with the purchase.

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Fraudulent Transactions and Defective Titles: 2016 CLCN 22 (Shamshair Ali v. Mukhtiarkar (Revenue) and City Survey Officer): A defective title or fraudulent transaction can invalidate a purchase. Buyers must ensure the seller has a legitimate and clear title to the property. Even a bona fide purchaser cannot acquire a better title than what the seller holds.

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Lis Pendens and Subsequent Purchasers: 2016 PLD 19 (Abid Khan v. Gul Zaman Khan Abbasi): The principle of lis pendens (pending litigation) affects subsequent transactions. A subsequent purchaser must prove they acted in good faith without knowledge of the prior dispute. Buyers should be cautious of purchasing property that is the subject of ongoing litigation and verify all claims against the property.

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Superior Right of Pre-emption and Ownership: 2015 SCMR 874 (Muhammad Maqbool v. Ch. Nazir Ahmed): A superior right of pre-emption requires full title ownership. Plaintiffs must prove full title to claim superior pre-emption rights. Buyers should ensure they are purchasing from the rightful owner with clear and absolute title to avoid pre-emption claims.

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Bona Fide Purchasers and Power of Attorney: 2015 SCMR 452 (Noor Hassan v. Ali Sher): A purchaser should verify the authenticity of a power of attorney before proceeding with the purchase. In this case, the court highlighted the importance of producing all witnesses to prove the validity of the power of attorney. Purchasers must conduct thorough due diligence to ensure that the seller has the legal authority to sell the property and that the power of attorney has not been revoked.

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Documentary Evidence and Fraudulent Transactions: 2015 PLD 212 (Dr. Muhammad Javaid Shafi v. Syed Rashid Arshad): Documentary evidence, such as power of attorney and sale deeds, must be thoroughly examined and proved. Failure to do so can render the transaction invalid. Buyers should ensure that all necessary documents are verified and authenticated, and they should be wary of transactions that involve potentially fraudulent or forged documents.

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Compensation for Defective Auctioned Properties: 2015 PLD 166 (Member Board of Revenue/Chief Settlement Commissioner, Punjab v. Abdul Majeed): When dealing with auctioned properties, buyers should be aware that defects in the auctioned property may prevent its transfer. The court ruled that the authorities were not obligated to provide alternate land as compensation. Buyers should ensure the auctioned property is free from defects and that they have legal recourse in case of any issues.

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Liabilities and Encumbrances: 2015 MLD 1468 (Rukhsana Hidayatullah v. Syed Bahauddin): Buyers must be aware of all encumbrances and liabilities attached to the property. The seller is obligated to disclose any such issues, and the buyer must decide whether to proceed with the purchase knowing these liabilities. The new owner assumes responsibility for these encumbrances upon purchase.

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Part Performance and Unregistered Agreements: 2015 PLD 143 (Muhammad Siddique Sherani v. Shahjahan): Possession under an unregistered agreement, coupled with part performance, can be protected under Section 53-A of the Transfer of Property Act, 1882. Buyers should ensure that their possessions and any construction on the property are documented and acknowledged by the seller to safeguard their interests.

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Defective Titles and Mutations: 2015 YLR 2690 (Muhammad Khabir v. Hussain Ali): Buyers should verify the title of the seller. If the seller has a defective title, the buyer cannot acquire a better title. Proper documentation and proof of ownership are crucial to ensure a valid transaction.

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Burden of Proof and Revenue Records: 2015 YLR 1751 (Shah Qasim v. Arshan Bibi): The burden of proof lies on the party claiming ownership through mutation. Revenue records alone do not confer title; they must be supported by credible evidence. Buyers should ensure that the seller’s title is clear and corroborated by reliable documentation.

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Power of Attorney and Vulnerable Grantors: 2015 YLR 435 (Mst. Asia Khatoon v. Khan Shareen): When dealing with vulnerable grantors (e.g., those who are blind or deaf), it is essential to ensure that the power of attorney is executed with their full understanding and consent. Courts are likely to scrutinize such transactions closely to prevent fraud and exploitation.

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Improvements in Pleadings and Evidence: 2015 MLD 480 (Shah Miran v. M. Taufiq Khan): Improvements or changes in the pleadings during the trial are not permissible. Buyers should present a consistent and coherent case supported by solid evidence. Deviations from the original claims can weaken their position.

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Lis Pendens and Subsequent Purchasers: 2015 MLD 456 (Alam Khan v. Shah Nawaz): The principle of lis pendens applies to property transactions, meaning that any sale made during the pendency of a suit is subject to the outcome of that suit. Buyers should be cautious of purchasing properties that are the subject of ongoing litigation, as subsequent sales may not be protected.

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Sale of Mortgaged Property: 2015 CLC 765 (Muhammad Saleem Gul v. Mst. Sakeena): Buyers should be aware that purchasing mortgaged property is permissible, but the mortgage remains a charge over the property. The buyer steps into the shoes of the mortgagor and cannot acquire a better title than the one held by the mortgagor at the time of sale. The buyer is responsible for redeeming the mortgage to gain clear title.

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Oral Sales and Proof of Sale: 2015 YLR 1800 (Rasool Bakhsh v. Muhammad Yaqoob): Oral sales of immovable property require substantial proof, including the offer, acceptance, payment of consideration, and delivery of possession. The burden of proof lies with the party claiming the sale. Purchasers should ensure that all transactions are documented and corroborated by reliable evidence to avoid disputes.

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Interpleader Suits: 2015 CLC 934 (WAPDA First Sukuk Company v. National Fertilizer Corporation of Pakistan (Pvt.) Ltd.): When there is a dispute over the rightful ownership of property or financial instruments, an interpleader suit can be filed to determine to whom payment or delivery should be made. Purchasers should be prepared for potential legal proceedings to resolve such disputes.

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Restitution of Pre-Decree Position: 2015 CLD 1351 (Habib Bank Limited v. National Fibers Limited): Restitution under Section 144 of the Civil Procedure Code applies to court actions, not to agreements or compromises made by parties. Buyers should understand the limitations of restitution and ensure they seek appropriate legal remedies in case of disputes.

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Doctrine of Lis Pendens: 2015 YLR 1886 (Muhammad Zahid Aslam v. Haji Dilbagh): The doctrine of lis pendens means that any property purchased during the pendency of litigation is subject to the outcome of the suit. Buyers must conduct thorough due diligence to check for ongoing litigation involving the property to avoid future complications.

Proof of Title and Revenue Records: 2015 YLR 1751 (Shah Qasim v. Arshan Bibi): Revenue records alone do not confer title. The party claiming ownership must provide convincing evidence of the transaction. Purchasers should ensure that the seller has a clear title supported by reliable documentation before completing the transaction.

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Gift-Deed as a Sale: 2015 YLR 675 (Muhammad Iqbal v. Muhammad Irfan): Courts can declare a transaction purported as a gift to be a sale if it is meant to defeat the right of prior purchase. Buyers should be cautious of transactions disguised as gifts and ensure the true intention is documented and clear.

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Fraudulent Transfers: 2014 SCMR 33 (Muhammad Iqbal v. Khair Din): Section 53 of the Transfer of Property Act, 1882 aims to protect purchasers who acquire property in good faith and for consideration. Buyers should ensure that transactions are conducted transparently and investigate the history of the property to avoid involvement in fraudulent transfers.

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Fraudulent Transfers and Lis Pendens: 2014 SCMR 33 (Muhammad Iqbal v. Khair Din): This case highlights the principle of lis pendens, which means any property purchased during pending litigation is subject to the outcome of the suit. A consent decree obtained by fraud or collusion does not confer valid title. Buyers should ensure that the property is free from any litigation and thoroughly verify the authenticity of the documents to avoid being trapped in fraudulent transactions.

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Secondary Evidence and Power of Attorney: 2014 MLD 911 (Zafar Iqbal v. Moula Dad): This case emphasizes the importance of original documents in property transactions. When the original document is not available, secondary evidence can only be accepted under strict conditions. Buyers should ensure that the power of attorney and other related documents are genuine and properly executed, preferably by consulting legal experts before proceeding with the purchase.

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Pardanasheen Ladies and Documentation: 2014 YLR 2595 (Anwer Shah Quraishi v. Mst. Hussan Baha): When dealing with pardanasheen (veiled) ladies, the burden of proof lies heavily on the beneficiary of the document to prove that the lady understood the document and that it was executed freely. Purchasers should take extra precautions when dealing with property transactions involving pardanasheen ladies to ensure the validity of the transaction.

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Specific Performance and Unregistered Contracts: 2014 YLR 2005 (Muhammad Shah v. Agha Seemab Ali): This case underscores that even unregistered sale agreements can provide a basis for a claim if possession has been transferred. However, proving the agreement and possession is crucial. Buyers should ensure that all contracts are registered to avoid disputes and provide clear evidence of the transaction.

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Unregistered Deeds and Burden of Proof: 2014 YLR 468 (Noor Maidar v. Altaf Ahmad Khan): The burden of proof for an unregistered deed lies on the party claiming the transaction. Buyers should avoid relying on unregistered deeds and ensure that all transactions are properly registered and documented.

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Sale and Limitation: 2014 YLR 139 (Khuda Bakhsh v. Fazalur Rehman): Limitation periods for filing suits based on agreements to sell are strictly enforced. Buyers should be mindful of the limitation periods and ensure timely legal actions to protect their interests. An agreement to sell does not create ownership rights unless properly executed and registered.

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Pre-Emption and Subsequent Sales: 2014 PLD 25 (Mir Qadir Khan v. Ayub Khan): Subsequent sales of property under litigation require proper notification and adherence to the pre-emption laws. Buyers should ensure compliance with all legal requirements to avoid disputes and potential litigation.

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Redemption and Mortgage Rights: 2014 MLD 212 (Muhammad Zahir v. Amir Saleh): The period of limitation for redeeming mortgaged property is reckoned from the date of the first deed of mortgage. Buyers should ensure clarity on the mortgage status and the timeline for redemption to avoid complications in property transactions.

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Bona Fide Purchaser and Lis Pendens: 2014 CLD 1364 (Muhammad Hussain v. Judge Banking Court No.1, Multan): The principle of lis pendens applies to the sale of mortgaged property during pending litigation. Buyers should verify that the property is not under any mortgage or pending litigation to ensure they acquire a clear title.

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Ingredients of a Sale Transaction: 2014 YLR 178 (Abu Bakar v. Mst. Khayber Jan): A valid sale transaction requires the seller, buyer, sale consideration, and delivery of possession, along with attesting witnesses. Buyers should ensure all these elements are present and documented to validate the sale.

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Lis Pendens and Injunctions: 2014 YLR 2021 (Muhammad Asad v. Abdullah Tahir): The principle of lis pendens ensures that the property subject to litigation retains its status quo to protect the plaintiff’s rights. However, this principle alone does not warrant the granting of a temporary injunction. Buyers should ensure that the property they intend to purchase is not under any active litigation to avoid future complications. Moreover, even if an interim injunction is not granted, the principle of lis pendens may still protect the buyer’s rights.

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Jurisdiction and Validity of Documents: 2014 YLR 1456 (Mst. Kubra Begum v. Shams Din): Settlement authorities have limited jurisdiction following the repeal of settlement laws. Buyers should verify the jurisdiction and authenticity of property transfer documents, particularly when dealing with properties previously under settlement or evacuee status. The case underscores the importance of having property disputes resolved in civil courts rather than relying on administrative orders from defunct authorities.

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Evacuee Trust Property: 2014 YLR 1278 (Abdul Rasheed v. Secretary, Ministry of Minorities Affairs Division): The case highlights the potential issues with evacuee trust properties and the importance of verifying the trust status of a property before purchase. Buyers should ensure that there are no pending claims or references with the Evacuee Trust Properties Board and obtain clear confirmation that the property is not classified as a trust property.

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Temporary Transfers and Appeals:2014 CLC 1689 (Hafiz Iftikhar Ahmed v. Khushi Muhammad): The principle of lis pendens applies to property transfers made within the limitation period for filing appeals. Buyers should avoid purchasing property that is still within the appeal period following a court decision to prevent acquiring a title that could be invalidated by future judgments.

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Surety and Auction Purchases: 2014 CLC 1529 (Ghulam Ali v. Mst. Fatima Bibi): Buyers should be cautious when purchasing properties that have been subject to surety and auction proceedings. It is crucial to verify the obligations and liabilities associated with such properties. The case illustrates the need to understand the extent of surety liability and the importance of checking for any ongoing legal obligations before finalizing a purchase.

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Pre-emption and Fraudulent Transactions: 2013 YLR 121 (Talib Hussain v. Muhammad Boota): The courts are vigilant against transactions intended to defeat pre-emption rights through the guise of gifts. Buyers should ensure that any property they intend to purchase is not subject to pre-emption claims and verify the true nature of any prior transactions involving the property.

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Eviction and Change of Ownership: 2013 SCMR 1497 (Symphony (Pvt.) Ltd. v. Haji Fazal Karim): Tenants must be informed of changes in property ownership, and rent payments must be directed to the new owner to avoid eviction for non-payment. Buyers should ensure proper notification to tenants and compliance with rent laws following the acquisition of rental properties.

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Proof of Sale and Legal Formalities: 2013 SCMR 684 (Ghulam Mustafa v. Muhammad Yahya): Proof of a valid sale is essential, especially for colony lands where permission from relevant authorities is required. Buyers should ensure that all legal formalities, including permissions from the Deputy Commissioner or relevant authorities, are properly documented and that the sale is reflected in the revenue records.

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Impleadment and Injunction Orders: 2013 SCMR 602 (Vidur Impex and Traders Pvt. Ltd. v. Tosh Apartments Pvt. Ltd.): Buyers must ensure that no injunction orders exist on the property they intend to purchase. If an injunction is in place, any transactions made in defiance of the court order will be considered illegal, and the purchasers will not acquire any legal rights or interests in the property. Additionally, late applications for impleadment in suits for specific performance may be dismissed if there is no valid reason for the delay, and the purchasers’ conduct is found to be collusive or clandestine.

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Lis Pendens Principle: 2013 SCMR 551 (Bagh Ali v. Mst. Ayesha): The principle of lis pendens applies to protect the rights of parties involved in ongoing litigation. Purchasers should conduct thorough due diligence to ensure that the property is not subject to any pending suits or claims before proceeding with the purchase. Transactions made during the pendency of a suit may be invalidated, and the purchasers cannot claim to be bona fide without notice.

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Fraudulent Transfers: 2013 SCMR 146 (Nisar Ahmed Afzal v. Muhammad Taj): Purchasers should be wary of fraudulent transfers intended to defeat existing interests in the property. If a prospective purchaser enters into an agreement to sell with the current owner, any subsequent cancellation of the agreement or transfer to another party intended to defeat the purchaser’s interest may be challenged. The original purchaser’s rights can be enforced against the subsequent transferees if the transaction is found to be fraudulent under Section 53 of the Transfer of Property Act, 1882.

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Change of Ownership and Tenant Rights: 2013 CLD 1687 (Symphony (Pvt.) Ltd. v. Haji Fazal Karim): When purchasing a property that is currently rented out, the new owner must notify the tenant of the change in ownership and ensure that rent payments are redirected accordingly. Failure to do so may result in complications with rent collection and potential eviction proceedings.

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Non-Registration of Sale Agreements: 2013 YLR 2439 (Sardar Ahmad v. Mst. Zeenat Bibi): Sale agreements for property must be registered to confer any legal title to the purchaser. Unregistered agreements do not bestow ownership rights, and buyers should ensure proper registration to secure their interests.

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Bona Fide Purchasers and Ostensible Owners: 2013 PLD 517 (Nazir Ahmad v. Muhammad Yousaf): Purchasers must verify that the seller is the ostensible owner of the property and that the transaction is in good faith. If the seller is not the true owner or the sale is made under dubious circumstances, the purchaser’s rights may be challenged. Proper verification from revenue records and obtaining possession from the ostensible owner can protect the buyer’s rights under Section 41 of the Transfer of Property Act, 1882.

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Mortgaged Properties and Lis Pendens: 2013 CLD 1684 (Muhammad Hussain v. Judge Banking Court No. 1 Multan): Buyers of mortgaged properties should be aware that their purchase may be subject to existing claims and decrees. The principle of lis pendens will apply, and the buyer’s rights may be defeated if the property is under litigation or has unresolved mortgage claims. Proper due diligence, including checking for any charges or decrees, is essential before purchasing such properties.

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Effect of Unregistered Deeds: 2013 MLD 1547 (Ghulam Rasool v. Ahmed Khan): Buyers should verify that the property has been properly transferred and that the vendor is an ostensible owner with a valid title. Even if the property is reflected in the revenue records, buyers must ensure that the transaction is in good faith and for value to protect their rights under Section 41 of the Transfer of Property Act, 1882.

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Lis Pendens and Impleading of Parties: 2013 MLD 92 (Ch. Zulfiqar Ali v. Additional District Judge, District Okara): When purchasing property during the pendency of a suit, buyers should seek leave from the court to avoid being affected by the doctrine of lis pendens. Transactions made without such leave may not grant the buyer any right to be impleaded as a party in the suit, and the court can reject such applications if the transaction appears to be non-bona fide or intended to defeat the interests of the original parties.

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Tenant and Landlord Relationship vs. Sale Agreement: 2013 YLR 1898 (Mrs. Refhat Hamidee v. Sheikh Abdul Aziz): Tenants should be cautious about entering into sale agreements without ensuring that a registered sale deed is executed. Until a registered sale deed is in place, the relationship of tenant and landlord remains, and the tenant cannot avoid payment of rent based on an unregistered agreement to sell. Such agreements do not create any legal title or interest in the property.

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Due Diligence in Property Transactions: 2013 CLC 1179 (Hakim Mairajuddin v. Abdul Rasheed): Purchasers must exercise maximum care when entering into property transactions. The vendor cannot pass a better title than he holds, and the purchaser’s title will depend on the vendor’s title. Buyers should thoroughly verify the vendor’s title to avoid future disputes and pursue the vendor for any loss if the title is found defective.

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Pre-Emption and Agreement to Sell: 2012 MLD 1440 (Sardar Muhammad Sarwar Khan v. Muhammad Nawaz Khan): An agreement to sell does not transfer ownership or title, and therefore, cannot be the basis for exercising the right of pre-emption. The right of pre-emption can only be exercised when there is a transfer of ownership or title through a registered sale deed.

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Government Servants and Property Transactions: 2012 SCMR 1757 (Rao Shafay Ali Khan v. Lahore High Court, Lahore): Government servants must declare all transactions involving movable or immovable property exceeding a certain amount of money and seek permission for such transactions. Failure to do so can result in allegations of misconduct and compulsory retirement. Judicial officers must avoid involvement in property transactions that could be seen as an abuse of judicial powers.

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Specific Performance and Attorney’s Authority: 2012 SCMR 1526 (Mst. Naseem Akhtar v. Abdul Tawab): Buyers must ensure that the attorney executing the sale has valid authority and that any transactions are in compliance with applicable regulations. Agreements made by an attorney without proper authority or in violation of regulations may be declared void. The principal (original owner) retains the power to dispose of the property unless specifically revoked.

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Lis Pendens and Pending Litigation: 2012 SCMR 983 (Mst. Tabassum Shaheen v. Mst. Uzma Rahat): The principle of lis pendens applies even if an appeal has not yet been filed but the limitation period for filing the appeal has not expired. Buyers should verify the status of pending litigation and be aware that any transactions made during the pendency of litigation may be invalidated.

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Bona Fide Purchasers and Ostensible Ownership: 2012 SCMR 84 (Mst. Rubina Badar v. Long Life Builders): Buyers claiming to be bona fide purchasers must demonstrate that they acted in good faith and took reasonable care before entering into the transaction. They must also show that they paid valuable consideration and had no notice of any prior disputes or transactions. The onus of proving bona fide status lies with the buyer.

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Illegal Possession and Interim Relief: 2012 MLD 673 (Mohi ud Din v. Muhammad Iftikhar Siddique): Buyers claiming possession of a property must ensure that their title and possession are legal and properly documented. Courts may restore possession to the original owner if the buyer fails to provide adequate evidence of ownership. Buyers should be prepared to defend their possession through proper legal channels and ensure that their transactions are not in contravention of any laws.

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Due Diligence and Ostensible Ownership: 2012 CLC 1268 (Aziz Ullah v. Mst. Hameeda Begum): Buyers should ensure that the vendor is an ostensible owner and that the transfer is made with the consent of the real owner, either express or implied. Buyers must act in good faith and take all reasonable steps to confirm the ownership and title of the vendor. Inconsistent or contradictory documents and statements from the vendor may invalidate the buyer’s claim to protection under Section 41 of the Transfer of Property Act, 1882.

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Verification of Ownership and Possession: 2012 YLR 506 (Major (Rtd.) Fareed Jan v. Mst. Sanobar Abdullah Jan): When dealing with properties claimed through gift deeds, especially from dependent or ‘pardanashin’ ladies, strong and cogent evidence is required to prove the execution of such deeds. Buyers should verify that the gift was made without undue influence, fraud, or misrepresentation, especially when the grantor is dependent on the beneficiaries.

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Unregistered Sale Deeds and Possession: 2012 YLR 209 (Nadir Khan v. Mst. Afnana): An unregistered sale deed coupled with possession can be used as a defense under Section 53-A of the Transfer of Property Act, 1882, but it cannot be the basis for a suit for declaration of title. Buyers should ensure that they obtain registered sale deeds to secure their ownership rights and avoid future legal disputes.

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Inquiry About Vendor’s Title: 2012 CLC 1944 (Mosam Khan v. Sarfraz Khan):

Buyers must diligently inquire about the title of the vendor before entering into a sale transaction. Failure to do so may result in losing the protection of Section 41 of the Transfer of Property Act, 1882, if the vendor is later found not to have a valid title.

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Retrospective Application of Shariat Law: 2012 CLC 1944 (Mosam Khan v. Sarfraz Khan): Buyers should be aware that the Khyber Pakhtunkhwa Muslim Personal Law (Shariat) Application Act, 1935, and the West Pakistan Muslim Personal Law (Shariat) Application Act, 1962, have retrospective effects. Therefore, transactions involving inheritance shares of Muslim females should be verified for compliance with these laws to avoid invalid transactions.

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Fraudulent Transactions and Bona Fide Purchasers: 2012 YLR 403 (Muhammad Afzal Nasir v. Chief Settlement Commissioner/MBR J-V): Property Buyers should avoid purchasing properties that have a history of fraudulent transactions or forged documents. Even if the buyer is a bona fide purchaser for value, if the vendor’s title is based on fraud, the purchase may be invalidated, and the buyer will bear the consequences.

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Validity of Transactions by Attorneys: 2012 CLC 79 (Muhammad Suleman v. Rasheeda Bibi): Property Buyers in Pakistanmust verify that the power of attorney held by the vendor’s agent is valid and has not been revoked. Transactions conducted by an attorney within the scope of their authority are valid, but if the power of attorney is found to be fraudulent, the transaction may be voided.

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Cancellation of Allotments and Rights of Subsequent Purchasers: 2012 MLD 1538 (Ch. Zafar Hussain v. Border Area Committee through Chairman): If purchasing land that was initially allotted under specific schemes or regulations, buyers should ensure that all regulatory approvals and no-objection certificates are in place. Subsequent property purchasers should also be aware that once the original allottee is allowed to transfer the property, they are considered free citizens with rights under the Constitution.

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Impact of Pending Litigation on Property Transactions: 2012 PCrLJ 423 (Sarfraz Khan v. Allah Bux): Buyers should avoid purchasing property involved in ongoing litigation. Under Section 52 of the Transfer of Property Act, 1882, property under litigation cannot be transferred. Purchasers should diligently check for any ongoing litigation involving the property to prevent legal complications.

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Verification of Ownership and Authority: 2011 SCMR 837 (Abdul Ghani v. Mst. Yasmeen Khan): When purchasing property, especially from an attorney acting on behalf of a minor, buyers must take precautionary measures to verify the authenticity and validity of the power of attorney. Failing to do so can result in the loss of protection under Section 41 of the Transfer of Property Act, 1882, which protects bona fide purchasers.

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Historical Ownership and Evacuee Property: 2011 SCMR 794 (Ghulam Rasool v. Akbar Ali): Buyers should confirm the historical ownership of the property, particularly when dealing with evacuee property. The sale deed should be executed and registered before critical dates to avoid disputes over ownership and the need for confirmation from the Custodian of Evacuee Property.

Doctrine of Lis Pendens and Bona Fide Purchasers: 2011 PLD 905 (Muhammad Ashraf Butt v. Muhammad Asif Bhatti): Property purchasers must understand that acquiring property involved in litigation binds them to the outcome of the ongoing suit. The principle of lis pendens ensures that any transfer during litigation does not confer a legal title free from the claims of the pending suit.

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Good Faith and Reasonable Care: 2011 CLD 1806 (Mst. Rubina Badar v. Long Life Builders): Buyers must demonstrate good faith and reasonable care when purchasing property to claim protection under Section 41 of the Transfer of Property Act, 1882. This includes verifying the title with relevant authorities and ensuring that no prior transactions exist that could affect their ownership rights.

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Title Dependent on Vendor’s Ownership: 2011 CLC 186 (Sultan Ahmad v. Latif Ahmad): The right and title of the purchaser depend on the strength of the vendor’s title. Buyers should ensure that the vendor holds a clear and strong title to the property to avoid future disputes.

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Eviction and Symbolic Possession: 2011 PLD 450 (Mst. Razia Bibi v. Muhammad Shareef): In execution proceedings, if a subsequent purchaser has constructed a house on the disputed plot, the decree-holder may only obtain symbolic possession if the decree does not explicitly include the demolition of the structure or cancellation of the subsequent sale deed. Buyers should ensure that the terms of the sale and any potential disputes are clearly understood and resolved before purchasing.

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Fraudulent Transactions and Due Diligence: 2012 YLR 403 (Muhammad Afzal Nasir v. Chief Settlement Commissioner/MBR J-V): Property Buyers must be cautious of properties with fraudulent transactions in their history. Even if the buyer is a bona fide purchaser for value, a fraudulent title cannot be perfected by subsequent transactions. Diligent investigation into the property’s history is crucial.

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Invalid Sales and Rights of Heirs: 2011 PLD 23 (Mst. Nishat alias Shato v. Muslim Khan alias Musali): When purchasing property from family members or heirs, ensure that the sale is valid and that the seller has clear authority and title. If the sale is later found to be invalid due to fraud or lack of consideration, the transaction can be overturned.

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Verification of Complete Ownership Transfer: 2011 PTD 1052 (Khalid Muhammad Khan v. Income Tax/Wealth Tax Appellate Tribunal): Property Buyers in Pakistan should ensure that the entire sale consideration is paid and possession is delivered. Additionally, having a registered general power of attorney can substantiate claims of ownership and aid in legally transferring property to heirs. This case highlights that possession and proper documentation, such as an agreement to sell and a power of attorney, are critical in establishing ownership.

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Importance of Documentation and Timeliness in Claims: 2011 YLR 3089 (Mazhar Saeed v. A.D.J.): When dealing with property transfer and tenancy issues, it is crucial to respond promptly to legal notices and provide clear evidence of any claims to ownership or tenancy. Failure to promptly address legal notices and to substantiate claims with clear documentation can result in unfavorable judgments.

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Jointly Owned Property and Partition Sales: 2011 YLR 3077 (Kausar Parveen v. Rasheed Ahmed): In cases of jointly owned property where partition is sought, co-owners should act promptly if they wish to purchase the property to avoid its sale through auction. A failure to act within given time frames or to demonstrate financial capability can lead to the property being auctioned off.

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Finality of Consolidation Schemes and Legal Proceedings: 2011 YLR 3025 (Qadir Bakhsh v. Member, Punjab Board of Revenue): Legal proceedings, particularly those involving land consolidation, once finalized, cannot be reopened by executive authorities. Property Buyers in Pakistan should ensure that the land they are purchasing is not subject to ongoing or future legal disputes regarding consolidation or review by authorities.

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Essential Terms in Sale Contracts: 2011 YLR 2825 (Treat Corporation Ltd. v. Elmac Ltd.): Contracts for the sale of immovable property must clearly state the essential terms, including the payment of the sale price, delivery of possession, and the absence of conditions requiring third-party compliance. Property Buyers in Pakistan should ensure that these elements are clearly defined to avoid disputes.

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Risks of Non-Cultivable Land: 2011 YLR 2733 (Mst. Amir Bano v. Government of Punjab): When purchasing agricultural or government land, property buyers should verify the usability of the land, such as water availability for cultivation. If the land proves non-cultivable, buyers may face challenges, including the risk of cancellation of the sale by authorities.

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Handling Factual Controversies in Property Disputes: 2011 YLR 1683 (Muhammad Afzal Shah v. Muhammad Hussain): When factual controversies exist in property disputes, such as claims of ownership and possession, courts require thorough investigations. Buyers should ensure all aspects of their claims are well-documented and substantiated to avoid dismissals on technical grounds.

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Specific Performance and Prior Agreements: 2011 CLC 1566 (Nasir Ali Shah v. Ahmad Yar): Property Buyers entering into agreements involving government land or property should be aware of prior agreements and obtain necessary permissions. The presence of prior agreements or ongoing suits can complicate claims of ownership and lead to legal disputes.

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Jurisdiction and Validity of Sales in Execution Proceedings: 2011 PLD 586 (MCB Bank Ltd. v. Duty Free Shop Ltd.): When dealing with property acquired through auction or sale in execution proceedings, it is important to verify the proper jurisdiction and compliance with legal procedures. In this case, non-compliance with procedural requirements led to the invalidation of the sale.

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Ensuring Legitimate Ownership Transfer: 2011 CLD 1430 (MCB Bank Ltd. v. Duty Free Shop Ltd.): Verify that any transfer of property is supported by valid documentation and approved by relevant authorities. Transfers done by decisions of boards or without proper registration can be challenged, leading to complications in establishing ownership.

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Conditional Transfers and Specific Performance: 2011 CLD 1238 (Dewan Development (Pvt.) Ltd. v. MyBank Limited): When entering into agreements involving conditional transfers of property, such as those stipulated in a Memorandum of Understanding (MoU), ensure that all reciprocal and collateral acts are clearly defined and agreed upon by both parties. In cases where the other party fails to perform their obligations, the MoU can still be considered valid and enforceable for specific performance, protecting the original owner’s interest until the final decision of the case.

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Bona Fide Purchaser and Legal Notices: 2011 YLR 2671 (Tanzeem Ahmed Khan v. Province of Sindh): Always verify the title and legal status of the property before purchasing. Construction or development work on disputed land without approved plans can be halted by court orders. Property Buyers in Pakistan should ensure that no interim orders or legal disputes are pending before proceeding with the purchase and any subsequent construction.

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Membership and Transfer of Ownership in Cooperative Societies: 2011 YLR 246 (Citizen Cooperative Housing Society Ltd. v. Agha Taj Muhammad Academy): When purchasing property within a cooperative society, ensure the society acknowledges the transfer and grants membership as per the society’s rules and regulations. Payment of the full sale consideration and compliance with Section 54 of the Transfer of Property Act, 1882, are essential to establish entitlement to membership and avoid legal disputes.

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Boundary Discrepancies in Sale Deeds: 2011 CLC 1594 (Pakistan Defence Officers Housing Authority, Karachi v. Dr. Syed Tariq Sohail): Property Buyers in Pakistan should always verify the exact area and boundaries of the property as mentioned in the sale deed and site plan. Claims to additional areas based on boundary descriptions are not valid if the exact dimensions are specified in the deed.

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Effect of Subsequent Agreements on Prior Agreements: 2011 CLC 1412 (Syed Moazzam Ali Shah v. Muhammad Suleman): A subsequent agreement for the sale of immovable property does not confer or convey any title if there is an existing prior agreement. The title acquired under a subsequent agreement remains an “equitable right” or an “imperfect title”. Buyers must ensure that there are no prior agreements or claims on the property to avoid legal complications.

Fraudulent and Misrepresentative Transfers: 2011 MLD 803 (Ghulam Akbar v. Jahangir Ali): Co-owners can sell their share of undivided property to another co-owner or even to a stranger. However, claims of fraud or misrepresentation must be substantiated with evidence. Property buyers in Pakistan should conduct thorough due diligence and verify all aspects of the property and its ownership before proceeding with the purchase.

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Mandatory Registration and Rejection of Plaints: 2011 MLD 303 (Muhammad Arif v. Ghulam Akbar Gabool): Contracts for the sale of immovable property do not require compulsory registration as they do not create a title or charge on the property. Such agreements are only indicative of the terms agreed upon for a future transfer. Buyers should ensure proper documentation and follow-up actions to secure the transfer of title through registered sale deeds.

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Ejectment and Default in Rent Payment: 2011 YLR 3089 (Mazhar Saeed v. A.D.J.): Tenants who default on rent payments and fail to respond to legal notices risk ejectment. Claims to ownership based on unsubstantiated sale agreements will not hold unless clearly documented and presented. Tenants should address legal notices promptly and provide clear evidence of their claims to avoid eviction.

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Legal Recourse for Disputes in Property Transactions: 2011 YLR 2825 (Treat Corporation Ltd. v. Elmac Ltd.): Ensure all terms of sale agreements are clearly defined and mutually agreed upon to avoid future disputes. In case of disputes, legal recourse must be sought promptly, and all relevant documentation and evidence should be presented to support claims.

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Review of Finalized Consolidation Schemes: 2011 YLR 3025 (Qadir Bakhsh v. Member, Punjab Board of Revenue): Finalized consolidation schemes and legal proceedings should not be reopened by executive authorities. Buyers should ensure the land they are purchasing is not subject to ongoing or potential future legal disputes regarding consolidation or review by authorities.

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Doctrine of Lis Pendens: 2011 CLC 349 (Muhammad Ayub v. Barkat Ali Shaikh): When purchasing property, ensure that no litigation is pending regarding the property. If the property is acquired during the pendency of a suit, the doctrine of lis pendens will apply, and the buyer cannot claim that they were unaware of the dispute. Any improvements made to the property during this period will not be compensated if made in bad faith or without due diligence.

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Auction Purchases and Legal Compliance: 2011 PLD 25 (Shuja Khan Baluch v. Capital Development Authority, Islamabad): Ensure that the property purchased through auction, especially in execution of a decree, is transferred in accordance with legal requirements. Authorities such as the Capital Development Authority are obligated to transfer the property to the auction purchaser if there is no valid freezing order from NAB or other relevant authorities. Absence of freezing orders implies no ongoing investigation or legal barrier to the transfer.

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Benami Transactions: 2010 SCMR 171 (Muhammad Yousaf Mirza v. Samiullah): Avoid benami transactions unless there is compelling and clear evidence supporting the beneficial ownership. Courts require convincing proof of such arrangements, including the purpose and payment records. Mere allegations without substantial evidence will not succeed in claiming ownership under benami transactions.

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Protection for Bona Fide Purchasers: 2010 SCMR 18 (Muhammad Shamim v. Mst. Nisar Fatima): When claiming protection as a bona fide purchaser under Section 41 of the Transfer of Property Act, 1882, it is crucial by a property buyer in Pakistan to ensure the following:

• • • The transferor should be the ostensible owner.
    • The transfer should be made with the consent (express or implied) of the real owner.
    • The transfer must be for consideration.
    • The purchaser must act in good faith and take reasonable care to ascertain the transferor’s authority to transfer the property.

Co-Sharers and Rights of Inheritance: 2010 SCMR 18 (Muhammad Shamim v. Mst. Nisar Fatima): Co-sharers have rights to the property to the extent of their shares. They cannot alienate more than their share without the consent of other co-sharers. Any sale or transfer by a co-sharer will not affect the rights of other co-sharers, and the purchaser must take due care to verify the complete and correct ownership status.

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State Land and Government Sanction: 2010 YLR 2785 (Khaliq Dad v. Noor Bibi): When dealing with state land, ensure that all transfers and sales have the necessary sanctions from the competent authorities. Without such sanctions, any sale or transfer of state land is invalid. Property buyers in Pakistan Ensure all proper documentation, including allotment orders and leasehold rights, are in place before proceeding with the transaction.

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Government Taxes and Transfer Fees: 2010 CLC 897 (Flying Kraft Paper Mills (Pvt.) Limited v. District Officer, Revenue and Estate, Charsaddah): Auction purchasers of property in Pakistan must comply with the payment of government dues, taxes, and transfer fees as per prevailing rates. Sale certificates must be honored and recorded in the revenue records, provided all dues are cleared.

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Redemption of Mortgaged Property and Prescription: 2010 PLD 96 (Baidullah Jan v. Aurang Zeb): In cases involving long-standing mortgages, ensure timely legal action for redemption. Continuous possession by mortgagees over an extended period can lead to prescriptive rights, converting them into owners. Purchases of property made during the pendency of redemption suits will be ineffective due to the principle of lis pendens.

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Fraud and Misrepresentation in Sale Transactions: 2010 YLR 3242 (Atta Muhammad v. Muhammad Sharif): Ensure transparency and avoid fraudulent or misrepresentative practices in property transactions. Claims of bona fide purchases without notice of prior agreements or disputes must be substantiated with clear evidence. Any concealment or misrepresentation can invalidate the transaction.

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Equitable Rights and Imperfect Titles: 2011 CLC 1412 (Syed Moazzam Ali Shah v. Muhammad Suleman): Subsequent agreements for the sale of immovable property do not confer legal title if there is an existing prior agreement. Such agreements may only provide equitable rights or imperfect titles. The rights of prior purchasers take precedence, and subsequent buyers must ensure the property’s title is free from previous claims.

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Verification of Allotment and Eligibility: 2010 YLR 2699 (Province of Punjab v. Abdul Hanif): Ensure that the initial allotment of the property was legitimate, especially if it was allotted under a government scheme. Verify that the allottee was eligible and that the allotment was not obtained through fraudulent means. A minor or ineligible person should not be allotted land, and any allotment to such a person may be challenged and deemed invalid.

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Ownership and Legal Necessities: 2010 YLR 2582 (Muhammad Hussain v. Shahab Din): Verify the status of the ownership and ensure that the seller has absolute ownership of the property. If the property is transferred to an issueless widow for maintenance, she may not have absolute ownership, and her ability to sell the property could be limited. Property buyers in Pakistan should ensure that all legal necessities are met and that the transaction is by the law.

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Possession and Agreement to Sell: 2010 YLR 2054 (Mehboob Elahi v. Sabir Ali): When purchasing property based on an agreement to sell, ensure that possession has been legally transferred to the seller. Without clear evidence of possession, the provisions of Section 53-A of the Transfer of Property Act, 1882, may not protect the buyer. Property buyers in Pakistan should confirm at the time of purchase that the seller has the right to transfer possession.

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Jurisdiction of Civil Courts and Revenue Matters: 2010 CLC 1889 (Abdul Majeed v. Muhammad Siddique): Civil courts have jurisdiction to interfere in revenue matters if the orders passed are void, without jurisdiction, mala fide, or based on fraud. When challenging a mutation based on fraud or misrepresentation, property buyers in Pakistan should ensure that the facts are clearly presented, and the civil court can adjudicate the matter.

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Mutation and Verification: 2010 YLR 175 (Khushi Muhammad v. Bashir Ahmad): Ensure that mutations are properly attested and verified by the revenue authorities. Unattested and unverified mutations lacking signatures and thumb impressions of the vendor and vendee are invalid. Proper procedural formalities must be completed to lend authenticity to the mutation.

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Bona Fide Purchasers and Fraud: 2010 YLR 171 (Mst. Moti Begum v. Muhammad Asghar): If purchasing property during the pendency of litigation (lis pendens), be aware that such transactions are subject to the outcome of the litigation. Bona fide purchasers must verify the status of the property to avoid being affected by prior disputes or fraudulent transactions.

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Evacuee Property and Past Transactions: 2010 CLC 1215 (Province of Punjab v. Muhammad Latif): Verify the history of the property, especially if it was evacuee property. Orders obtained through fraud or misrepresentation can be challenged, and past and closed transactions can be reopened. Ensure that all relevant parties are impleaded in any suit challenging the validity of the transfer.

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Fraudulent Transactions and Pending Proceedings: 2010 PLD 249 (Dr. Muhammad Iqbal v. Member, Board of Revenue/Chief Settlement Commissioner, Lahore): Be cautious of properties involved in fraudulent transactions or pending proceedings. Notified officers can only proceed in pending cases, and any attempt to reopen past and closed transactions is subject to legal scrutiny. Property buyers in Pakistan should get legal assistance to ensure that the property transfer is legitimate and free from any fraudulent history.

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Land Falling in Specific Khasra and Equitable Relief: 2010 MLD 36 (Mst. Saeeda Sultana v. District Coordination Officer): Prospective property buyers in Pakistan should verify the status of the land, especially if it falls under specific khasra numbers included in graveyard ordinances or other specific regulations. Bona fide purchasers must exercise due diligence to inquire about the status of the land. Equitable relief will not be granted to encroachers or those who purchase land without proper inquiry.

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Company Assets and Lifting the Corporate Veil: 2010 CLC 1895 (State Life Insurance Corporation of Pakistan v. Fazal and Sons (Pvt.) Ltd): When dealing with property owned by a company, property buyers in Pakistan should ensure that the purchase is made by Pakistani company laws. The personal assets of company directors or officers cannot be attached to satisfy company liabilities unless it is proven that company funds were used to purchase the property. Verify the legal standing and ownership of the property before purchase.

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Due Diligence on Property Title and Seller’s Authority: 2010 CLC 1144 (Royal Group v. Reza Iqbal): Property buyers in Pakistan should ensure that the seller has a clear title to the property and the authority to transfer it. Verify that any agreements, such as an agreement to sell, are properly executed and documented. The seller must be able to pass on a clear title to the buyer, and any pending renewals or leases should be clarified and resolved before completing the purchase.

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Protection Under Section 53-A of Transfer of Property Act, 1882: 2010 CLC 407 (Muhammad Nawaz Magsi v. Haji Illahi Bux): If you are purchasing property in Pakistan based on an agreement to sell, ensure that possession has been legally transferred to the buyer. The buyer can rely on the protection of Section 53-A of the Transfer of Property Act, 1882, which allows the buyer to retain possession of the property even if the sale deed is not executed, provided the buyer has performed or is willing to perform their part of the contract. Subsequent buyers must inquire about the possession status of the property to avoid conflicts.

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Principles of Estoppel and Previous Admissions: 2009 SCMR 759 (Mirza Muhammad Inayat Saraf v. Mst. Nasim Akhtar): When purchasing property, be aware of any previous admissions or statements made by co-owners or parties related to the property. Such admissions can stop parties from making contrary claims later on. Property buyers in Pakistan should ensure that all relevant parties acknowledge the transaction and their rights are clearly defined.

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Priority of Registered Mortgages: 2009 SCMR 611 (Industrial Development Bank of Pakistan v. Muhammad Ayub Stone Crushers): When dealing with mortgaged properties, understand that registered mortgages take priority over unregistered mortgages. Ensure that any prior charges or mortgages on the property are disclosed and addressed. Property buyers in Pakistan should conduct due diligence to avoid conflicts with prior mortgagees.

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Authority of Natural Guardians in Property Transactions: 2009 PLD 751 (Muhammad Haneef v. Abdul Samad): Property Buyers in Pakistan should verify the authority of the person acting as a guardian in transactions involving minors’ property. Under Islamic law, a mother is not a natural guardian for property dealings. Transactions made by guardians without proper authority can be invalidated.

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Validity of Long-Standing Entries in Revenue Records: 2009 PLD 347 (Safdar Hussain v. Muhammad Azam Khan): Long-standing entries in revenue records carry a presumption of truth. Property buyers in Pakistan should verify the historical entries and ensure they are accurate. Claims based on these records are typically protected unless proven otherwise.

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Bona Fide Purchasers Without Notice: 2009 CLD 140 (Habib Bank Ltd. v. Syed Muhammad Haroon): The concept of a bona fide purchaser for value without notice is crucial in protecting the rights of purchasers. Ensure that you, as a buyer of property in Pakistan, conduct thorough due diligence to verify that there are no undisclosed charges or mortgages on the property. If any such issues exist, they should be disclosed and resolved before completing the purchase.

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Discrepancies and Fraudulent Transactions: 2009 YLR 1435 (Abdul Shakoor v. Mst. Asghari Begum): Be cautious of fraudulent transactions and discrepancies in title documents. Property buyers in Pakistan should verify all claims of ownership and the authenticity of title documents. Any signs of forgery or fabrication should be thoroughly investigated and addressed.

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Jurisdiction and Past Transactions: 2010 PLD 249 (Dr. Muhammad Iqbal v. Member, Board of Revenue/Chief Settlement Commissioner, Lahore): Property buyers in Pakistan should make themselves aware of the jurisdictional limits and past transactions involving the property. Claims based on past and closed transactions should be handled carefully, ensuring that any legal proceedings are within the jurisdiction and authority of the relevant authorities.

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Compliance with Government Grants Act: 2009 MLD 868 (Board of Revenue, Punjab v. Sethi Straw Boards Mills Ltd.): When dealing with state land grants, recognize that these are not typical sales and are insulated from the provisions of the Transfer of Property Act, 1882, under Sections 2 and 3 of the Government Grants Act, 1895. Terms of the grant govern the rights and obligations, and non-compliance with these terms can nullify the grant. Property buyers in Pakistan should always adhere to the specific terms and timelines set forth by the government in such grants.

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Entitlement to Damages in Failed Specific Performance: 2009 PLD 390 (Rashid Naseem v. Mrs. Amnia Fahim): If a seller fails to complete a sale despite receiving part payment, the buyer can claim damages even if specific performance is not granted. The court can award compensation under Section 19 of the Specific Relief Act, of 1877. Therefore, property buyers in Pakistan should ensure that agreements to sell are clear and enforceable, and be prepared to pursue compensation if the seller defaults.

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Doctrine of Lis Pendens: 2009 PLD 382 (Rashid Ahmed Barry v. Muhammad Iqbal): Be aware that any purchase made while a related legal suit is pending will be subject to the outcome of that suit under Section 52 of the Transfer of Property Act, 1882. This doctrine protects the rights of the first vendee in a pending litigation against subsequent purchasers. Property buyers in Pakistan should always check for ongoing litigation involving the property before purchasing.

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Priority of Registered Mortgages: 2009 CLD 346 (Industrial Development Bank of Pakistan v. Muhammad Ayub): In the context of mortgaged properties, registered mortgages have priority over unregistered mortgages. Property buyers in Pakistan should ensure that any previous mortgages are disclosed and settled. Before advancing loans or purchasing property, conduct thorough checks on any existing encumbrances.

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Protection for Bona Fide Purchasers: 2009 YLR 1688 (Muhammad Yousaf v. Irfan): To invoke Section 41 of the Transfer of Property Act, 1882, for protection as a bona fide purchaser, one must demonstrate reasonable care and good faith. This includes taking steps such as checking the title and confirming the seller’s authority to sell the property. Reasonable care means conducting the same level of due diligence that a prudent person would in similar circumstances.

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Revocability of Power of Attorney: 2009 YLR 1688 (Muhammad Yousaf v. Irfan): If a power of attorney is declared irrevocable, it cannot be revoked unilaterally by the principal. Any sale or transfer made by the attorney under an irrevocable power of attorney is binding. Property buyers in Pakistan should ensure that any power of attorney is clearly understood and its terms are strictly adhered to before making property transactions.

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Benami Transactions: 2009 YLR 605 (Ch. Abdul Rahim v. Mst. Razia Rahim): In cases of benami transactions, the real owner (benamidar) can claim ownership if they provide evidence such as motive, source of funds, possession, conduct, and holding of title documents. Verify the true ownership of the property and avoid transactions that might be considered benami unless fully transparent and documented.

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Proper Documentation and Authority in Sales: 2009 MLD 538 (Ghulam Mustafa v. Rashid Akbar Ansari): Property Buyers in Pakistan should ensure that the seller has proper authority and clear title to the property. An agreement to sell must be valid and executed by someone with the legal right to sell the property. Lack of proper documentation or authority can invalidate the transaction.

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Dealing with Evacuee Property: 2009 MLD 1279 (Mst. Anwari Begum v. Mst. Asghari Khanum): When dealing with properties that may have been evacuee property, property buyers in Pakistan should ensure all proper documents and approvals are obtained. Evacuee properties are subject to specific legal regulations, and any transactions involving them require compliance with relevant laws and documentation.

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Purchasing Amenity Plots: 2009 CLC 1199 (Morris Tanvir v. Federation of Pakistan): Be cautious when purchasing plots designated for amenities (such as schools or parks) as these are often restricted from private sale or transfer. Property buyers in Pakistan should always verify the status of the land and ensure it is permissible for the intended use.

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Execution of Decree and Ownership Claims: 2009 MLD 375 (Sohail Farooq Shaikh v. State): At the execution stage, title documents are crucial in determining ownership, and objections to the sale of properties based on claims of independent ownership (such as a female objector owning the property before the suit) must be supported by valid title documents. Property Buyers in Pakistan should ensure that all title documents are in order and valid, especially when there are claims of third-party ownership to avoid disputes during the execution of decrees.

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Status Quo and Possession: 2009 CLC 502 (Waheed Ahmed v. Muhammad Siddique): Temporary injunctions and status quo orders can be vacated if the property is in possession of the last transferee, especially if substantial construction has been carried out. Before purchasing property, property buyers in Pakistan should verify possession and the status of any ongoing litigation to ensure the peaceful transfer and avoid disputes related to possession.

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Income Tax Implications of Sale Agreements: 2008 SCMR 510 (Commissioner of Income Tax/Wealth Tax, Peshawar v. Haroon Bilour): Sale agreements, whether registered or unregistered, do not confer legal title and thus do not automatically change ownership for tax purposes. Property Buyers in Pakistan should ensure that property transactions are properly documented and registered to avoid complications in tax assessments.

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Jurisdiction Over Evacuee Property: 2008 SCMR 312 (Elahi Bakhsh v. Muhammad Siddique): Civil courts typically lack jurisdiction to declare property non-evacuee if it has been treated as evacuee property and purchased through public auction from the Settlement Department. Property Buyers in Pakistan should confirm the status of the property as evacuee or non-evacuee before purchasing to avoid jurisdictional disputes.

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Lis Pendens and Subsequent Purchasers: 2008 SCMR 1024 (Muhammad Naeem Butt v. Shaukat Ali): The rule of lis pendens applies, meaning subsequent purchasers acquire property subject to the outcome of pending litigation. Property buyers in Pakistan should always check for any ongoing litigation involving the property and consider the implications of lis pendens to avoid future legal challenges.

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Validity of Unregistered Sale Agreements: 2008 SCMR 1018 (Mushtaq Ahmad v. Jaffar): Unregistered sale agreements can be challenged, especially if there are allegations of fraud and misrepresentation. Property Buyers in Pakistan should ensure that all sale agreements are registered and properly executed to prevent challenges to their validity.

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Protection for Bona Fide Purchasers: 2009 YLR 1688 (Muhammad Yousaf v. Irfan): Bona fide purchasers must demonstrate reasonable care and good faith, including verifying the seller’s authority and conducting due diligence. Reasonable care means taking all necessary steps to confirm the seller’s ownership and the absence of encumbrances.

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Benami Transactions: 2009 YLR 605 (Ch. Abdul Rahim v. Mst. Razia Rahim): Claims of benami transactions must be supported by evidence such as motive, source of funds, possession, and conduct. Property buyers in Pakistan should verify the true ownership and ensure transparency in transactions to avoid being involved in benami disputes.

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Grant of State Land and Government Grants Act: 2009 MLD 868 (Board of Revenue, Punjab v. Sethi Straw Boards Mills Ltd.): State land grants are governed by specific terms and are insulated from general statutory laws by the Government Grants Act, 1895. Property buyers in Pakistan of such lands should get legal advice to comply strictly with the terms of the grant to avoid nullification.

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Validity of Title Deeds and Fraudulent Transactions: 2008 SCMR 1062 (Fakir Sain alias Muhammad Sain v. Ahmad Din): Challenges to the validity of registered sale deeds, particularly on grounds of fraud, require strong evidence. Property buyers in Pakistan, should ensure that title deeds are properly executed, registered, and verified by independent witnesses to avoid challenges.

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Specific Performance and Possession Evidence: 2008 MLD 204 (Akbar v. Chaudhry Nazir Ahmad): Buyers purchasing property in Pakistan, should ensure that the seller has delivered possession and that payments are documented. Evidence such as eviction orders against tenants and receipts of payments are crucial in supporting claims of ownership. Verify that the seller has no outstanding obligations or claims against the property.

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Auction Purchases and Property Status: 2008 CLD 338 (Ms. Rahima Iqbal v. Banking Court No. II): When participating in property auctions, property buyers in Pakistan should confirm the property’s status and any encumbrances or limitations mentioned in the advertisement. Misleading advertisements can lead to forfeiture of earnest money if the property’s status is misrepresented.

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Membership in Cooperative Societies: 2008 YLR 2763 (Feroze Shamsi v. Province of Sindh): Transfer of property in a cooperative society must comply with society bylaws. However, if bylaws are inconsistent with statutory provisions like S.17-B of the Cooperative Societies Act, 1925, the statutory provisions will prevail. Property Buyers in Pakistan buying houses in Societies should get legal assistance to ensure that the transfer process and membership criteria are clearly understood and followed.

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Protection Under Section 41 of the Transfer of Property Act: 2008 MLD 993 (Mst. Shahida Khanum v. Province of Sindh): A purchaser acting in good faith, taking reasonable care to ascertain the vendor’s title, is protected under S.41 of the Transfer of Property Act, 1882. Property Buyers in Pakistan should conduct thorough due diligence to confirm the vendor’s title and ensure the vendor is continuously shown as the owner in the revenue records.

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Fraud and Misrepresentation: 2008 MLD 201 (Abu Baker v. T.J. Ibrahim): Be wary of fraudulent claims of ownership and ensure the attorney has valid and current authority to transfer property. Property Buyers in Pakistan should verify the power of attorney and its revocation status before proceeding with the purchase.

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Execution Proceedings and Outstanding Liabilities: 2008 CLC 504 (Bismillah Textile Ltd v. Habib Bank Limited): Properties sold through public auction on an “as is where is” basis refer to physical attributes, not liabilities. Property Buyers in Pakistan should  ensure all outstanding taxes and utility bills are addressed and that the advertisement explicitly mentions any liabilities.

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Pre-Emption Rights and Transfer During Litigation: 2008 CLC 332 (Muhammad Mukhtar Khan v. Muhammad Sadiq): Vendees attempting to improve their status by purchasing land during a pending pre-emption suit are not protected. Property Buyers in Pakistan should verify that no pre-emption rights or pending litigation could affect the transfer of property.

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Discretionary Relief and Registered Sale-Deeds: 2007 SCMR 687 (Muhammad Sharif v. Muhammad Anwar): Courts are likely to favour registered sale-deeds over unregistered agreements. Property Buyers in Pakistan should ensure that sale-deeds are registered and that proper inquiry is made before purchasing property to avoid challenges to the validity of the sale.

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Leasehold Rights and Government Property: 2007 SCMR 351 (Collector of Central Excise and Sales Tax v. Pakistan Fertilizer Company Ltd.): Leasehold rights, particularly from the government, must comply with the lease terms. The High Court cannot amend the terms of an Indenture of Lease without involving the necessary government authorities. Property Buyers in Pakistan should ensure compliance with all lease terms and government regulations before transferring leasehold rights.

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Bona Fide Purchaser and Proof of Purchase: PLD 433 (Haji Abdul Ghafoor Khan v. Ghulam Sadiq): The protection of a bona fide purchaser for value requires that the purchaser acts with reasonable care. Property Buyers in Pakistan should verify the title and consult with the person in actual possession to avoid disputes over ownership.

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Timely Legal Action Against Tax Recovery: 2007 SCMR 1406 (Hazara Development Authority v. District Council, Abbottabad): Ensure timely challenges to tax recovery proceedings. If taxes are not paid, authorities can auction properties. Once auction proceedings are complete and sale certificates are issued, challenging the process becomes difficult. Property Buyers in Pakistan should always include auction purchasers as defendants in any suit to challenge such auctions.

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Proof of Ownership and Documentation: 2007 YLR 1739 (Rooh-ul-Amin v. Gul Ahmad): To establish ownership in a property dispute, produce credible and consistent evidence. Plaintiffs must prove their case independently and cannot rely on the weaknesses of the defendant’s case. Property Buyers in Pakistan should ensure all sale deeds and documents are properly registered and supported by witnesses.

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Mortgage vs. Sale Transactions: 2007 CLC 1438 (Muhammad Hassan Qureshi v. Muhammad Sharif): Clearly distinguish between a mortgage and a sale transaction with a repurchase option. A mortgage by conditional sale under Section 58(c) of the Transfer of Property Act, 1882, includes conditions of repurchase and should not be confused with an outright sale. Property Buyers in Pakistan should  ensure all clauses in the agreement are clear and comply with legal requirements to avoid disputes.

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Verification of Ownership Before Registration: 2007 PLD 490 (Muhammad Hameed v. District Officer (Revenue), Lahore): The registration process should verify the ownership of the seller. Sub-Registrars, by law, do not accept sale deeds without proper ownership documentation. Property Buyers in Pakistan should ensure that all ownership documents are complete and verified before proceeding with the registration.

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Customs Duties and Bona Fide Purchasers: 2007 PTD 983 (Aman Ullah v. Customs, Central Excise and Sales Tax Appellate Tribunal, Lahore): The principle of a bona fide purchaser does not absolve one from paying customs duties, taxes, and fines. Property Buyers in Pakistan must ensure that any imported goods or vehicles have cleared all customs duties to avoid liability.

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Assessment of Property Value: 2007 PTD 512 (Messrs Shan Traders v. Income Tax Appellate Tribunal, Lahore): When purchasing property, the declared value in official transfer documents must be accurate. Any understatement can lead to additional tax assessments. Property Buyers in Pakistan should ensure the value declared matches the actual purchase price and is supported by evidence.

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Authority of Seller to Enter Agreements: 2007 PLD 449 (Humayun Mirza v. Mrs. Shahida A. Rajput): Property Buyers in Pakistan should verify that the seller has the authority to enter into agreements, especially when further agreements are made with third parties. Check for any clauses in the original agreement that allow or restrict further sales or agreements.

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Mortgage and Redemption Rights: 2007 CLD 1369 (Dost Muhammad v. House Building Finance Corporation): Mortgaged properties remain subject to recovery of loans. Property Buyers in Pakistan should confirm that all mortgage obligations have been settled before purchasing. Even if bought through a court decree, the property cannot be free from the mortgage unless redeemed.

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Ostensible Ownership and Due Diligence: 2007 YLR 2735 (Muhammad Yousuf v. Muhammad Alam Usmani): Property Buyers in Pakistan claiming protection under Section 41 of the Transfer of Property Act, 1882, must exercise reasonable care in verifying the title of the vendor. Simply relying on a general power of attorney without further investigation can lead to disputes over title. Ensure thorough due diligence and verification of all documents before purchasing.

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Ensure Detailed Documentation of Oral Sales: 2007 YLR 2729 (Muhammad Safdar v. Mirza Ehsan Ullah Bail): Oral sales must be backed by clear, detailed documentation and witness testimony. Without specific details such as the time, date, place, and witnesses, proving an oral sale is challenging. Property Buyers in Pakistan should insist on written agreements to avoid disputes.

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Bona Fide Purchasers and Burden of Proof: 2007 YLR 2689 (Muhammad Khalil v. Shabina Shehzadi): When a defendant claims to be a bona fide purchaser without notice of a prior agreement, the burden of proof shifts to the plaintiff to demonstrate otherwise. Property Buyers in Pakistan should thoroughly check for any existing agreements or claims on the property to ensure their status as bona fide purchasers.

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Value and Notice in Property Transactions: 2007 YLR 2555 (Sheikh Manzoor Ahmed v. Zulfiqar Ali): Subsequent purchasers must deny knowledge of prior agreements under oath. Plaintiffs must provide evidence that the subsequent purchaser was aware of any prior agreements. Property Buyers in Pakistan should ensure they conduct due diligence and document their lack of knowledge of prior claims.

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Gifts and Family Transactions: 2007 YLR 2530 (Mst. Rasool Bibi v. Ghulam Rasool): In cases involving family members and gifts, proper documentation and witness testimony are crucial. When gifts are contested, the burden of proof lies with the recipient to demonstrate the validity of the gift. Property Buyers in Pakistan should verify that all familial transactions are legally documented and registered.

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Effect of Pending Litigation: 2007 YLR 2471 (Sardar Muhammad v. Bashir Ahmad): Property Buyers in Pakistan  must be cautious of properties involved in pending litigation. The principle of lis pendens applies, meaning any sale during litigation could be subject to the court’s final decision. Buyers should avoid properties with ongoing legal disputes.

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Fraud and Bona Fide Purchasers: 2007 YLR 2311 (Shafaqat Ali v. Malik Muhammad Ismail): Even if a purchaser claims to be bona fide, knowledge of fraudulent transactions involving close relatives can negate this status. Property Buyers in Pakistan should investigate the background of the seller and any familial connections that could imply fraud.

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Rights of Legal Heirs: 2007 YLR 1636 (Mst. Asia Latif v. Tariq Muhammad Khan): Legal heirs have rights to property, and subsequent buyers should ensure that all heirs have been accounted for in the transaction. Property Buyers in Pakistan  must verify that all heirs have legally transferred their rights to avoid future claims.

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Validity of Sale Deeds and Fraud: 2007 CLC 1801 (Rasheed Ahmad v. Additional Commissioner (Rev.)): Property Buyers in Pakistan should verify the authenticity of sale deeds and ensure the seller’s claims are legitimate. If a seller has acquired land fraudulently, subsequent sales are also affected. Property Buyers in Pakistan should conduct a thorough title search and check the legitimacy of the seller’s acquisition.

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Due Diligence for Bona Fide Purchasers: 2007 YLR 53 (Haq Nawaz v. Makhana): Property Buyers in Pakistan must undertake proper inquiries to ascertain the genuineness of the vendor’s title. Failure to do so can disqualify the buyer from being considered a bona fide purchaser. Always perform thorough due diligence before completing a property purchase.

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Protected Title under Mortgage: 2007 CLD 1369 (Dost Muhammad v. House Building Finance Corporation): Mortgaged properties remain subject to the original mortgage until the debt is paid. Property Buyers in Pakistan must ensure that the mortgage is cleared before purchasing. Any outstanding mortgage can lead to legal complications and possible loss of the property.

Update 24th of April 2024 

Update 9th of December , 2023

Buying off-plan properties in Pakistan involves several legal and practical hazards. Legally, there’s a risk of developers not having proper approvals or land titles, leading to legal disputes. Practically, projects may face delays or not be completed to promised standards. Buyers might struggle with developers who become insolvent or misappropriate funds. Additionally, fluctuations in property values during construction can affect investment returns. To mitigate risks, we recommend due diligence on the developer’s track record, clear contractual terms, secure payment plans, and regular progress checks are advised.Another issue in offplan properties is Escalation charges by off-plan builders in Pakistan which are fees charged for increased costs during construction. This can create financial strain for buyers who may have budgeted for the original price. Furthermore, arbitration clauses often put buyers at a disadvantage as they usually favor developers, with proceedings being costly and time-consuming. These clauses can limit a buyers’ recourse to traditional courts, where they might have better chances for fair judgment.

We invite you to seek legal advice from Josh and Mak International  before committing to off-plan purchases.

Buying off-plan properties, where you purchase property before it’s fully constructed, can appear to be a lucrative investment in Pakistan. However, it comes with its own set of risks and challenges. Here are some tips to minimize legal and practical hassles, especially focusing on the importance of well-drafted contracts:

1. Research the Developer’s Background

• Track Record: Investigate the developer’s previous projects, delivery timelines, and reputation.
• Financial Health: Assess the developer’s financial stability to ensure they can complete the project.

2. Comprehensive Contract Review

• Clear Terms: Ensure the contract details the project plan, timelines, payment schedule, and specifications of the property.
• Penalty Clauses: Include penalties for delays and non-delivery. These should be substantial enough to deter the developer from defaulting.
• Exit Clauses: Have clear terms for contract termination and refund policies.

3. Approval and Permits Verification

• Legal Approvals: Verify that the project has all necessary approvals from local authorities, including land use, construction, and environmental clearances.
• NO Objection Certificate (NOC): Ensure the project has a NOC from the relevant development authority(s).

4. Site Visits and Progress Monitoring

• Regular Visits: Make periodic visits to the construction site to monitor progress.
• Progress Reports: Request regular progress reports from the developer.

5. Understanding the Area and Infrastructure

• Location Analysis: Research the area’s infrastructure, future development plans, and amenities.
• Resale and Rental Potential: Evaluate the potential for resale or renting out the property.

6. Payment Plan and Financing

• Flexible Payment Options: Negotiate a payment plan that aligns with the construction milestones.
• Mortgage Considerations: If you’re considering a mortgage, understand the terms and how they interact with your payment plan.

7. Quality Assurance

• Construction Quality: Ensure there are provisions in the contract about the quality of materials and construction standards.
• Inspection Rights: Have the right to inspect the property during and after construction.

8. Insurance and Liability

• Construction Insurance: Check that the developer has appropriate insurance coverage for the construction phase.
• Warranties: Ensure warranties for construction and fixtures are included in the contract.

9. Dispute Resolution

• Arbitration Clause: Include an arbitration clause for resolving disputes without going to court. However, in Pakistan, Arbitration clauses tend to favour the more powerful party in a contract i.e. a developer.
• Jurisdiction: Specify the jurisdiction under which disputes will be resolved.

10. Professional Assistance from Josh and Mak International. Please get in touch at [email protected] for any questions, queries etc.

Investing in off-plan properties in Pakistan can be rewarding, but it requires careful planning and due diligence. A well-written contract, along with thorough research and professional advice, is key to minimizing risks and ensuring a successful investment. Remember, the cost of expert advice is minimal compared to the cost of resolving legal issues after they arise.

Update 15th of November, 2023

There is one important case where a buyer won their case against a builder or developer imposing unilateral escalation prices or charges on them.We have set out the case note below:

Case Note: 2009 MLD 1383 Karachi-High-Court-Sindh

Citation Details

• Citation Name: 2009 MLD 1383
• Court: Karachi High Court, Sindh

Parties Involved

• Appellant: Muhammad Babar
• Opponent: Al-Asr Enterprises through Administrator

Background

This case concerns a dispute between Muhammad Babar, the appellant, and Al-Asr Enterprises, the opponent, regarding the demand for escalation charges on a flat that had been fully paid for as per the initial payment schedule agreed upon by the parties.

Legal Issue

The central issue revolves around the validity of the demand for escalation charges by Al-Asr Enterprises after the full offered price of the flat, as per the agreed payment schedule, had been received from Muhammad Babar.

Relevant Regulation

• Regulation 5.1.4: This regulation presumably pertains to the conditions under which a developer can demand escalation charges from an allottee in a property transaction.

Court’s Analysis and Findings

1. No Permission from Karachi Building Control Authority: The developer, Al-Asr Enterprises, did not obtain permission from the Karachi Building Control Authority for escalating the price of the flat, which is a critical procedural requirement.
2. Lack of Completion Certificate: Al-Asr Enterprises failed to provide a completion certificate for the flat in question.
3. Absence of Justification for Escalation Claim: The developer did not produce any evidence to justify the claim for escalation of the price of the flat. Essential documentation such as a comparative statement of costs of different building materials or inflation data from the Ministry of Finance was not presented.
4. No Witness Testimony: Al-Asr Enterprises did not examine any witness from the concerned department or construction industry to support its claim.
5. Contractual Clause Against Price Enhancement: The agreement for the sale of the flat contained a specific clause that required the developer not to enhance its price, which Al-Asr Enterprises overlooked in their claim for escalation charges.

Court’s Decision

Based on the above findings, the Karachi High Court held that the appellant, Muhammad Babar, was not liable to pay the escalation charges demanded by Al-Asr Enterprises. The court found the demand to be unjustified and invalid given the lack of necessary permissions, absence of a completion certificate, and failure to produce relevant evidence and witness testimony to support the claim. Furthermore, the agreement’s clause explicitly prohibiting price enhancement was a significant factor in the decision.

Principles and Law

The case reinforces several key legal principles in property law:

• Adherence to Contractual Terms: Parties are bound by the terms of their contract, and any deviation must be justified and within legal parameters.
• Requirement of Justification for Additional Charges: Any additional charges beyond the agreed contract price must be substantively justified with appropriate permissions and evidence.
• Procedural Compliance: Compliance with relevant authorities and regulations (like obtaining necessary permissions from the Building Control Authority) is crucial in property transactions.This decision underscores the importance of clear contractual terms and adherence to legal procedures in property transactions. Developers cannot arbitrarily demand additional charges without appropriate justification and adherence to regulatory requirements.

As far as court allowing escalation charges is concerned, here is another case where the reasoning is very unique and different:

Case Note: 2020 YLR 2306 Islamabad

Citation Details

• Citation Name: 2020 YLR 2306
• Court: Islamabad
• Appellant: Federal Government Employees Housing Foundation
• Opponent: Javaid Iqbal

Background

The Federal Government Employees Housing Foundation launched a Housing Scheme, promising delivery of apartments within two years. The brochure indicated that the cost of apartments could vary due to escalation in prices and unforeseen circumstances. Due to delays in construction, the Housing Foundation requested additional payments from the allottees. Constitutional petitions were filed, leading to arbitration.

Legal Issue

The core legal issue was the validity of charging additional amounts (escalation charges) by the Housing Foundation due to delays in construction and whether such delays and the consequent escalation charges were justifiable.

Arbitration and Court Findings

• Arbitration Award: The objections against the arbitration award were dismissed, and it was made the rule of the Court.
• Validity of Escalation Charges: The key contention was whether the Housing Foundation was justified in demanding additional amounts due to escalated costs.

Court’s Analysis

1. Default in Payment of Instalments: The court noted that the delay in construction was partly due to the default in payment of instalments by the allottees. This default was considered within the scope of “delay for some unavoidable/unforeseen circumstances”.
2. Escalated Costs: The arbitrator deemed the escalated costs mentioned in the brochure as excessive. However, the court found that comparing costs with other housing projects was erroneous because each project has unique features.
3. Terms and Conditions of the Agreement: The brochure’s terms, being part of the agreement, allowed for variations in the costs of apartments. This made the increase in costs permissible under the contract.
4. Actual Expenditure: The court emphasized that the costs of apartments were to be determined based on actual expenditure incurred upon completion.
5. Lack of Compensation Clause: The terms did not provide for compensation to allottees for delays in apartment completion.
6. Attribution of Delay: The court attributed the delay primarily to the defaulting petitioners (allottees), thus negating their entitlement to compensation for the delay.
7. Justification for Additional Amounts: The Housing Foundation, a non-profit organization, was justified in raising the demand for additional amounts due to the escalation in construction costs.
8. Surcharge on Delayed Payment: The imposition of a surcharge on delayed instalment payments was upheld.

Conclusion

The court allowed the appeal, setting aside the impugned judgment, decree, and arbitration award. The Federal Government Employees Housing Foundation was justified in demanding additional amounts due to escalated construction costs. The decision highlights the importance of adhering to contractual terms and acknowledges the implications of unforeseen circumstances and cost escalations in construction projects. The ruling emphasizes that the rights and liabilities of parties in such scenarios are governed by the specific terms of their agreement.

Comparative Analysis of Three Escalation Charges/Prices  Cases

1. 2020 YLR 2306 Islamabad

• Scenario: The Federal Government Employees Housing Foundation demanded additional payments due to escalated costs in a housing project.
• Outcome: The appeal was allowed, and the additional charges were justified.
• Reason: The court noted that the delay in construction was partly due to the default in payment of installments by the allottees, fitting within “unavoidable/unforeseen circumstances.” The terms of the agreement allowed for variations in costs, and the costs were based on actual expenditure. There was no provision for compensation to allottees for delays.

2. 2009 SCMR 1010 Supreme-Court

• Scenario: The Capital Development Authority (CDA) canceled an allotment after the Intensive Agricultural Production Project Cooperative Society Ltd. paid the majority of the installments for land allotment.
• Outcome: The Supreme Court set aside the cancellation order and directed the allottee to deposit outstanding dues.
• Reason: The act of the CDA was deemed mala fide and arbitrary. It was implied that the CDA was motivated by the escalation in land prices to cancel the allotment and sell it at a higher price. The allottee was ready to clear all dues, and there was no justification for the cancellation.

3. 2009 MLD 1383 Karachi-High-Court-Sindh

• Scenario: Al-Asr Enterprises demanded escalation charges from Muhammad Babar for a flat, even after receiving the full offered price as per the payment schedule.
• Outcome: The court ruled that the allottee was not liable to pay the escalation charges.
• Reason: The developer failed to provide necessary evidence or permissions for the escalation of the flat’s price. Additionally, the agreement included a clause that prohibited price enhancement.

Comparison

• Justification of Charges: In the 2020 YLR 2306 case, the escalation charges were justified because they were within the agreed terms and due to unforeseen delays partly caused by the allottees. In contrast, in the 2009 MLD 1383 case, the charges were not justified due to the lack of evidence, required permissions, and contractual terms prohibiting such increases.
• Contractual Agreement: The difference in outcomes largely stems from the specifics of the contractual agreements. In the 2020 case, the contract allowed for cost variations due to unforeseen circumstances, whereas, in the 2009 MLD 1383 case, the agreement explicitly prohibited price enhancement.
• Evidence and Permissions: In the 2020 case, the Housing Foundation’s demand was based on actual costs incurred, whereas, in the 2009 MLD 1383 case, the developer failed to substantiate the escalation claim with evidence or regulatory permissions.
• Intention and Fairness: The 2009 SCMR 1010 case stands out as the CDA’s actions were seen as mala fide and arbitrary, suggesting an intent to benefit from escalated land prices, unlike the 2020 case where the cost increase was a result of actual expenses incurred due to unforeseen delays.

Conclusion

The legitimacy of escalation charges in Pakistani legal context hinges on the specific terms of contractual agreements, the ability to justify additional costs with substantive evidence and permissions, and the intention behind such charges. Each case’s distinct circumstances and contractual stipulations significantly influence the judicial outcome.

Update 13th of November, 2023

Whether the escalation in the price of the suit property during the pendency of litigation should be considered a factor to deny the plaintiff a decree of specific performance?

In the Supreme Court of Pakistan’s decision in Muhammad Ashiq Khan v. Muhammad Sharif and others (2016 S C M R 1248), the Court addressed the issue of specific performance in property transactions. The key question was whether an increase in property value during litigation should impact the enforcement of a sale agreement. The Court ruled that a mere rise in value is not grounds for denying specific performance. Crucial factors included identifying the defaulting party and assessing if any party sought undue advantage. The Court emphasized that each case’s unique circumstances must be considered in totality. This decision reaffirms the principle that contractual obligations must be honored, barring default or misconduct by the party seeking enforcement.

26th of November, 2023: Overseas Pakistanis and Off-plan properties

Buying off-plan properties, where properties are purchased before they are constructed or completed, can be an attractive investment for many, including overseas Pakistanis. However, there are several factors specific to the real estate market in Pakistan that can make such investments risky. Here’s a detailed analysis of why it might not be worth buying off-plan properties in Pakistan for overseas Pakistanis:

1. Regulatory Challenges and Lack of Transparency

• Loose Regulation: The real estate sector in Pakistan has historically been loosely regulated. This lack of stringent regulatory oversight can lead to issues like fraud, project delays, or even project cancellations.
• Lack of Transparency: There’s often a lack of transparency in transactions. The absence of a standardized process for due diligence can make it difficult for overseas investors to verify the legitimacy of a project or developer.

2. Political and Economic Instability

• Economic Fluctuations: Pakistan’s economy can be volatile, with frequent fluctuations in currency value and inflation rates. Such economic instability can impact the real estate market, affecting property values and investment returns.
• Political Instability: Political unrest can lead to sudden changes in property laws, tax regulations, and other factors affecting real estate investments.

3. Delays in Project Completion

• Frequent Delays: It’s not uncommon for construction projects in Pakistan to face significant delays. These delays can be due to a variety of reasons, including financial mismanagement by developers, political issues, or bureaucratic hurdles.
• Impact on ROI: Delays can drastically affect the return on investment (ROI) as the capital of investors remains tied up for longer than expected without any return.

4. Quality of Construction

• Quality Concerns: There are often concerns about the quality of construction and adherence to promised specifications. Overseas Pakistanis might not be able to regularly monitor the construction progress, leading to a risk of substandard construction.

5. Legal Complications

• Property Disputes: Property disputes are common in Pakistan and can be complicated and prolonged. For overseas Pakistanis, dealing with these disputes from abroad can be particularly challenging.
• Fraud Risks: There are risks of encountering fraudulent schemes where developers sell the same property to multiple buyers or deviate significantly from approved plans.

6. Market Fluctuations

• Real Estate Market Volatility: The real estate market in Pakistan can be highly speculative and volatile. Prices may fluctuate significantly, influenced by factors such as political events, economic policies, and market speculation.
• Impact of Economic Policies: Changes in government policies, such as tax regulations or foreign investment laws, can unexpectedly affect the property market.

7. Lack of Due Diligence Resources

• Limited Access to Information: Being overseas, potential buyers might not have easy access to comprehensive and reliable information about the project or the developer.
• Difficulty in Physical Verification: Physical verification of the project site, legal documents, and developer’s track record is crucial but challenging for overseas investors.

8. Exchange Rate Risks

• Currency Fluctuations: Overseas Pakistanis have to consider the impact of exchange rate fluctuations when investing in Pakistan’s real estate market.
• Repatriation of Funds: There can be complications and restrictions in repatriating funds back to the country of residence, especially if the Pakistani Rupee devalues significantly.

In conclusion while off-plan property investments can offer high returns, they also come with significant risks, particularly in a market like Pakistan’s, where regulatory, economic, and political issues can add layers of complexity. For overseas Pakistanis, the distance, lack of local presence, and challenges in due diligence and legal processes further amplify these risks. It is crucial for investors to conduct thorough research, possibly engage local legal and real estate experts, and approach such investments with caution.

10th of October 2023

Legal Advisory: Arbitration Clauses in Builder’s Contracts – A Disguised Pitfall for Overseas Pakistani Private Buyers

It is no surprise that in all reported cases history of unfair practices by builders/developers in Pakistan on Escalation charges there are only a handful of judgements.The main culprit that routinely prevents  holding builders to account is the Arbitration clause which appears in standard Agreements to Sell for apartments in Pakistan.In a situation when the apartment is purchased on instalments when the building is still under construction, chances are that the private buyer will be hit by either wrong allocation of the flat (as opposed to what is promised by the eager beaver real estate agents), the project will get delayed, or an un-godly figure of arbitration costs will be imposed on buyers unilaterally demanding payment failing which the apartment will be cancelled with a sizeable deduction done on the payment so far.

Arbitration clauses, a common staple in contracts proffered by builders and developers in Pakistan, often  serve as a concealed snare for private buyers. The essence of these clauses is to channel disputes arising from the contractual relationship into arbitration, rather than traditional court litigation. While arbitration is touted for its expediency and cost-effectiveness, its application in the realm of builder contracts reveals a more sinister motive.

Primarily, the arbitral process is structured in a manner that could potentially disadvantage the private buyer, the ostensibly weaker party in the contract. The prerogative to select the arbitrator often lies with the builder or developer, engendering a scenario ripe for bias and partiality. Moreover, the inherent informality of arbitration, coupled with a lack of stringent procedural rules akin to those in court litigation, may further exacerbate the imbalance between the parties.

Furthermore, arbitration clauses in Pakistan tend to be couched in legalese that may obscure the true implications of agreeing to such a dispute resolution mechanism. The unsuspecting buyer, lured by the allure of acquiring property, may unwittingly consent to an arbitration clause, unaware of the potential prejudicial consequences.

The delay in dispute resolution is another grave concern. While arbitration is typically heralded for its speed, unscrupulous builders and developers have been known to exploit procedural lacunas to stall the arbitration process. This tactic not only prolongs the resolution of the dispute but also escalates the financial and emotional toll on the private buyer.

Additionally, the confidentiality inherent in arbitration proceedings serves the interests of the builder or developer rather than the private buyer. By shrouding the proceedings in confidentiality, unscrupulous builders are able to shield their malpractices from public scrutiny and potential legal repercussions.

In light of the foregoing, it is imperative for private buyers to exercise due diligence before acceding to arbitration clauses in builder’s contracts. Engaging competent legal counsel to meticulously scrutinize the contract, decipher the arbitration clause, and elucidate the potential ramifications is highly advisable. Furthermore, negotiating the terms of the arbitration clause to ensure a fair, transparent, and expeditious resolution of disputes is paramount.

Our esteemed law firm, Josh and Mak International, remains at the forefront in advocating for the rights and interests of private buyers. We are poised to provide the requisite legal support to navigate the intricacies of arbitration clauses and ensure a judicious contractual relationship with builders and developers.

Warmest regards,

Josh and Mak International

9th of October 2023 

Legal Alert: Plots, Flats, Apartments, Land are outside the purview of the Consumer Protection Acts of Pakistan

A lot of queries have been coming in about whether developers and builders can be taken to consumer court for disputes related to real estate such as plots of land, apartments, and flats. To clarify this position, below are three distinct cases from the Lahore High Court underscore the legal boundaries surrounding Consumer Courts’ jurisdiction over real estate matters. Through these cases, it becomes evident that real estate disputes do not fall within the purview of the consumer courts of Pakistan.

In the case of Bahria Town (Pvt.) Ltd. versus District Consumer Court, Rawalpindi (2022 PLD 488 Lahore High Court), the petitioner challenged the dismissal of its application concerning the sale and purchase of plots. The core issue revolved around the delivery of possession of the plots, which was hindered due to non-payment of possession charges by the respondent. The Court elucidated that the purchase of plots could neither be classified as a ‘product’ under Section 2(j) of the Punjab Consumer Protection Act, 2005 nor as ‘services’ under Section 2(c)(ii) of the same Act. This distinction was further bolstered by aligning the definition of ‘goods’ from the Sale of Goods Act, 1930, which excluded ‘land’. The case highlighted that disputes emerging from contractual obligations concerning real estate should be directed towards Civil Courts under the Specific Relief Act, 1877, instead of Consumer Courts.

Similarly, in Yasir Chaudhry versus Faisalabad Development Authority (2021 PLD 713 Lahore High Court), the appellant sought development facilities in a housing scheme, invoking the jurisdiction of the Consumer Court. The Court, delineating the term ‘product’, reiterated that it predominantly pertains to movable property, and ‘land’ is expressly excluded from ‘goods’ under the Sale of Goods Act, 1930. It emphasized that for a claimant to qualify as a ‘consumer’, the purchase or lease of a product or the hiring of services from a service provider for a consideration is requisite. The jurisdiction of Consumer Courts was asserted to be distinct from Constitutional Courts, thus, nullifying the claim of the appellant in a Consumer Court regarding development facilities in a housing scheme.

In a preceding case, Muhammad Ameer Qazi versus Muhammad Asif Ali (2015 PLD 235 Lahore High Court), the appellant contested the order of the Consumer Court concerning the purchase of property. The contention was based on the jurisdiction of the Consumer Court in matters of immovable property. The Court accentuated that to be deemed a ‘consumer’, hiring “services” from a “service provider” for a certain consideration is essential. The dispute in question was identified as a breach of contract concerning the sale and purchase of plots, a matter to be adjudicated by Civil Courts, not Consumer Courts. The ruling underscored that disputes over immovable property cannot be morphed into consumer disputes as they do not involve the sale of goods or services for consideration.

These cases collectively delineate a clear demarcation in the jurisdiction of Consumer Courts concerning real estate disputes in Pakistan. They assert that disputes related to the sale, purchase, or development of immovable property like plots, apartments, or flats are to be adjudicated within the realm of Civil Courts, aligning with the provisions of the Specific Relief Act, 1877, and not under the ambit of Consumer Courts as per the Punjab Consumer Protection Act, 2005.

5th of October 2023

An Examination of Real Estate Laws in Pakistan

The real estate sector in Pakistan, akin to other nations, operates within a legal framework set forth by various legislations. A prominent concern, however, is the limited accessibility of these laws for the consumers, making it challenging for them to navigate through real estate transactions confidently and securely.

The regulation of real estate trade and profession across Pakistan calls for a uniform implementation, yet the applicable laws differ from region to region. For instance, Islamabad Capital Territory adheres to the Islamabad Real Estate Agents and Motor Vehicle Dealers (Regulation of Business) Ordinance, 1984, while Punjab follows a separate ordinance dated 1980. As per the Constitution of Islamic Republic of Pakistan, 1973, the mandate for regulating any trade or profession rests with the Parliament/Majlis-e-Shoora, not the provincial assemblies, thus highlighting a discrepancy in the legislative framework governing the real estate sector.

Taxation laws concerning individual business transactions on different lands vary as well. Capital gains tax falls under the purview of the Income Tax Ordinance, 2001, while the capital value tax on immovable property is legislated by the provinces post the 18th Amendment in the Constitution, and in Islamabad Capital Territory by the Finance Act, 2012.

In a significant move, the Securities and Exchange Commission of Pakistan (SECP) enforced the Real Estate Investment Trusts Regulations (REITs), 2015, introducing the concept of real estate investment trusts. Amended in December 2018, these regulations now include provisions regarding private investors, eligibility criteria to invest in REIT scheme, and enhanced borrowing capacity for REIT Management Companies (RMCs), among other changes, aiming to protect and empower the investors.

The real estate sector operators have often flourished in a regulatory vacuum, with inefficient revenue machinery, leading to grave financial losses for many individuals. The sector has long battled with credibility issues due to unfair business practices, weak transparency, and limited financial inclusion. The government’s initiative last year to introduce capital value tax and revised valuation of properties ended in a tax amnesty, further elucidating the regulatory challenges.

An overwhelming number of housing schemes continue to operate under the Cooperatives Societies Act of 1925 or specific acts of parliament for various development authorities such as CDA, KDA, and DHA, each with its own set of governing by-laws. The key regulators – the State Bank of Pakistan (SBP) and the SECP – have been urging the government to devise an overarching legal framework to regularise these investors within the formal economy.

The Unfortunate Story of Section 456 of the Companies Act 2017 

In response, the government incorporated section 456 in the Companies Act, 2017, mandating companies to obtain clearance from the SECP prior to announcing any real estate project or accepting finances from the public.However it was declared as ommited by the Companies Ordinance 2020.There is news that this omission may have been subsequently rejected by the Parliament but we have not been able to find documentary proof of this rejection. Currently, the position is that either (1) Section 456 stands committed by  This move aimed to bring about more transparency and accountability within the sector, ensuring that companies comply with the necessary approvals and disclosure requirements before proceeding with real estate projects.

 Section 456 of the Companies Act, 2017, when it was annouced was a noteworthy addition, as it delineates the necessity for companies to adhere to a set protocol before engaging in real estate projects. This included obtaining approvals from SECP and other concerned authorities, making requisite disclosures, and following an orderly process for accepting advances or deposits against bookings to sell or offer real estate. The section also mandated the maintenance of specific books of account and the deposition of sums obtained from allottees in a separate escrow account designated for the project, ensuring structured financial management and adherence to SECP-directed accounting frameworks.

It’s noteworthy that the enforcement of section 456 pertaining to real estate sector, although encapsulated in the new Company Law administered by the Securities and Exchange Commission of Pakistan since 30th May 2017, was decided to be notified at a later date even back in 2017. This potentially signified a phased approach towards regulating the real estate sector but it was unfortunately repealed very quietly in the year 2020 by Companies Ordinance 2020. It’s current status is very ambiguous and there is very little information available on it.It is safe to state that the provision never came into effect or was implemented overall.

There were several problems with Section 456 and the most glaring problem would be that the majority of Builders and Developers in Pakistan are not

Adding to the legislative compendium are other laws governing the sale and purchase of real estate, such as The Registration Act, 1908; The Stamp Act, 1899; The Land Revenue Act, 1967; and The Transfer of Property Act, 1882. These acts collectively contribute towards defining the legal framework for property registration, transaction validation through stamp papers, land revenue collection, and property transfer procedures. The nuanced details provided within these acts help in guiding individuals through the legal processes involved in real estate transactions.

On a broader spectrum, federal and provincial legislatures have established various Development Authorities to oversee land utilisation and policy formulation concerning housing, industrial development, and other urban planning aspects. Authorities like the Lahore Development Authority, Capital Development Authority, Faisalabad Development Authority, and Karachi Development Authority are constituted under respective legislation, each bearing its mandate at the division level.

One of the intriguing aspects within this regulatory framework is the dual role of Development Authorities. They act as regulators for their respective jurisdictions, and they also have the authority to venture into real estate sectors for profits. This dual role presents an inherent flaw, as the regulator also operates as a player within the same sector it is supposed to regulate. This conflict of interest has been pointed out by stakeholders during public hearings, reflecting a broader concern within the industry.

 Given the intricate and regionally diverse legal framework governing real estate in Pakistan, it is crucial for overseas Pakistanis and foreigners to exercise due diligence and proceed with caution when considering property purchases or investments in the country.

Here’s a comprehensive list of cautions:

• Legal Consultation:
  • Engage our legal services to help you interpret the various laws and regulations that may apply to your situation. We can be reached at [email protected] 
• Regional Laws and Regulations:
  • Be aware that different regions and provinces within Pakistan have distinct laws and regulations governing real estate. Ensure that you are compliant with the laws applicable in the specific region where you intend to purchase or invest.
• Title Verification:
  • Conduct a thorough title verification to ascertain the legal ownership of the property. It’s essential to ensure that the seller has a clear title to the property to avoid legal complications later on.
• Approval from Relevant Authorities:
  • Ensure that all necessary approvals, permissions, and NOCs (No Objection Certificates) from relevant authorities have been obtained for the property or real estate project you are interested in.
• Tax Implications:
  • Be knowledgeable about the tax implications involved in property transactions, including capital gains tax, capital value tax, and other provincial or federal taxes.
• Development Authorities’ Regulations:
  • If the property is within a jurisdiction governed by a Development Authority, ensure adherence to the rules and regulations stipulated by that authority.
• Verification of Project Approvals:
  • In the case of investing in real estate projects, verify that the project has received all necessary approvals and permissions from the concerned authorities.
• Contractual Agreements:
  • Have clear and legally binding contractual agreements in place. Ensure that all agreements are properly documented, stamped, and registered as per Pakistani law.
• Awareness of Regulatory Changes:
  • Stay updated on any regulatory changes or amendments in real estate laws that may impact your investment. This includes keeping an eye on proposed bills like the Real Estate Regulatory Authority Bill.
• Consumer Protection Rights:
  • Familiarise yourself with your rights as a consumer in the real estate sector to ensure that you are not being subjected to unfair business practices.
• Avoiding Conflict of Interest:
  • Be cautious of potential conflicts of interest, especially in situations where Development Authorities are both regulators and market players in the real estate sector.
• Foreign Exchange Regulations:
  • Comprehend the foreign exchange regulations governing the remittance of funds for property transactions to avoid any legal or financial complications.
• Regulatory Disorganization:
  • Be aware of the lack of a national level sector regulator which leads to fragmented regulations across various stages of real estate development. This fragmentation extends from transactions and transfer of land to taxation, each governed by different regulatory bodies at Federal, Provincial, District, and Tehsil levels.
• Lack of Coordination Among Authorities:
  • Note the lack of synchronization among various authorities involved at different stages of development, creating loopholes that can be exploited, resulting in issues like land encroachments, scams, and mismanagement of processes.
• Enforcement and Revision of Existing Laws:
  • Be cautious of the weak enforcement and lack of revision of existing laws governing the real estate sector, leading to lax monitoring and evaluation of developments.
• Prolonged Litigation and Dispute Resolution:
  • Understand that the legal system can be slow and cumbersome with no dedicated courts or reputable forums for alternate dispute resolution in real estate matters.
• Inaccurate Land Records and Mutation System:
  • Ensure thorough verification of land records as inaccuracies and insufficient data can hinder the mutation or transfer of property, leading to issues like multiple sales of the same property and over-pricing.
• Absence of Professional Urban Planners:
  • The role of urban planners is crucial for systematic development, yet their absence or lack of updated skills may lead to unsuitable use of land and non-compliance with planning by-laws.
• Lack of Level Playing Field for All Market Players:
  • Be wary of the high entry barriers and discriminatory practices prevalent in the sector, especially where development authorities act both as regulators and market players.
• Failure to Fulfil Commitments:
  • There have been instances where both public and private entities fail to fulfil their commitments regarding the handover of properties or completion of projects.
• Lack of Market Information:
  • The absence of a systematic collection and dissemination of real estate market information can hinder informed decision-making.
• Unorganized Real Estate Agents:
  • Real estate agents play a crucial role, yet lack of regulation and certification can lead to fraudulent practices.
• Absence of Professional Support Services:
  • The lack of access to professional real estate services such as valuation and property management can pose challenges.
• Deceptive Marketing Practices:
  • Be cautious of deceptive marketing practices prevalent in the sector, including false advertising and fraudulent claims regarding property details and payment terms.
• Vulnerable Consumer Rights:
  • Consumer rights are often compromised due to lack of strict regulatory oversight and complex land record registration systems.
• Failure of Investors to Conduct Market Research:
  • Conduct thorough market research and due diligence before investing to avoid falling victim to scams and fraudulent schemes.
• Obstructive Business Environment:
  • Be aware of the challenges posed by an obstructive and unfavorable business environment, including unsuitable tax policies and lack of financial facility providers.

Each of these cautions reflects underlying systemic issues within the real estate sector in Pakistan, and addressing them requires a multifaceted approach including legal, regulatory, and institutional reforms.

1st of October 2023

This legal note looks at judicial attempts made to regulate Pakistan’s Real Estate Sector

In recent years, Pakistan’s judiciary has showcased a proclivity towards nudging the regulatory frameworks governing real estate agencies and developers towards a more structured and transparent paradigm. Through various judicial pronouncements, the courts have highlighted the exigency of a regulated real estate sector to protect the rights and interests of stakeholders. This article delves into a few  significant cases that reflect this trend.

(!) In the case of Mst. Jaiwanti Bai v. Amir Corporation, 2021 PLD 434 Supreme Court, the apex court spotlighted the ubiquitous practice of forward contracts in the real estate sector. The Court observed that investors often book apartments or shops in advance, even before the execution of a sublease, and engage in multiple forward sales before the final sublease comes into existence. Traditionally, these transactions are evidenced through a tripartite arrangement involving the allottee, forward purchaser, and the builder. The Court emphasized the unregulated nature of such contracts in Pakistan and voiced the necessity for regulation to safeguard the rights and interests of all parties involved.

(2) Segueing to the realm of deceptive marketing practices, the Competition Commission of Pakistan (CCP) took the center stage in the case of Vision Developers (Private) Limited, 2018 CLD 350. The CCP, responding to allegations of deceptive marketing by Vision Developers for their “Park View Villas Scheme”, initiated an inquiry. The Developers contended that the CCP lacked jurisdiction over real estate matters, asserting that such issues fall under the purview of the Lahore Development Authority (LDA) as per the Lahore Development Authority Act, 1975. The Commission, however, refuted this contention, underscoring its mandate to probe deceptive marketing practices under the Competition Act, 2010. The Court upheld the Commission’s jurisdiction, thereby reinforcing the imperative of ethical marketing practices in the real estate sector and highlighting the role of the Competition Commission in ensuring the same.

(3) The case of Bahria Town v. Government of Punjab, 2018 SCMR 1864, unveils a tapestry of legal considerations surrounding encroachments on forest land by real estate developers. The Supreme Court, while deciphering the conundrum of land demarcation between Bahria Town and the Forest Department, underscored the importance of accurate demarcation and the role of respective authorities in preserving the sanctity of public land. The case also drew attention to the perils of encroachments and underscored the necessity of stringent regulatory oversight to prevent such infractions.

(4) In Farrukh Shahzad v. Commissioner Inland Revenue (Legal) RTO, Rawalpindi, 2018 SCMR 1375, the Supreme Court explored the application of Capital Gains Tax (CGT) on the sale of immovable property. The petitioner contended that as per Section 37(1)(A) of the Income Tax Ordinance, 2001, he was not liable to pay CGT since the property in question was bought in 2008 and sold in 2013. The tax department, however, provided evidence that the petitioner had been engaged in the real estate business for many years before 2014, thus denying him the benefit of zero percent CGT. This case underscored the necessity of clear evidence to claim exemptions and highlighted the tax implications surrounding real estate transactions.

(5) The Supreme Court’s decision in Application for Release of Funds to be paid by Bahria Town to the Government of Sindh Pursuant to Order Dated 21.3.2019, 2020 SCMR 2122, showcased a scenario where a private real estate developer’s illegal land adjustments led to a hefty settlement offer of Rs. 460 billion. The court’s decision to establish a high-powered Commission to oversee the disbursement of these funds accentuated the need for transparent mechanisms in real estate dealings and the judicial resolve to rectify unlawful practices.

(6) In the case of Pak Gulf Construction Company (Pvt.) Ltd., Islamabad v. Federation of Pakistan through Secretary Finance, Ministry of Finance, Islamabad, 2020 SCMR 146, the Supreme Court delved into the practice of in-house transfer of immovable property at private real estate developers’ offices. The court acknowledged the evolving methodologies of property transfer, especially by cooperative housing societies and private companies, aimed at avoiding transactional costs, taxes, and duties. The judgement underlined the obligation of such entities to collect Capital Value Tax from purchasers and deposit it with the Federal Government, thus casting a duty on private real estate entities to adhere to tax obligations.

(7) In  Pak Gulf Construction Company (Pvt.) Ltd., Islamabad v. Federation of Pakistan, 2020 PTD 336, the Supreme Court of Pakistan was drawn into a discourse surrounding the collection of Capital Value Tax (CVT) on in-house sale/purchase/transfer of immovable property at private real estate developers’ offices. The apex court underlined the obligation of private real estate entities to collect CVT from purchasers and deposit it with the Federal Government, thus bringing to light the evolving methodologies of property transfer aimed at avoiding transactional costs, taxes, and duties. This ruling emphasized the importance of adhering to tax obligations and hinted at the larger issue of tax evasion in real estate transactions.

(8) In another landmark case, Tariq Mehmood v. Punjab Overseas Pakistani Commission, 2020 PLD 49, the Lahore High Court addressed the grievances of an overseas Pakistani entangled in a fraudulent real estate transaction. The court reinforced the inalienable rights of every citizen, including overseas Pakistanis, under the Constitution to acquire, hold, and dispose of property. It directed the Commission to scrutinize the complaint and, if valid, refer it to the concerned government agency for redressal within a stipulated timeframe. This case spotlighted the plight of overseas Pakistanis in real estate dealings and the judicial resolve to safeguard their rights.

(9) The case of State v. Adeel Butt, 2021 PCrLJ 799, before the Peshawar High Court, revolved around accusations of cheating the public by luring them to invest in real estate, causing a substantial financial loss. However, due to lack of substantial evidence, the accused were acquitted, highlighting the murky waters of real estate investments and the need for robust evidentiary frameworks to hold fraudulent individuals accountable.

(10 In the case of Afsar Khan v. State, 2020 MLD 1534, before the Karachi High Court, veered into a grim territory where a real estate-related venture turned fatal. The lack of substantial evidence led to the acquittal of the accused, underscoring the imperative for a more transparent and legally compliant real estate sector to ensure the safety and security of all stakeholders involved.

(11) In the case of Pakistan Medical Cooperative Housing Society v. Azra Latif (2012 CLC 662), the Islamabad High Court delved into the dispute between a cooperative housing society and an individual regarding the cancellation of membership and allotment of a plot. The court found the society’s actions to be propelled by ulterior motives, evidenced by the return of the respondent’s cheque and the cancellation of her membership. The judgement showcased the misgivings and dubious conduct of the society’s management committee, which was depicted as bearing a grudge against the respondent. The court highlighted the essential principle of audi alteram partem (hear the other side) which was overlooked by the society, thereby undermining the respondent’s rights. This case underscored the judiciary’s stance on ensuring fair treatment and adherence to procedural justice by housing societies, which are expected to act as custodians of members’ rights rather than engaging in actions reminiscent of property dealers and real estate agents.

(12) On a similar note, Syed Shahid Aleem v. Pakistan Defence Officers Housing Society (2005 CLC 1624) before the Karachi High Court, brought to light the overreach of a housing authority in prescribing qualifications for real estate agents operating within its jurisdiction. The court found the authority’s actions to be ultra vires and in violation of constitutional provisions (Arts. 4 and 18) pertaining to the freedom of trade and the right to be treated in accordance with the law. The judgement stressed that the authority’s regulations should be confined to the administration and management of its affairs rather than extending to the regulation of real estate agents’ business. This decision reverberated the importance of adhering to the ambit of delegated legislation and refraining from encroaching upon the domain of other individuals or entities not governed by the authority.

These judgements collectively paint a picture of the judicial endeavour to maintain a balance between administrative autonomy of real estate entities and the protection of individuals’ rights. They echo the need for a more structured and lawful framework within which real estate transactions and memberships in housing societies are conducted, thereby fostering a sense of trust and legal certainty among the stakeholders involve

27th of September 2023

Cautionary Advisory: Be Vigilant of Unfair Contractual Clauses and Practices When Dealing with Builders and Developers in Pakistan

Esteemed Overseas Pakistani Clients,

As an individual striving to secure a tangible asset in Pakistan, it’s imperative to exercise due diligence especially when dealing with builders, housing schemes, and developers. A myriad of unfair practices have been observed by us in our law practice, which often lead to financial loss and undue stress. Below are some of the critical issues you should be wary of:

1. Hidden Costs: Often, the price initially quoted does not reflect the actual cost. Additional charges such as development fees, utility connection fees, and other miscellaneous costs may emerge later on.
2. Escalation Costs: Builders may incorporate clauses that allow them to increase the price in response to unforeseen circumstances (force majeure) or rising material prices. It’s crucial to have a clear understanding and agreement on how escalation costs are calculated and capped.
3. Arbitration Clauses: Some contracts include arbitration clauses aimed at avoiding court accountability. While arbitration can be quicker and less formal, it may also pressure consumers into accepting unfavourable terms.
4. Delayed Progress: Delays in construction and handover are common. It’s advisable to have a well-defined timeline with penalties for delays included in the contract.
5. Refusal to Refund or Buy Back: Some developers may refuse to refund or buy back properties without heavy deductions despite prior agreements. Ensure that the refund and buy-back terms are unequivocally defined.
6. Deceptive Promises: Often, promises made on booking forms are contradicted in the subsequent Agreements to Sale. It’s vital to ensure that all promises are duly reflected and protected in the final agreement.
7. Building Costs: Be aware that building costs might increase due to various factors. Have a clear agreement on what costs are fixed and which ones are variable.

To protect yourself from such unfair practices:

• Engage a Legal Expert: Before signing any document, it’s wise to consult with a legal expert familiar with Pakistani property law.
• Thoroughly Review All Documents: Ensure you thoroughly review and understand all contractual documents. Any discrepancies between verbal promises and written agreements should be clarified and amended.
• Negotiate Fair Terms: Don’t hesitate to negotiate terms that protect your interests, including a clear definition of the scope of work, total cost, payment schedule, and timeline for completion.You do not have to sign the standard contract imposed upon you by

Remember, a well-informed decision can save you from potential financial and legal hassles. Our law firm, Josh and Mak International, is at your service to provide the necessary legal guidance and support in navigating the complexities of property transactions in Pakistan.

Warmest regards,

Josh and Mak International

25th of August 2023 

A note for overseas Pakistanis and Foreigners Problems with the Pakistani Real Estate Sector 

The burgeoning real estate sector in Pakistan has become a nexus of economic activity, attracting a multitude of stakeholders from various walks of life. However, with growth comes a plethora of legal hurdles that stakeholder groups such as customers, investors, builders, property developers, real estate agents, and others face on a daily basis. The bureaucratic structure governing the real estate sector, comprising public, semi-government, and private entities, often tends to complicate rather than simplify the process of real estate transactions and development.

Among the public sector entities, Development Authorities like the Capital Development Authority (CDA), Lahore Development Authority (LDA), and Karachi Development Authority (KDA) are pivotal in ensuring structured urban development across major cities. These authorities also bear the responsibility of regulatory oversight within their jurisdictions. However, the multiplicity of roles, being a developer and a regulator, especially in the case of LDA, has often led to allegations of conflict of interest and anti-competitive behaviour. This dual role has been pointed out as being detrimental to the private developers who have to navigate through a stringent regulatory framework while competing with projects undertaken by these authorities.

The semi-government sector, characterized by cooperative housing societies formed under the Cooperative Societies Act, also contributes to the real estate development. These entities, albeit with a blend of public and private characteristics, add another layer to the complex regulatory landscape.

On the other hand, the private sector has emerged as a major player in addressing the housing demand in Pakistan. Yet, it has to grapple with an array of legal and procedural issues, starting from land acquisition, approval of master plans, to adherence to various development standards. Private entities often find themselves at a disadvantage, especially when competing with public sector projects that enjoy certain exemptions and benefits.

The narrative further extends to the legal issues faced by consumers and investors who are often at the receiving end of fraudulent practices rampant in the sector. From being lured into investing in illegal housing schemes to falling prey to deceptive advertising and marketing claims, the stakeholders find themselves mired in a quagmire of legal disputes. The lack of clear and precise information at the outset, coupled with the absence of a streamlined regulatory framework, exacerbates the woes of the investors.

Real estate agents, too, are part of this convoluted system, often being accused of aiding and abetting in the sale of fraudulent projects. The call for stricter regulation, licensing, and certification of real estate agents is a testament to the necessity for a more transparent and accountable real estate sector.

A notable point of contention arises from the delayed completion of projects and unilateral imposition of Escalation Charges by developers and housing schemes alike, a widespread practice that leaves investors hanging, even after making all due payments. This delay often transcends into a loss of trust and financial hardship for the stakeholders involved.

The discussion on legal issues would be remiss without mentioning the environmental considerations that come into play, especially with the development of high-rise buildings. The need for a thorough assessment of environmental impact, infrastructure, and utility provisions is a topic that holds significant legal and societal implications.

Moreover, the notion of price fixing among developers and dealers, as highlighted, hints at a deeper-rooted issue of market manipulation, which not only violates the principle of fair competition but also has severe legal ramifications.

In light of the complexities and multifaceted legal issues, there’s a clamour for a more structured, transparent, and streamlined regulatory framework that can address the concerns of all stakeholders involved in the real estate sector of Pakistan. Establishing a national level authority to oversee the real estate sector, revisiting and revising outdated laws, and ensuring a level playing field for both public and private sector entities are steps that could pave the way towards a more organized and legally compliant real estate sector.

The real estate sector’s potential as a major contributor to Pakistan’s economy hinges on the ability of the legal framework to evolve and adapt to the changing dynamics, ensuring protection of stakeholders’ interests while promoting sustainable development.

Furthermore, the documentation, a crucial aspect of real estate transactions, often becomes a point of contention. Many housing schemes tend to provide mere allotment letters as opposed to actual registry, thereby leaving the buyers in a legal limbo regarding the ownership and possession rights. This practice not only invites future disputes but also underscores the lack of transparency and accountability in the sector.

Fraudulent practices such as multiple sales of a single property and the launch of housing schemes on encroached lands are among the myriad of fraudulent activities plaguing the sector. These activities not only tarnish the reputation of the sector but also deter potential investors, thus impeding the growth of the real estate market in Pakistan.

The emergence of online platforms for real estate transactions has also brought with it a new set of challenges. Deceptive claims and fraudulent practices have now permeated the digital realm, making it imperative for a robust legal framework to govern online real estate transactions and advertising.

The role of development authorities, as elucidated in the text, is pivotal but often seen as lacking in effectiveness and timeliness. There’s a glaring need for these authorities to act proactively to curb illegal schemes before substantial investments are made. Moreover, the responsibility of ensuring the provision of basic utilities, a common point of grievance among investors, also falls under the purview of these authorities.

The legal disputes emanating from real estate transactions often find their way to the courts, adding to the already backlogged judicial system. The slow pace of legal redressal not only frustrates the aggrieved parties but also underscores the necessity for an alternative dispute resolution mechanism tailored for the real estate sector.

Moreover, the lack of a unified national regulatory authority overseeing the real estate sector contributes to the disjointed regulatory framework. The suggestion to establish such an authority, as well as provincial and local bodies, reflects a demand for a more centralized and streamlined regulatory approach.

The concept of converting massive projects into public limited companies is an interesting proposition aimed at safeguarding investors’ interests, especially in scenarios where a major partner of a private entity passes away, thus leaving the project in a state of uncertainty.

Additionally, the concerns raised by the Association of Builders and Developers of Pakistan (ABAD) regarding the alleged anti-competitive practices by development authorities like CDA, LDA, and KDA, highlight the inherent challenges faced by private sector developers. The grievances range from the non-fulfilment of land possession to the onerous requirements imposed on private developers as compared to their public sector counterparts.

In conclusion, the legal quagmire surrounding the real estate sector in Pakistan necessitates a holistic approach to reform. Addressing the legal challenges requires a concerted effort from the government, the judiciary, and the stakeholders within the real estate sector. The establishment of a clear and enforceable legal framework, coupled with the promotion of transparency, accountability, and fair competition, will be instrumental in steering the sector towards a path of sustainable growth and development.

25th of July 2023

A Critical Evaluation and Reform Proposal for Pakistan’s Real Estate Sector

Introduction:

Pakistan’s real estate sector has long been considered a promising area of investment. However, a deep dive into the existing legal framework reveals a plethora of issues that hinder the growth and fair operation of this sector. Despite its potential to contribute significantly to the economy, the sector remains embroiled in legal quagmires, outdated laws, and a lack of uniform regulatory mechanisms. This blog aims to shed light on the existing laws governing the real estate sector in Pakistan and propose appropriate amendments to foster a conducive environment for both investors and consumers.

Lack of Uniform Regulatory Framework:

One of the core issues plaguing the real estate sector is the lack of a uniform regulatory framework. The existing system, where development authorities such as LDA, CDA, FDA, and GDA act both as regulators and economic players, creates a conflict of interest. These authorities, while mandated to regulate, launch their own housing schemes thus becoming competitors in the market they are supposed to regulate. This duality not only compromises fairness but also makes the complaint resolution mechanism inherently discriminatory.

Outdated Laws and Minimal Penalties for Real Estate Agents:

The laws concerning the registration and regulation of real estate agents are outdated with minimal penalties, rendering them ineffective. The current framework allows complaints against non-compliant agents only by the registering authority, leaving consumers without a remedy. Revising these laws, enhancing penalties, and entrusting a proposed regulator with the task of registering real estate agents could bridge this legal void.

Obsolete Land Acquisition and Transfer Laws:

The Land Acquisition Act, 1894, and Transfer of Property Act, 1882, are remnants of the pre-independence era, ill-suited to modern market dynamics and consumer rights. A revamp of these laws in line with the fundamental rights enshrined in the Constitution is imperative to protect consumers and streamline property transactions.

Inordinate Delay in Dispute Resolution:

The sluggish pace of dispute resolution in real estate matters exacerbates consumer woes. Despite recommendations for expeditious disposal of cases through the National Judicial Policy, effective implementation remains elusive. Introducing amendments for a time-bound resolution of disputes, perhaps within six months to a year, by special tribunals or courts could alleviate this issue.

Conclusion:

The discourse surrounding the real estate sector in Pakistan unveils a sector fraught with legal and regulatory challenges. From the acquisition of land to its development and conversion into commercial entities, each stage is mired in legal complexities. The division of regulatory responsibilities between federal and provincial governments, coupled with a lack of a focused national policy, has allowed a mushrooming of projects with scant regard for legal compliances. The existing legal framework has failed to keep pace with the evolving sector, leaving the public and commercial investors vulnerable to fraud and other malpractices. A robust, uniform, and modern legal framework is the need of the hour to reign in the rampant irregularities, protect stakeholders, and unleash the full potential of the real estate sector in Pakistan. Through meticulous legal reforms and vigilant regulatory oversight, Pakistan can hope to build a real estate sector that stands on the bedrock of legal integrity and fair play.

20th of July, 2023

Important Message for Overseas Pakistanis: Beware of Online Misinformation Regarding Property Tax

It has come to our attention that there is a lot of misinformation circulating online, falsely claiming that the tax on property purchase by Overseas Pakistanis has been abolished. We want to clarify that this information is 100% false and misleading. The proposal to abolish this tax was part of the Finance Bill 2023, but it did not pass into law as it was not included in the Finance Act 2023. The amount of queries we have had in this regard so far are alarming and shows how misinformation spreads like fire on the internet and social media.

We urge all Overseas Pakistanis to be cautious and verify the credibility of any claims made by online bloggers and self-proclaimed real estate experts. Please rely on official and legitimate sources for accurate information regarding tax regulations and property purchases.

As of now, the applicable tax rate for property purchase by Overseas Pakistani filers and non-filers is the same i.e. 3% Advance tax, provided their payment mode and tax residency status qualify for the Overseas Pakistani status.

Please refrain from promoting or spreading this misinformation, and always seek reliable sources for any updates on tax laws and regulations. Let us all work together to ensure accurate information dissemination and avoid any confusion or false expectations.

Edit 4 (July 2023):

Based on the recent influx of queries at our law firm, following the Finance Act 2023, we would like to provide further clarification. As stated previously, an overseas Pakistani purchasing a property in Pakistan is required to pay an advance tax of 3%, regardless of their filer or non-filer status. However, we have observed that many individuals traveling to Pakistan from overseas, who do not have a Pakistani account, are being pressured to close deals with property sellers and agents hastily.

Such overseas Pakistanis are often being advised  to transfer their funds from abroad into a property dealer’s bank account in Pakistan or a relative’s bank account. However, this arrangement presents several issues including a massive legal risk as we will discuss here.

Firstly, if you opt for this method, your transaction will not qualify as an overseas Pakistani transaction, and you will not be able to enjoy the benefits under section 236K of the Income Tax Ordinance. To qualify for these benefits, you must make payments through a Pakistani PKR account (such as a Roshan Digital account) or a Pakistani foreign currency account.

If you decide to pay through a local Pakistani’s account by transferring your overseas cash to them and also choose to make a partial payment in cash (which is common nowadays), you will face the following legal consequences:

1. The Pakistani relative or property dealer will have to pay the advance tax on their own account if they cannot provide a legitimate reason for paying on your behalf. This is unless you have a prior agreement with them to make the payment.
2. You will not be classified as an overseas Pakistani, and if you are also signing the agreement as a non-filer, and it is proven that the relative or property dealer paid on your behalf, you will be subject to a 10% advance tax under the Income Tax Ordinance 2023, as updated by the Finance Act 2023. In this case, it is advisable to become a filer, which means the rules applicable to ordinary Pakistani residents will apply to you, including a 3% advance tax payment on the purchase.
3. If the property dealer or relative absconds with your money, as unfortunately happens frequently in Pakistan, you will have no way of proving that you provided them with cash to make the payment on your behalf. Cash transactions are risky, untraceable, and can potentially result in significant problems with the Federal Board of Revenue (FBR) if they initiate an investigation into the source of your property payment.
4. Your status as an overseas purchaser of property is also influenced by the duration of your stay in Pakistan at the time of purchase, as defined in the Income Tax Ordinance 2001 regarding tax residency.

We strongly advise you to make informed decisions and pay close attention to the wording of section 236K of the Income Tax Ordinance and its related legislation.

Income Tax Withholding Rates for Pre Sale/Purchase

For Tax Year 2023-2024

 Following are the tax rates for every sale/purchase of property for in  tax year 2023-2014

Note:

Deemed Income is 5% of Fair Market Value of the property having valuation exceeding Rs. 25,000,000/-

Tax under Section 7E could be calculated in any of the following manner:

Method

FMV of Property                                                                               30,000,000

Deemed Income (5% of  30,000,000)                                            1,500,000

Tax on Deemed Income (20% of 1,5000,000)                 300,000

Important Note:

Please be informed that as per Finance Act, 2023-2024, every seller is liable to pay tax under section 7E before any other tax i.e., 236C. Registering authority shall not register the sale or complete transfer process until tax under section 7E has been paid and payment proof is submitted to the transfer registering authority.

Please feel free to reach out to us for any further guidance or clarification on these matters. Our dedicated team is available to assist you.

Best regards,

Barrister Aemen Zulfikar Maluka

Josh and Mak International

Edit 3: Response to Inquiries Regarding Applicability of Inheritance Tax or Gift Tax to Foreign Owners of Real Estate and Other Assets

We would like to clarify that the inheritance tax or gift tax regime in Pakistan does not apply to foreign individuals who own real estate or possess other assets within the country. This means that foreign owners of properties and assets in Pakistan are not subject to inheritance or gift tax obligations with respect to their assets.

Inheritance tax is typically imposed on the transfer of property or assets from a deceased individual to their beneficiaries, while gift tax is levied on the transfer of assets from one living person to another as a gift. However, in the case of foreign owners of real estate and other assets in Pakistan, these tax obligations do not arise.

Edit 2 

Important Update: Revised Withholding Tax Rates on Immovable Property Transactions

We would like to inform our clients and stakeholders about the recent changes implemented by the Federal Board of Revenue (FBR) regarding withholding tax rates on the buying and selling of immovable properties. These changes came into effect on July 1, 2023, in accordance with the Finance Act 2023.

The FBR’s field formations have diligently enforced the revised rates across the country. The adjustments primarily affect the withholding tax rates under sections 236C (Advance Tax on sale or transfer of immovable Property) and 236K (advance tax on purchase or transfer of immovable property).

For filers of income tax returns, the rate of withholding tax has increased from 2 percent to 3 percent under section 236C. Conversely, for non-filers of income tax returns, the rate has been raised from 4 percent to 6 percent under the same section.

Similarly, for filers, the rate of withholding tax has been increased from 2 percent to 3 percent under section 236K. Meanwhile, the rate for non-filers has been further raised from 7 percent to 10.5 percent under section 236K.

These adjustments to the rates of advance income tax collection are the result of amendments made through the Finance Act 2023 to the Income Tax Ordinance 2001.

According to the FBR’s field instructions, the rate of advance tax under section 236C will be 3 percent for filers and 6 percent for non-filers. Under section 236K, the new rates will be 3 percent for filers and 10.5 percent for non-filers.

We want to emphasize that these changes took effect from July 1, 2023, and we urge our clients to ensure compliance with the revised withholding tax rates on immovable property transactions.

Should you have any questions or require further clarification regarding these revised rates, please do not hesitate to contact our team. We remain committed to providing you with the latest updates and expert guidance on matters impacting your business and personal interests.

Edit 1- July 2023 

This was the question asked regularly by Overseas Pakistanis buying property in Pakistan:

Has the property tax for overseas Pakistanis been abolished? If you check online postings on blogs and on social media forums from June 2023, there are Posts by property dealers and real estate agents all over Pakistan claiming that Advance Tax for overseas Pakistanis had been abolished.Sadly this is disinformation.The Budget proposal never made it to the Finance Act 2023 and there is no such update to the Income Tax Ordinance 2001.

As per recent news, there were discussions about abolishing the two percent final tax on the purchase of immovable property through foreign remittances in the Finance bill 2023. However, this proposed change regarding the non-applicability of advance tax on property purchases through Roshan Digital Account for overseas Pakistanis was not approved and did not become a part of the Finance Act 2023. Therefore, the tax has effectively not been abolished.In fact now it is 3% as opposed to 2% previously for filers.Non filers have to pay more tax (the rate for non-filers has been further raised from 7 percent to 10.5 percent under section 236K after July the 1st).

But for overseas (non-resident) Pakistanis, whether they are filers or not, the advance tax remains 3%. There is no exemption on it.

I hope this clarification helps everyone visiting our website.

Connected question

I am an overseas Pakistani and I want to buy a plot in Lahore (Punjab). What taxes do I have to pay?

As an overseas Pakistani, you will be subjected to a 3% advance tax on the purchase of the property which will be adjusted as per section 236K (read the full section below).If you become a Filer you will get this tax adjusted at the end of tax year.If you chose not to become a Filer, there will be no way of adjustment for you.

Overseas Pakistanis have to become filers before buying property in Pakistan over 5 million PKR in value. There is one exception where the requirement of being a filer will not apply to overseas Pakistanis who can provide a certificate from a scheduled bank, confirming the receipt of foreign exchange remitted from outside Pakistan through regular banking channels within the 60 days prior to the registration, recording, or attesting of the transfer of immovable property worth Rs5 million. This provision allows overseas Pakistanis to fulfill the necessary financial criteria without the need for filer status.

What does adjustment for a filer by FBR for overseas Pakistani mean?

When the Federal Board of Revenue (FBR) mentions that a certain tax will be “adjusted” at the end of the fiscal year, it typically means that any excess or shortfall in the tax paid by a taxpayer will be reconciled and corrected during the final assessment process.

At the end of the fiscal year, the FBR conducts a comprehensive review of the taxpayer’s financial records and tax filings. During this assessment, the FBR compares the tax liability calculated based on the taxpayer’s income, deductions, and applicable tax rates with the amount of tax actually paid by the taxpayer throughout the year.

If the overseas taxpayer has overpaid their taxes, the FBR will adjust the excess amount by either refunding it to the taxpayer or applying it as a credit towards the next year’s tax liabilities.

On the other hand, if the overseas taxpayer has underpaid their taxes, the FBR will adjust the shortfall by issuing a tax demand notice, requiring the taxpayer to pay the remaining amount of tax owed.

Please pay attention to the following provisions of the Income Tax Ordinance 2001:

(111AB) The provisions of section 100BA and rule 1 of the Tenth Schedule shall not apply to non-resident individual holding Pakistan Origin Card (POC) or National ID Card for Overseas Pakistanis (NICOP) or Computerized National ID Card (CNIC) maintaining a Foreign Currency Value Account (FCVA) or Non-resident Pakistani Rupee Value Account (NRVA) with authorized banks in Pakistan under the foreign exchange regulations issued by the State Bank of Pakistan.] 

(111AC) The provisions of section 100BA and rule 1 of the Tenth Schedule shall not apply to non-resident individual holding Pakistan Origin Card (POC) or National ID Card for Overseas Pakistanis (NICOP) in respect of transactions on which tax is collectible under section 236C and 236K of the Ordinance;

236K. Advance tax on purchase or transfer of immovable property.—(1) Any person responsible for registering  [,recording] or attesting transfer of any immovable property shall at the time of registering  [,recording] or attesting the transfer shall collect from the purchaser or transferee advance tax at the rate specified in Division XVIII of Part IV of the First Schedule.  [Explanation,—For removal of doubt, it is clarified that the person responsible for registering, recording or attesting transfer includes person responsible for registering, recording or attesting transfer for local authority, housing authority, housing society, co-operative society  [, public and private real estate projects registered/governed under any law, joint ventures, private commercial concerns] and registrar of properties.]  

The advance tax collected under sub-section (1) shall be adjustable  [: Provided that if the buyer or transferee is a non-resident individual holding a Pakistan Origin Card (POC) or National ID Card for Overseas Pakistanis (NICOP) or Computerized National ID Card (CNIC) who has acquired the said immovable property through a Foreign Currency Value Account (FCVA) or NRP Rupee Value Account (NRVA) maintained with authorized banks in Pakistan under the foreign exchange regulations issued by the State Bank of Pakistan, the tax collected under this section from such persons shall be final discharge of tax liability for such buyer or transferee.

[(3) Any person responsible for collecting payments in installments for purchase or allotment of any immovable property where the transfer is to be effected after making payment of all installments, shall at the time of collecting installments collect from the allotee or transferee advance tax at the rate specified in Division XVIII of Part IV of the First Schedule] 6 [: Provided that where tax has been collected along with installments, no further tax under this section shall be collected at the time of transfer of property in the name of buyer from whom tax has been collected in installments which is equal to the amount payable in this section.]

(4) Nothing contained in this section shall apply to a scheme introduced by the Federal Government, or Provincial Government or an Authority established under a Federal or Provincial law for expatriate Pakistanis “Provided that the mode of payment by the expatriate Pakistanis in the said scheme or schemes shall be in the foreign exchange remitted from outside Pakistan through normal banking channels.”

100BA. Special provisions relating to persons not appearing in active taxpayers’ list.-(1) The collection or deduction of advance income tax, computation of income and tax payable thereon 5 [in respect of a person not appearing on the active taxpayers’ list] shall be determined in accordance with the rules in the Tenth Schedule. (2) The provisions of the Tenth Schedule shall have effect notwithstanding anything to the contrary contained in this Ordinance.]

THE TENTH SCHEDULE (See section 100BA)

RULES FOR PERSONS NOT APPEARING IN THE ACTIVE TAXPAYERS’ LIST 1. Rate of deduction or collection of tax. – Where tax is required to be deducted or collected under any provision of this Ordinance from persons not appearing in the active taxpayers’ list, the rate of tax required to be deducted or collected, as the case may be, shall be increased by hundred percent of the rate specified in the First Schedule to this Ordinance …Provided further that the tax required to be collected under section 236K shall be increased by two hundred and fifty percent of the rate specified in Division XVIII of Part IV of the First Schedule in case of persons not appearing in the active taxpayers.]

Edit 3 July 2023

A lot of people Overseas want to know about becoming filers in Pakistan before purchasing property here.

Overseas Pakistanis have the opportunity to become filers and file their Income Tax Returns in Pakistan. Although non-resident individuals generally do not owe income tax to the government, filing a tax return allows them to avail the benefits of being a tax filer.

Understanding Taxation for Non-Resident Pakistanis: Taxation in Pakistan is based on an individual’s resident status, irrespective of their foreign residency. Overseas Pakistanis who earn taxable income in Pakistan are required to pay income tax on their Pakistan-sourced income. By becoming a tax filer, overseas Pakistanis can enjoy various benefits, including lower taxes on banking transactions, vehicle registration, transfer of immovable property, and more. Being a tax filer also provides opportunities for investment in real estate, stock exchange, mutual funds, savings schemes, and prize bonds.

Tax Benefits for Overseas Pakistanis: One significant advantage of filing tax returns for overseas Pakistanis is the ability to save on withholding taxes when purchasing movable or immovable assets in Pakistan, such as vehicles or houses bought exclusively from foreign income. By declaring themselves as tax filers, overseas Pakistanis can demonstrate that their assets were acquired from foreign sources and are not taxable in Pakistan. This not only saves money but also helps avoid potential audits by tax authorities, providing legal security under Pakistani laws.

Determining Non-Resident Status for overseas Pakistanis and foreigners buying property in Pakistan:

As per the  Income Tax Ordinance 2001

Resident and Non-Resident Persons are defined as follows 

81. Resident and non-resident persons.— (1) A person shall be a resident person for a tax year if the person is — (a) a resident individual, resident company or resident association of persons for the year; or (b) the Federal Government. (2) A person shall be a non-resident person for a tax year if the person is not a resident person for that year.

82. Resident individual. — An individual shall be a resident individual for a tax year if the individual —

(a) is present in Pakistan for a period of, or periods amounting in aggregate to, one hundred and 1 [eighty-three] days or more in the tax year.

(d) being a citizen of Pakistan is not present in any other country for more than one hundred and eighty-two days during the tax year or who is not a resident taxpayer of any other country.]

83. Resident company.— A company shall be a resident company for a tax year if — (a) it is incorporated or formed by or under any law in force in Pakistan; (b) the control and management of the affairs of the company is situated wholly in Pakistan at any time in the year; 

Interpretation:

To file tax returns in Pakistan, overseas Pakistanis need to register with the FBR and obtain their National Tax Number (NTN). The following steps outline the registration process:

1. Registering for NTN: a) Visit the FBR website and verify if you are already registered by checking your NTN. b) If not registered, proceed to the IRIS portal and click on “registration of unregistered person.” c) Fill in the required details and complete the registration process. d) Verify the received pins on your mobile and email, and then login using your CNIC and password. e) Complete the ‘Registration Form’ available in the draft folder and submit it to obtain your NTN.
2. Filing Tax Returns: a) Login to the IRIS portal and click on the ‘Declaration’ tab. b) Select the appropriate tax return form based on your income source: Form 114(1) for non-resident Pakistan-origin individuals with no Pakistan-source income, or the regular income tax return form (Section 114) if you have taxable income in Pakistan. c) Declare your resident or non-resident status based on the time spent in Pakistan during the fiscal year. d) Provide relevant information regarding your income sources, both foreign and Pakistan-sourced. e) Non-resident Pakistanis or overseas Pakistanis are not required to file a statement of wealth along with the return to enjoy filer status.

Filing income tax returns in Pakistan as an overseas Pakistani buying Property in Pakistan offers several advantages, including lower taxes and opportunities for investment in the property sector. By following the registration and filing process outlined by the Federal Board of Revenue, overseas Pakistanis can become tax filers and enjoy the benefits associated with filer status.

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Pakistan Property Purchase Guide (updated periodically)

This guide is designed to assist both local and overseas Pakistanis, as well as foreigners interested in investing or buying property in Pakistan. At Josh and Mak International, we understand the importance of legal protection and transparency in property transactions. Our top-tier legal team is dedicated to providing expert guidance, legal opinions, and conducting thorough due diligence to ensure a secure and successful property investment experience. With reasonable and affordable fees, we aim to protect you from fraudulent sellers and offer valuable legal advice tailored to your specific needs.

Legal Opinion and Due Diligence Services: When considering property investment or purchase in Pakistan, it is crucial to have access to reliable legal opinions and conduct thorough due diligence. At Josh and Mak International, we offer a range of services to support your property endeavors, including:

1. Legal Opinions: Our experienced legal team is available to provide professional legal opinions on various property matters. Whether you need guidance on property laws, contracts, ownership rights, or any other legal aspect, we are here to help. Our team will assess your specific situation and provide well-informed opinions to protect your interests and ensure compliance with relevant laws and regulations.
2. Due Diligence: To protect you from potential risks and fraudulent sellers, our due diligence services are designed to provide a comprehensive examination of the property’s legal status and associated documentation. We conduct meticulous investigations to verify property ownership, review relevant permits and approvals, assess any existing legal disputes, and identify potential liabilities or hidden costs. Our goal is to provide you with a clear picture of the property’s legal standing, enabling you to make informed decisions.

Affordable and Reasonable Fees: We understand the importance of affordable legal services, especially in property transactions. At Josh and Mak International, our fees for due diligence and legal opinion services are reasonable and tailored to meet your specific requirements. We believe in providing high-quality legal services without burdening your finances. Our commitment to transparency and fair pricing ensures that you receive excellent value for your investment.

Get in Touch: Whether you require legal advice, due diligence services, or assistance in selling your property through our verified network of buyers and sellers, our dedicated team is here to help. To avail our services or discuss your property-related needs, please email us at [email protected]. We will promptly respond to your inquiries and provide the necessary support to facilitate your property investment journey in Pakistan.

For information on Transfers and Sales of Property in Pakistan Visit this article on our website.

While this brief is a guide to the purchase of real estate within Pakistan it does not take a legal stance and all guidelines herein should be undertaken under the guidance of your lawyer or attorney. It must be mentioned that in our experience in Pakistan, we have seen that many Overseas Pakistanis, have suffered badly in past by being cheated on relating to property issues. This has been contributed to several factors but not getting the best legal advice or trying to save money by cutting corners and scrimping on the legalities are major players contributing to such losses.

The following are very basic guidelines for Overseas Pakistanis to look at before even considering purchasing a property.

Avoid any company, which claims to come and visit your country of work or residency. While they sell this at a surplus the money will start racking up before you have even looked at the particulars of a property. You will be much better off dealing directly via electronic means with a company in the area where you want to buy.

Don’t even consider those shiny property sales/housing society Ads, which are advertised on  the TV and Facebook every other day or so. The cost of those ads is added onto the price of the properties, which are likely to be substandard at best, and also likely to go into litigation later due to lack of permits or clearance by the government.

In short, any Overseas Pakistani or Foreigner  intending to pay any attention to the new, glamorous housing society advertisements, should be wary that these commercials have been purpose built to relieve overseas buyers of their hard earned cash. Getting tangled up with these builders and societies and their shenanigans can be a nightmare for those who live in Pakistan, never mind those who live overseas or are foreigners. Our Advice: Please stick to an established property with a titular history for a good price in a good area. Those ads on television and internet are the perfect time to put the kettle on, and honestly that’s all they are good for! if you have been approached by any such marketers, please contact a lawyer to conduct proper due diligence of these properties and so-called societies.

PURCHASING FROM THE OWNER

While this is the advised avenue to take for an Overseas Pakistani or Foreigner buying a property in Pakistan it is far from perfect unless you take the precautionary measures that apply to residents. Do your homework thoroughly as mentioned right at the very beginning of this brief. Only by going back through the history thoroughly do you know that you are buying a property that the vendor is actually entitled to sell.

If you don’t intend to travel to Pakistan to take care of the sale ensure that you give power of attorney to somebody you trust and not a company who claims to be working on your behalf. Selling a house that is essentially a blank file to numerous people at the same time is one of the best-known scams in Pakistani real estate. Do not be the next person to fall for this con. You should place two adverts in prominent newspapers stating your intention to buy whichever property has caught your eye. One should be in English and the other Urdu. This is effectively a public notice stating your intention of XXX property from XXX vendor and letting everyone know that if they have any claim, objection, attachment, lien, interest etc. they must inform either you, the concerned authority or your lawyer within 7 days. This can save you from many a headache down the line should the vendor have also promised the property to somebody else.

Even if the house you intend purchasing belongs to a friend or relative always protect yourself by inviting the public objections we have mentioned above. Never think that because you are buying from somebody you know, and probably trust, that there is guaranteed to be nothing awry.

The Importance of Power of Attorney

It is not whether or not you should authorize power of attorney that is at question here, rather than who you give it to. It is amazing how often that good friend can turn into a wolf when there is money involved. A major issue is that in Pakistan there are so many ready made, one size fits all power of attorney texts that people seem to think applies to all scenarios and cover their backs; they don’t. Granted, there are certain items, which need to be included in there by law, but on the whole every power of attorney should be unique and relevant to the reason why you are giving it in the first place. Do not sign anything until the text and its contents have been fully checked over by your lawyer. At Josh & Mak International we have the experience and expertise to oversee this entire process to ensure you have the cover and protection you need. Our clients are always our number one priority and our international standing among overseas Pakistanis is second to none.

The Services We Offer

These services apply to all clients, whether you live in Pakistan or not, as well as Foreign Nationals. Whether you are looking to purchase a property or own one that is standing empty, not being looked after properly or is currently occupied by an unsavoury tenant give us a call today to see how we can help you.

• We leave no stone unturned to find the very best tenants for your property. This includes ads in leading newspapers and on reputable websites, liaising with local agents etc. to ensure your property is occupied by the calibre of tenant you would choose for yourself.
• We carry out the reference and background checks including their record relating to previous rentals
• The preparation of all legal documents pertaining to both purchases and rentals
• The issuing of eviction notices to tenants should they be needed and the filing of court petitions for evictions
• Taking on the full responsibilities should you choose us as your power of attorney allowing you to rest easy knowing that we will always be working both for you and with you
• The transfer, sale or purchase of properties in Pakistan
• The recovery of properties in terms of possession
• Pursuing property litigation within Pakistan where the title and occupancy comes into dispute.

The safest way to purchase or sell a property in Pakistan

In an ideal world everyone would engage the services of a lawyer in order to buy or sell property. However, way too many Pakistanis try to save themselves money by doing direct deals without getting all the necessary background checks done. Invariably, they will find themselves caught up in legal complications and instances of fraud further down the line, which will cost them so much more in the long run to put right. The ONLY way to buy or sell property in Pakistan, which allows you to sleep easy at night, is to do so via a lawyer. Trying to save money by avoiding this step is asking for trouble and could see you end up being both out of pocket and without a property.

The Josh and Mak Team routinely advises its  clientele on the sale, purchase or rental of all residential, commercial and agricultural properties. We will take care of the entire verification process as well as the registration of all title documents, the procurement of ‘Farad’ revenue documents and sort out the Intiqal in the revenues records.

On the other side of the coin we will also initiate fast legal proceedings against those offenders who take part in the illegal possession of property, land grabbing and the transfer of property which has taken place by fraudulent means.

Pakistani Real Estate Laws

The following overview explains the processes and procedures of Pakistan real estate including Gift, leasing, mortgages, taxation on gains from selling Pakistan properties, real estate taxation and the setting up of real estate trusts in the country. These notes are for general guidance only and do not claim to be legally binding. Only by signing a contract with a lawyer do you cover yourself from all eventualities.

The sales of real estate within Pakistan will usually take place using the title document called a Sales Deed. The only exception to this is such cases as the purchase of real estate in DHA, Defence Housing Authority, or within a housing society, which doesn’t execute a sales deed for transferring a real estate title. Many people often, prior to the execution of a sales deed, choose to execute the agreement to sell. However, these agreements do not transfer the title of a property in favour of a vendee, instead they create a right in the favour of the vendee should the vendor refuse to honour the conditions and terms contained within that agreement and allow them to seek a special enforcement of the sale agreement. The title on an immovable property will only be transferred once the title document or sales deed has been executed. The sales deed will be affixed with the requisite stamp duty and must also be registered with the relevant authority. After the sales deed has been registered the mutation of the sale must be entered into the relevant register, which is maintained and kept by the Patwari.

Leasing/Renting out of Real Estate in Pakistan

Point of view of the landlord: Landlords must ensure that a lease on an immovable property is fully executed in writing. Should the rental period of the immovable property be less than one year no compulsory registration is required. Registration is a must for any rental periods of over one year.Should the tenant refuse to pay the rent, or break any of the stipulated terms of the tenancy, the landlord is within their rights to terminate the lease. If that tenant refuses to leave the property the landlord can file an eviction petition with the relevant authority.

Point of View of the Tenant: The tenant must make sure that they always make prompt rent payments via the method agreed in the tenancy agreement and receive a receipt from the landlord. Should the tenant unjustifiably or unlawfully attempt to evict a tenant that tenant can file a petition as well as availing several other legal remedies his lawyer will advise upon.

Pakistani Real Estate ‘Gifts’/Gifts in Muhammadan Law : Special Laws that Apply 

Any real estate gift in Pakistan has to be made in writing. However, the exception to this general rule is a Muhammaden gift, which is the oral gift of a property. Even though this is a legally accepted act oral gifts are not recommended, as they are almost impossible to prove if the other party denies it. Where a written gift deed has been executed it must be registered and affixed with the relevant stamp duty.

In the case of a Muhammaden oral gift, this will take effect if all three of these conditions have been satisfied;

• The Declaration of the gift

• Acceptance of the gift by the recipient during the givers lifetime

• The giver transfers legal possession of the property to the recipient

When these have all been satisfied the fact of gift is deemed to have been established.

Legal Mortgages 

A legal mortgage pertaining to an immovable property can be created once the mortgage deed has been executed. The mortgage deed must be affixed with the appropriate stamp duty as well as being registered with the sub-registrar.

Equitable Mortgages Equitable mortgages pertaining to immovable properties are created by the depositing such original title documents with the mortgagor as sales deeds, allotment letters etc. As registration is not a requirement the general practice is to have a lien marked in relation to the mortgage.

The taxation on gains made from Pakistani real estate

There is no legislation included in the constitution relating to capital gains taxation from the federal government’s purview. The laws relating to income ta have been harmonised with these provisions by excluding immovable properties from the very definition of capital assets, the gains of which are liable to taxation.

However, a profit on certain transactions concerning immovable property is liable to taxation under the laws of income tax. These include the disposal of a property that has been acquired as stock within a trade and the intent to make a commercial profit. However, such gains realised on the disposal of an immovable property which has been transferred due to gift, family inheritance, being bereft of any commercial motives of if the property is held as a capital asset of a business are all exempt.

Need more information ?

Capital Valued Tax on Pakistan Transactions Related To Real Estate Need more information ?

Capital value tax stands at 2% of the recorded value, which has been levied in the Finance Act of 2006. This applies to urban areas where residential properties exceed one kanal in area and to commercial properties where no thresholds exist relating to the property’s size or the area of land it stands on. When the property’s value has not been recorded however, the capital valued tax is payable at the rate of Rs. 50 per square yard. All transfers who fall under the scope of gift, purchase, surrender, exchange, power of attorney or relinquishing of rights are subject to capital value tax. However, those transactions that take place between grandparents, parent, siblings and spouses through inheritance and gift are excluded from the purview.

Establishing Real Estate Investment Trusts in Pakistan

Real estate investment trusts are relatively recent concepts within Pakistan and were introduced as incentives for investing in Pakistani real estate. Any income from such a trust is exempt from tax as long as nothing less that 90% of its profits is distributed among the holders of the units.

FAQ’s Relating to Pakistani Real Estate

What is an Aks-Shajra?

Aks-Shajra is the image of a specific piece of land or specific khasra number from the plan or map of a village or estate and is used to define boundaries.

What is Fard Malkiat?

 Fard Malkiat also referred to as a Record of Rights, Jama Bandi, Misal Haquiat and Register Haqdaran-e-Zameen and is maintained for the recording of determining the various types of rights which exist an immovable property.

What is a Mutation (Intiqal)?

The mutation is the document which contains an order from a revenue officer who must possess at least a grade III Assistant Collector qualification, and deals with records of rights that are to be changed, altered or mutated within the revenue records.

What is meant by the Tattima Registry?

Tattima simple means “supplementary” and therefore the Tattima Registry is the name given to the supplementary sale deed in a specified area.

What is a Khasra?

A Khasra is a piece of land that has both a specific number and measurements

What is Khasra Garrdwari?

Kharsa Gardwari is a register which is maintained for records of cultivation/possession.

What is a Survey in Pakistan?

A survey in Pakistan is a map or drawing which shows a property’s precise legal boundaries, the location of any improvements, rights of way, encroachments, easements and any other physical features of the property.

Is a mutation a title document?

No.

What is the name of the document that creates the title in an immovable property?

The Register Sale Deed, Registry /Baye-Nama, is the document, that creates a title in an immovable property.

What is meant by a Sale Deed or Conveyance Deed?

A Sale Deed or Conveyance Deed is the deed document used to convey a property’s titles from the seller to the buyer. This deed document helps you to ascertain whether or not the property you are buying stands on land that belongs to a society, builder, development authority etc.

Where do I get the title deeds or documents for my house?

These can be obtained from the department or office via which the title of the property was transferred or conferred.

Which laws will generally deal with Pakistani real estate?

There are many laws dealing with Pakistani real estate including The Transfer of Property Act, 1882, Land Revenue Act, 1967, Stamp Act, 1899 and Registration Act, 1908. Your lawyer will advise on all the laws relating to real estate in Pakistan.

What safety precautions should I undertake before I buy a property or any other kind of real estate in Pakistan?

Before you buy any kind of property in Pakistan a thorough investigation should take place into the title of the seller of that real estate. The general practice is to do a probe into not only the current seller but also any previous owners dating back to a period of around 20 years. The original title document that favours the vendor must be obtained as well as the other relevant documents such as a mutation in favour of the vendor, a new Fard, the aks shajra and either a non-encumbrance certificate or no-objection certificate whichever is relevant to the property in question. If the vendor is selling a property in their capacity as the owners lawyers you must ensure that the power of attorney has been duly registered with the sub-registrar. Anyone found to be holding a fabricated or forged power of attorney will not be able to transfer the valid title of any immovable property to any third party.

The property I want to buy is registered in the name of a company, what documents should I be inspecting?

Before purchasing any property which is registered to a company you need to verify with the Registrar of Companies at the Securities & Exchange Commission of Pakistan that this property is not currently mortgaged nor is it being used as security against any loan. If it is either of this it cannot be considered to be a hold property. Additionally, you should check the memorandum of association to make sure who is authorised to act on the company’s behalf when it comes to selling that property. If a resolution is required the same must be both passed and verified and you should also inspect the original title documents in possession of the selling company.

Can residential properties be used as office space by corporate bodies?Need more information ? 

While it is illegal to run a commercial business from a residential property certain service based industries can operate out of residential areas.

Can a foreigner buy a property in Pakistan?

Yes. Following the completion of the legal formalities foreigners are allowed to by property within Pakistan.

What are the inheritance laws which apply in Pakistan?

The Pakistani inheritance laws are dependent on religious affinities. For example, Muslims have their own personal laws as do other religions.Need more information ? Contact us now +92-51-8442922

Does the transfer of every immovable property need to be registered in Pakistan?Need more information ?

Transfers of immovable property’s with a value of Rs 100/- and up can only be made with a registered sales deed.

Can overseas Pakistanis buy property in the country without visiting?Need more information ? Need more information? Yes they can.

What documents are required to legally own a property?Need more information ? Need more information? 

Those deeds with verify the transfer in your favour such as sales deeds, allotment letters and sale certificates.

How do I actually own a property in Pakistan?

You become the owner of a property by purchasing it from a private person, builder, by allotment or purchasing it from a public development authority. Another way to become a property owner is to become a member of a co-operative housing society.

What is a Power of Attorney in Pakistan?

A Power of Attorney in Pakistan effectively gives an agent the power to execute deeds and acts for, and on behalf of the principal who is the only person who can hand this power over to a third party. You can also give somebody the power or attorney to appear before an authority, tribunal or court on your behalf as well as to buy, sell or maintain real estate. If the power of attorney is given relating to several acts within a number of transactions it is called the General Power of Attorney, which must be registered. If, however, it is given for only one particular act with one transaction it is a Special Power of Attorney and does not need to be registered.

Can the person who hold power of attorney transfer property in their own name? Need more information? 

No they cannot. Whoever holds power of attorney is bound by a fiduciary duty to act in your best interests and carry out whatever duties you would do for yourself if you could. Third parties will assume they are acting on your behalf and you need to make sure they are doing this to the best of their ability.

I’ve changed my mind, can I now revoke my power of attorney?

Yes you can.

On what grounds would a power of attorney be cancelled? Need more information ? Need more information? 

Automatic cancellation occurs if the executor dies or if the party holding the power cancels it.

So my Power of Attorney won’t be effective after my death?Need more information ? Need more information? 

No it ends when you die.

I want to buy an apartment in a block that is still under construction, what papers do I need to check? 

Check the approved plans of the building and the number of floors to ensure that the floor you want to buy has been approved. Also check if the land on which the building is being constructed belongs to the builder or if a legal agreement is in place with the owner. If the latter is the case check the land ownership title. Also make sure that the building bylaws for that area is being adhered to and that the building is from any violations from front or side setbacks, height etc. Scrutinise the specification within the agreement to sell to ensure they are same as those listed in the sales brochure. If the builder on one of the companies incorporated within the Securities & Exchange Commission of Pakistan you should check that this company is permitted to deal with the sale and purchase of Pakistani real estate.

Can I sell my immovable property be sold while it is still in mortgage?

No, you cannot sell immovable property, which is mortgaged.

What are the important documents I should check before I buy a property?Need more information ? Check the approved layout plans, the approved building plans, the ownership documents, all the deeds of title which related to property you want to buy, examine all the deeds, ascertain a survey number, check for any previous loans and encumbrances secured on the property, request that the seller obtains, if necessary, sanction, consent permission, no objection certificates from relevant authorities, bills, tax receipts, measures of land etc. etc.

What is stamp duty and is the buyer or the seller liable for it?

Stamp duty is a tax/fee, which the government levies on the transfer of a property and it must be paid on time and in full. Stamp paid documents are considered to be true and legal documents. Unless an agreement has been made to the contrary the responsibility of paying stamp duty falls on the shoulders of the buyer.

Why is an approved building plan necessary and why do I need one? 

Raising any construction without having the building plans approved is a direct violation of the Building Control Authority’s rules and can lead to the construction having to be demolished. It is therefore common sense that before the first brick is laid you has the full and mandatory construction approval in place.

Who maintains land records In Pakistan?Need more information? 

The land records in Pakistan land records are maintained and kept by the districts administration revenue department who decided the boundaries and the ownership of property or land within its area.

I co-own a property, can I sell it? 

Yes and no as you can only sell your share in that property and if no specific boundaries have been set you will need the consent of your co-owners.

Is a sale deed drafted by a Wasiqa Nawees/Arzi Nawees reliable?Need more information ? 

No. Sales deeds have to be drafted by lawyers who have knowledge of the relevant laws pertaining to the transfer of a property.

What are 3 essentials steps of Gift?Need more information ? 

1.The offer by the owner/donor 2. Acceptance by the recipient (to whom the gift is being offered) 3. Delivery of the possession.

Can a gift be revoked?Need more information ? 

Yes, a gift can be revoked with the exception of one that has been made in favour of a person who falls into a prohibited category such as one who is married to somebody who’s whereabouts are unknown.

What distinguishes a gift from an inheritance?

Gifts (Hiba) are always made during the lifetime of the donor and become effective from the moment it is completed where inheritance only takes place following the death of the donor. Another distinguishing feature is when an owner of a property makes a gift to it to one legal heir but as an inheritance it would have to be divided between all heirs.

Can a foreigner purchase property in Pakistan? There are quite a few considerations involved as discussed below.

According to SECP’s own ‘Promoters Guide’ foreign corporations are allowed to take a controlling interest in the infrastructure and in investments in industrial zones but the investment regulations for construction and housing demand that the title of a property be lodged with a local, incorporated company. This entity is allowed to be a wholly owned subsidiary of a company, which is incorporated overseas.

An alternative, and increasingly popular way to invest in real estate in Pakistan is by buying shares in a reputable company who are developing residential areas near to Islamabad and other main cities. Although foreigners who work and live in Pakistan are allowed to rent or buy properties the government requires them to undertake certain legal formalities with both the Trade Development Authority of Pakistan and the Board of Investment. Foreigners who intend to buy or rent a property in Pakistan are required to submit certain documents for approval to the Ministry of Interior in order to documents in order to get an NOC from the ministry of interior, including the ID information.

A few years ago, Afghan nationals were not being allowed to purchase property as individuals in Pakistan due to security concerns by the Ministry of Interior.They faced a lot of problems while having to trust local Pakistani friends or relatives and placing their properties in their names.In many instances times they were defrauded. During 2019 to 2022 we began the process of Company registration for a few Afghanis who were dual UK and US nationals.They had to wait a while before their companies were registered due to security clearance but in the end they succeeded in getting their companies registered.As per their feedback they did not face too many problems in buying property in Pakistan through their Pakistan registered companies.Now we are not sure if the fact that they were well established UK/US nationals contributed to their security clearance being done by the Ministry of Interior.

There are also problems for certain other nationalities in getting clearance from the Ministry of Interior. In our experience UAE and US/UK nationals find it easier to get clearance from the Ministry of Interior in Pakistan.

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Disclaimer; please bear in mind that the information included in this article is  for information purposes only and should be read as legal advice. Contact Josh & Mak International  for comprehensive help and legal advice relating to any aspect of real estate in Pakistan

Conclusion: Investing or purchasing property in Pakistan requires careful consideration and comprehensive legal support. This guide has introduced you to the range of services offered by Josh and Mak International, aimed at protecting your interests and ensuring transparency in property transactions. With our affordable fees, experienced legal team, and commitment to excellence, we are your trusted partner in navigating the legal complexities of property investment in Pakistan. Contact us today to access reliable legal opinions, thorough due diligence, and expert guidance tailored to your unique needs.