22-A registration relief leaves Telangana property owners facing uncertainty

Telangana’s decision to allow registration of eligible 22-A properties may revive transactions, but owners remain uncertain as the properties continue on the prohibited list. The unresolved status could affect bargaining power, property values and decisions to sell.

Hyderabad: The Congress government’s decision to allow registration of houses, plots and flats covered by the 22-A prohibited list may have opened a temporary window for transactions, but it has done little to end the uncertainty that has haunted property owners for last a few months. In fact, by allowing registration without removing the properties from 22-A, the order could leave owners with a new dilemma of whether to sell now at a discounted value or continue waiting for a complete resolution.

On Thursday, the Revenue Department announced allowing registration of properties carrying valid GHMC, HMDA, DTCP, municipal or other local-body approvals. Applicants were asked to produce a link document, while district-level committees headed by Collectors will examine cases involving complications.

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However, the relief stops at registration. The properties continue to remain in the 22-A list. This means the fundamental uncertainty over their status is not resolved until the district-level committees clear them permanently from the list.

That distinction could have a direct bearing on property values. A buyer aware that the property continues to carry the 22-A tag is unlikely to negotiate on the same terms as for a property free of such restrictions. Owners facing urgent financial requirements, loans, family commitments or other needs could consequently be forced to sell at prices substantially below what comparable unrestricted properties command.

The government’s partial solution could therefore create a market where urgency works against the owner. The ability to register may bring a buyer to the table, but the continuing 22-A status could give the buyer greater bargaining power. In such a situation, registration becomes possible, but a fair-value transaction may not.

The timing of the decision is also significant. Property registration volumes have declined even as the government’s revenue from registrations increased. Between April and August, registration revenue rose about five per cent in Telangana, while the number of registrations fell nine per cent. The higher revenue has been attributed largely to the sharp revision in official market values by 75-100 per cent earlier this year.

Allowing eligible 22-A properties into the registration system could provide an immediate boost to transaction activity and registration revenue. But for owners, the financial uncertainty does not end with registration.

That creates the central contradiction in the government’s approach. The State can collect registration revenue from a property while leaving the owner to deal with the continuing uncertainty attached to its title and marketability.

The government has said it will examine the nature of the land, available records, statutory approvals and legal issues and provide further relief wherever eligible. But until the properties are actually removed from the prohibited list, owners remain caught between two realities, that they can register, but they cannot be certain that the 22-A cloud over their property has disappeared.

Further, the decision comes at a politically sensitive juncture, with a series of elections lined up in Hyderabad. Elections to the three municipal corporations, the possibility of a Khairatabad Assembly bypoll and the two Graduate MLC constituencies are set to put the ruling Congress under renewed scrutiny in the city.