In many countries the process of buying property is made clean by the government authorities. The authentication of ownership documents for instance is a clean process.
But in India it’s still very hunky dory. Where you’re surrounded by unbelievable offers, brokers and builders dancing at your feet with loads of illegalities and corruption being involved. So proper legal advice and endless caution must be maintained by the buyer, to safeguard his interest. The main pegs you could look into are:
Title Verification and legal ownership of the seller
Is the title with the seller, nature of the title, marketability and clean and marketable title. Another thing that you must see are the documents of the last 30 years or at least 12 years if the document is not available. These must be examined.
Look for the following documents:
- Title document of property: Is it a sale deed, gift deed, a will etc. It should show how many years the seller has been having the property.
- Is it on lease hold, free hold or a development right?
- If on development right- Development agreement and power of attorney made by owner vis a vis the seller.
- All title documents should be duly stamped and registered from the sub registrar of assurances.
- Khata registered in seller’s name
- Information on any previous litigation
- Original documents available with seller
Knowledge about seller’s identity and whereabouts
- His residence, nationality
- All owners identification if jointly owned
- If the seller is a company, trust or a registered organization, construction document of seller and if the seller is duly allowed to sell.
- If property held by minor then orders from a competent court permitting sale of property.
Land use permission and conversion
Agricultural land is sometimes sold for making buildings, residential blocks. You have to find out if the land falls into the master plan and is a part of the zoning plan. Such as: Residential, commercial, park area etc. If the use is different from zoning plan the town planning authority’s permission must be taken.
- Approval of construction and development if a building is already constructed: In case you are buying a ready made flat in a housing society, you should keenly look into the building plan/layout plan and it should be legal and have the permission of the municipal authority and approval by the government. They will provide the basic amenities like water, sewage, electricity and fire safety.
- Certificate of occupancy: The seller must have the occupancy certificate from needed authority before building on the property. Without this your house can be destroyed anytime by such authority and/or a penalty would be charged under the bylaws.
- Property tax has been paid regularly or not: The buyer must check that the seller has paid his property tax regularly. This is because non-payment will be charged.
- Encumbrance or third party clearance: If the seller is a corporate entity you must check information on regular encumbrances on property. Public notice in the newspaper could be given to make sure there is no third party involved in the property, which could make a claim on it.
- Physically survey the property: Find out the extent and measurement of the property. You must identify its boundaries and you must make sure you have access to it and check out any impediments to use of your entire property.
- Does the property comply under the Real Estate regulation and development act, 2016 RERA:RERA makes sure property is registered with it under this act. If your property comes in this preview. Verify if it is registered here. Any complaint or conflict can be found out in REAR. They have a Web portal for every state. This will be indicating credibility of the developer and you can make such an informed choice.
So summing up the whole procedure in some Peggy way follows:
Check- Content and title deeds of property.
- Sort any problems you encounter.
- Make sure all relevant documents are signed and held by you.
- Is the property structurally sound.
- Arrange provisional building insurance.
- Voice any concerns you have.
- Fix completion date.
- Send the initial deposits to the sellers, solicitor or broker.
- Go through the final words of the document.
- The seller should give you a complete run through on the property.
You also must:
- Continue building insurance.
- Compile removal arrangement.
- Take down meter reading the day you move in.
- Notify your change of address to all relevant people. For example: Banks, building societies etc.
On completion of process:
Send the rest of the money to the seller, solicitor or broker and collect all your property documents.
Pay out any stamp duty or tax payable.
Register your ownership with the land registry.
Seller should send you the copy of all your ownership and title deeds.
Now collect your keys from the estate agent and move in right away!!!
So, in short we have given you a run through of all the legalities involved in this process. Please take it very seriously as there are many pitfalls in this area of your life. Be brave not rash.