Buying a property is a major part of the Indian dream. Half of our lives are spent thinking about ways to make enough money to own that one house that we can call home. If you talk to elders in the family they will almost always end up coaxing you to buy a house, as for them, it is the ultimate form of investment and the means to a secure future.
From a very young age, most of us are psychologically conditioned to work hard, earn big moolah and ultimately be able to buy our own house. For some others out there, buying a house or investing in real estate may actually turn out to be a great investment idea. Nonetheless, there are certain aspects to be kept in mind before investing in a property to avoid yourself from being embroiled in legal conundrums and losing not only your dream but also your hard earned money.
Most often than not, when we set out to buy a house, we check for facilities like hospitals, shopping complexes, parks around or near the house, the location of the property, water and electricity facilities etc. But is that enough? These factors, though important, don’t always guarantee that you get the best deal when it comes to legal issues. So, what’s more important?
Legal Documents Required While Buying Property
Before venturing into any property-related adventure, make sure you check all the documents related to a property that you have finalised and legal compliances so that you are protected from any future legal hassles.
The list of legal documents that need to be considered before buying or looking to buy property are given as under:
1. Title Deed
It is one of the most pertinent things to check for. As we all know, nobody can transfer better title than he himself has. A seller cannot transfer his property to a prospective buyer if the title isn’t perfect and free from any encumbrances or defects. A person who claims himself as the seller can’t so sell his property if the property is not in his name and he doesn’t hold any good title over the same. The title search of a property can take place at a Sub-Registrar’s office. The buyer is entitled to receive all title documents of the property and the title document can be asked for properties that are extremely old, title documents that are prepared thirty years prior to the date of the title search need to be traced. The title should be free of any disputes over the ownership of the property.The title deed lets buyers ascertain ownership rights The seller should be the actual owner of the property. Before buying property, you should also ascertain whether the seller has the ownership of the property or just has its development rights.
2. Encumbrance Certificate
It is imperative to know whether the property is free from any legal dues whatsoever. Like in the case of title search, even encumbrances over the property can be searched for at the Sub-Registrar’s office. The office would provide all the background about the property concerned, as to whether there is any mortgage, or any third party claim, liens etc. Care must be taken when buying or investing in a mortgaged property. An encumbrance certificate or an EC would have a record of all the transactions done during a stipulated period of time over the property concerned, for which the EC is sought. The sale deed in duplicate needs to be submitted for obtaining an EC. A form needs to be filled for obtaining the Encumbrance Certificate and submitted to the nearest Sub-Registrar office.
3. Master Plan
More often than not you will come across sellers or builders of properties claiming certain infrastructural development at the place where the property is situated. Tall claims like a shopping mall will be built, schools would be constructed, highways and metros would be constructed often hold no ground and they are merely said to entice more and more buyers. Before buying a property, one should closely scrutinise the master plan of the area concerned and ascertain for themselves whether these claims would actually see the light of the day. These master plans of the area can be procured from the local town planning department of your city. You should also make it a point to carefully check the land use zone as per the master plan for the property.
4. House Plan Approval
It is essential that you ensure that the place where your property is located has been approved and also verify whether the building plan has been approved or not. You should also check to see whether any building bye-laws are violated. The building planning and the layout should be in accordance with the guidelines of the National Building Code of India. The layout also needs to be in accordance with the norms of GRIHA (Green Rating for Integrated Habitat Assessment).
5. Agriculture to Non-Agricultural Land Conversion Certificate
It is important for you to see to it that the plot that you are buying is not classified as agricultural land. Any land which is designated as an agricultural land can’t be used for residential purposes, if t is so done, then it will be rendered illegal. Therefore, if you have reasons to believe that the plot you are purchasing used to be an agricultural property, ensure that you are provided with a conversion certificate issued by the appropriate revenue authorities. A conversion certificate is needed to change the purpose of land use from agricultural to non-agricultural. The town planning department of the concerned city needs to issue a No objection Certificate for use of agricultural land for non-agricultural purposes.
6. Land Use Certificate
Most of you would already be knowing that constructing a property for residential purposes in a commercial zone is illegal. You need to apply to the development authorities of your respective city to verify if the residential property that you are planning to buy is in the residential zone and not in the commercial, agricultural or industrial zones. Residential properties shouldn’t be bought for commercial purposes without the approval of the urban development authorities. Thanks to “Zoning” you won’t be surprised if one fine day you get to know that you bought a plot for residential purposes in a commercial zone and that too without the approval of the authorities concerned and your plot is being demolished by them.
7. No Objection Certificate
No objection certificates should be obtained wherever necessary. The seller should provide you with a copy of the urban non ceiling no-objection certificate and NOCs for water, electricity etc. as well.
8. Commencement Certificate
This certificate is essential for any construction of a property to commence. This is issued by the town planning department after scrutinising the building layout, plan, superstructure etc. The builder should have all the necessary sanctions before he sets out to construct.
9. Property Tax Receipts
Tax receipts should be checked to ensure whether the seller of the property has paid all tax accruing on the property for the past 3 years to the authorities. You should ask for previous receipts of property tax if you are buying a property that is being resold.
10. Sale Deed
Before executing a sale deed, the buyer should ensure that the property has a free title. Sale Deed is one of the most important legal documents. It is a proof that states that the property has been sold and the ownership of property has been transferred from the seller to the purchaser. Before executing a sale deed all charges like property tax, electricity and water charges, maintenance and housing society charges Care should be given to the fact that a sale deed needs to be compulsorily registered.
11. Khata Certificate/ Extract
Khata when translated to English means “account”, it is essentially the account of a seller or the owner of the property. A Khata extract is essential for buying property. This is of prime importance for not only transferring a property but also for the registration of the new property.
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