Investing in real estate is a popular choice among one and all. It becomes very important to ensure that your decision of buying a property is legally sound. Below is a checklist of legal documents that that need to be considered before buying a property:
1. Title Deed
The seller should have a clear and transferable ownership rights in the property. It is general knowledge that nobody can transfer title that he himself does not possess and that the title is free from any encumbrances and defects. The title search of a property can take place at a Sub-Registrar’s office and the you are entitled to receive all title documents of the property. The title deed helps you ascertain the ownership of the property. Before buying property, you should also determine whether the seller has the ownership of the property or just has its development rights.
2. Encumbrance Certificate
It is vital to ensure that the property is free from any legal dues. In other words, to check if the proposed property is encumbered and / or charged as security against any loan availed by the seller. The 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. 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.
3. Sale Deed
A Sale Deed is the core legal document that acts as proof of sale and transfer of ownership of the property from the seller to the buyer. A Sale Deed has to be compulsorily registered. Before executing a sale deed all charges like property tax, electricity and water charges, maintenance and housing society charges needs to be paid.
4. Master Plan
You may be coming across tall claims shopping mall will be built, schools would be constructed, highways and metros would be constructed. These are often false promises to entice home buyers. Before buying a property, you should closely scrutinise the master plan of the area concerned and decide if the claims are authentic. These master plans of the area can be procured from the local town planning department of your city. You should also carefully check the land use zone as per the master plan for the property.
5. 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).
6. Agriculture to Non-Agricultural Land Conversion Certificate
As per law, any land designated as agricultural land cannot be used for residential purposes. If it 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.
7. Land Use Certificate
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.
8. 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.
9. 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.
10. 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 re-sold.
11. Khata Certificate/ Extract
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.
Completion Certificate (CC), Power of Attorney, Probated Will, Occupancy Certificate (OC) etc. are few the other legal documents that are essential at the time of buying property.