By Runwal Group Posted Oct 24, 2019 In Property investment
Buying a residential property is not cheap. Add to it the various certifications, loan approvals, legal information, rules and regulations, authentications and permissions to be considered before a purchase and it can be a tedious, often confusing and long drawn out process. It is prudent to be aware of the procedures involved before an actual buy.
So, what are the basic formalities that a buyer needs to check before making a huge financial investment? Let’s find out…
The first step is to verify that the title deed is in the name of the seller and that it is a clear deed, meaning the seller is free of any encumbrances and has the full right to sell the property to the buyer. Some other points to check will include
Seller’s identity verification
As with the title of the property, the buyer must also verify the identity of the seller such as
Property conversion & land use permissions
In India all land is termed as agricultural land unless deemed otherwise. Therefore, before purchase the buyer must ascertain if the plot/land records are non-agricultural (NA), that the property has been developed as per the zoning regulations or in case where the actual use of land is different from that indicated in the zoning rules, then relevant Town Planning Authority permission have been taken.
Construction approvals & NOC
The buyer must check if the property is in an already constructed building if the building plan has been approved by the municipal corporation, as well as if no objection certificate from the electricity board, water management board, fire safety, waste disposal, and environmental clearances are all in place.
One important fact the buyer must check is if the seller has obtained an Occupation Certificate from the relevant authorities. An OC means that the property is ready for stay with all necessary permissions in place. If an OC is not issued and the property is in use then there is a risk of penalty or even demolition.
An encumbrance certificate is a declaration that the property is not entangled in any legal issues. As a precaution some buyers issue a public notice in newspapers to ascertain if any other owners are forthcoming and also to ensure that there will be no further claims on property in the future.
Property Tax Bills & Receipts
Property tax bills and receipts indicate that the seller has paid all previous dues related to property tax and that the new owner will not have the liability to pay them.
Actual land survey
Before going ahead with the purchase deal the buyer must conduct an actual physical survey of the property to check the validity of measurements, demarcate boundaries and access to property.
Under the Real Estate and Regulation Act 2016 (RERA), it is mandatory for the sellers/developers to register their projects with the relevant authorities. A buyer must verify if the seller has registered the property under RERA. The registration number can be used by the buyer to find information/cross check facts, from the RERA website, about the seller and if any cases/complaints are pending against them.
As mentioned before buying a home is a huge investment so it is advisable that buyers conduct due diligence before proceeding with any property transactions.
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