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The List of Formalities to Check before Buying a Home

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…

Title Deed

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

  • title documents of the property (succession certificate, sale deed, gift deed, will etc.)
  • the nature of the title, whether freehold, leasehold or development right
  • in case the seller claims developmental rights then the development agreement and power of attorney, executed by the owners in favor of the seller
  • that all title documents have been registered and stamped in the sub-registrar’s office
  • any information on past or pending litigation, if any
  • availability of original title documents with the seller

Seller’s identity verification

As with the title of the property, the buyer must also verify the identity of the seller such as

  • nationality, residence of the seller
  • if the seller has authority to sell the property
  • if there are multiple owners, identification of all of them
  • if the seller is a company, society, trust etc. then verifying their authority to own, transfer or sell the property
  • in case the owner is a minor, then pertinent orders from a court of law of appointing a guardian and giving permission to sell the property

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.

OC

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.

Encumbrance Certificate

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.

RERA compliance

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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Disclaimer

The plans, specifications, images and other details herein are only indicative and subject to approval of the concerned authorities. The Group / Owner reserves the right to change any or all of these in the interest of the development, without prior notice or obligation. Artist’s impressions are used to illustrate amenities, specifications, images and other details and these may be applicable to select apartments only. Tolerance of +/- 3% is possible in the unit areas on account of design and construction variances. All brands stated are subject to final decision of the project architect. This printed material does not constitute an offer and/or contract of any type between the Group / Owner and the recipient. No booking or allotment shall be deemed to have been made on the basis of this printed material. Any Purchaser / Lessee of this development shall be governed by the terms and conditions of the agreement for sale / lease entered into between the parties, and no details mentioned in this printed material shall in any way govern such transactions unless as may be otherwise expressly provided in the agreement for sale/lease by the Group / Owner. The Group / Owner does not warrant or assume any liability or responsibility for the accuracy or completeness of any information contained herein.