Before you buy a property, you must check all property documents to make sure that you buy a genuine property. The documents that need to be checked are different for under construction and ready to move properties. Here is a list of all property documents to check before buying a flat or plot.
Property Documents to Check Before Buying a Flat or Plot
Under Construction Property
At the time of Booking
1. Land Records
When you want to book a new property, ensure that the builder owns the land where he is proposing the project. Land Records give details about ownership, rights, obligations and mortgages of the property. You can check land records with the Survey Nos. Nowadays, land records for most states are made available online. For more details, check out Land Records Guide.
2. Land Use Certificate
Before developing any property, a builder needs Land Use Certificate or Change of Land Use (CLU) certificate from the urban authority. Residential projects cannot be built in a commercial or industrial zone or on agricultural land. You can ask the builder to produce a copy of Land Use or CLU Certificate.
3. Layout Approvals
Many builders sell properties under soft launch without getting layout and building approvals. They will tell you that rates will go up significantly once all approvals are received. But never fall into this trap as approvals may not come anytime soon and you can get stuck for a long time. You should never invest in a project which has not received approvals. If any builder avoids showing you the copy ofapproved layout, you should refrain from investing in such project.
4. Master Plan
Builders and property consultants will often show you upcoming infrastructure projects like Airport, Metro, Expressway, SEZ etc. on the brochure. Again a word of caution here. A news item should never be the basis of such claims. You can cross check these with the approved Master Plan of the city. In the Master Plan, you can also check whether the project falls into residential zone or not. Check out Master Plans of Indian Cities.
5. No Objection Certificates & Clearances
The builder needs to obtain clearances from Electricity, Water, Fire and Safety authorities and environment clearance etc. Make sure that the builder has received all clearances.
6. Certificate of Commencement
A Certificate of Commencement, given by the Town Planning Department, is mandatory to commence any construction of a property. This certificate is given only once all other approvals and clearances are obtained by the builder.
7. Allotment Letter
Once you give the booking amount, the builder will sign an allotment letter with you. It will mention payment plan and other important agreement clauses. Before you handover booking amount cheque, make sure that payment plan and other clauses are clear to you. You should ensure that there is a penalty clause for any delay in possession.
8. Builder-Buyer Agreement
Once you pay 20-30% of basic cost of property, the developer will signBuilder-Buyer Agreement with you. This will be a detailed agreement that will have layout plan, detailed specifications & features of the property. It will mention the possession time & penalty amount in case of delay. Make sure that you go through the agreement completely before you sign on it.
9. Completion Certificate
Completion certificate is issued by Municipal Corporation once the project is completed as per the approved layout plan.
10. Occupancy Certificate
Occupation Certificate is also issued by Municipal Corporation after ensuring that basic amenities like Electricity Connection, Water Supply, Sewage Connection etc. are provided as per the approved plan.
Before you are handed over possession, make sure that the builder has received Completion Certificate and Occupancy Certificate.
At the time of Possession
11. Sale Deed Registration
Once the project is complete in all respects and has received Completion and Occupancy Certificates, the Builder will transfer the property in your name by executing a Sale Deed that will be registered at the Registrar’s office. Sale Deed is the main ownership document and you should keep it safely. In case, you have taken a home loan, original copy of Sale Deed will be handed over to the Bank till the time you retire your complete loan.
12. Possession Certificate
Once, Sale Deed is registered in your name, the builder will give you possession certificate after handing over physical possession of the property.
Ready to Occupy Property
1. Original Title Deed
In a Ready to Occupy property, the first document that you should see is the title deed. Confirm that the property is in the name of the seller and he has the full right to sell it. Always insist on seeing the original deed to make sure that the property is not mortgaged. You have to also make sure that the property is not already sold in part or full to anybody else. Do not buy a property if the title is not clear. You can hire a lawyer for title verification to be sure.
2. No Encumbrance Certificate
You should also make sure that the plot or house does not have any legal dues. An encumbrance certificate, available from the sub-registrar office where the Sale Deed is registered, states any legal dues and complaints against the said property. You can ask seller to provide “No Encumbrance Certificate” for minimum 13 years or to have more clarification, you can get encumbrance certificate for last 30 years.
3. NoC from Bank in case of Bank Loan
In case the seller has taken a home loan and the property is mortgaged with a Bank, the seller should take a No Objection Certificate from the Bank or if all dues are cleared, then a No Dues Certificate.
4. Share Certificate
In case you are purchasing a Cooperative Group Housing Society Flat, you should check the original Share Certificate issued by the Society that mentions the name of the owner.
5. Entire Chain of Documents
You should ask the seller to show you the entire chain of documents right from the original allotment to the present seller. The transfer of property can either happen either by way of Sale or Gift or Inheritance. In case of sale transfers, the seller should be able to produce all Sale Deeds since original allotment. Similarly, he should be able to present any gift deed, will or nominations etc. You should also check Share certificates right from the original allottee.
This will give you a fair idea of the titles and title transfers.
6. Utility Bills & Tax Receipts
You should check that all Utility bills like Electricity, Water, Gas & Telephone bills and Society Maintenance Dues are paid up to date and carry the name of present owner.
Property taxes are due to the government and are a first charge on the property. You should inspect latest property tax receipts. Ensure that they carry the seller’s name and that all taxes are paid since the beginning year of possession. You can also check property tax dues from the Municipal Corporation office. In case of any dues, ask the seller to clear them before you purchase the property.
7. Society Related Documents
At a convenient time, the seller can facilitate your visit to the society where you can inspect society registration documents, property card, occupation certificate and approved layout plans etc. In case, you are taking a home loan, the bank may ask a copy of layout plans or any other documents. You can collect a copy of any such document during your visit to the society.
8. Possession Certificate
In case, you are buying a property developed by a private builder, you should check the possession certificate and collect it at the time of sale deed registration.
9. No Objection Certificate (NoC) from Society
You will also need to get a No Objection Certificate from the Society stating that they don’t have any problems in transferring the flat to your name subject to all payments and agreements between buyer and seller.
10. Sale Deed Registration
Once you have checked all property documents, you can make full payment to the seller. Then you will have to execute the Sale Deed and get it registered at the Registrar’s office upon payment of appropriate stamp duties.
11. Change in Share Certificate
Upon execution of Sale Deed, you will have to submit a copy of Sale Deed along with membership transfer form duly signed by both buyer and seller to the society. The society will then issue new share certificate with your name as the new owner.
That concludes our list. We hope that now you can do better due diligence of property documents before you buy a property. Did we miss anything? Please let us know.
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