Legal checklist for buying a property (plots)

In India, considerable significance is attached to the ownership of property. Buying a property in our country is for the richit’s a sense of power and prestige, for the middle-class, it is a life time dreamand for the less privileged, it is a luxury beyond reach. So, the process of identifying the right property is concerned with several risks, legal and regulatory difficulties.Buyers are often at the hands of brokers / developers/ builders and motivated to make decisions favouring them by the word of promises andalluring offers. Hence, it is imperative for the buyer to exercise due caution and obtain appropriate legal advice to safeguardbefore buying a property.

1. Title and ownership of the seller to be verified

1. Title documents of the property – government order for grant, succession certificate, sale deed, gift deed, will, partition deed, etc., evidencing the transfer of title over the years, culminating in the vesting of property with the seller.
2. Nature of title – leasehold, freehold, or development right.
3. In case of the seller claiming development rights to the property, the development agreement and power of attorney, executed by the owners in favour of the seller.
4. Its mandatory that all title documents being duly stamped and registered at the office of the jurisdictional sub-registrar of assurances.
5. Khata registered in the name of the seller.
6. Information on pending or past litigation.
7. Availability of original title documents with the seller.

2. Verify identity of the seller

Similar to verifying the title to the property, the buyer should also ascertain the identity of the seller:

1. Residence status and nationality of the seller.
2. Identification of all owners, in case of properties held jointly.
3. Where the seller is a company, trust, partnership firm, society, etc., the constitution documents of the entity are necessary, to confirm its ability to own and transfer the property, besides ascertaining that the person executing and registering the sale deed is duly authorised.
4. Orders from the competent court, permitting sale of the property and appointing a guardian, where the property is held by a minor or person of unsound mind.

3. Conversion and land use permissions

Due to urbanisation, the buyer must examine the Master Plan and satisfy that the property is developed in accordance with the zoning plan – such as residential, commercial, industrial, public/semi-public, parks and open spaces, etc. Where actual use is different from the notified zoning, obtaining orders from the Town Planning Authority permitting change of land use, is mandatory.

4. Construction approvals

For purchase of apartment or land with constructed building, the buyer should also scrutinise the building plan / layout plan sanctioned by the local municipal authorities, along with approvals issued by government, statutory and regulatory authorities, for providing infrastructure facilities, water, sewage, electricity, environmental clearance, fire safety approval, etc.

5. Occupancy certificate

It is mandatory for the seller to obtain the occupancy certificate from the competent authority, prior to conveying the property. Use of the property, without obtaining occupancy, exposes the buyer to penalty under the applicable building bye-laws, besides the risk of demolition of the property.

6. Check status of tax payment

The buyer must verify with the municipal authorities that the seller has not defaulted on payment of property taxes.

7. Encumbrance Certificate

Its mandatory to obtain E.C before and after purchase of the property. 

8. Physical survey and access to the property

The buyer may undertake a physical survey and confirm the extent and measurement of the property. In the case of land, it is advisable to identify and demarcate the boundaries and access to the property and further, ascertain any other physical attributes that may impede enjoyment of the property.