A due diligence process must be completed to verify the legality of a property before committing to its purchase. When buying property in India, there are many legal property issues to consider, but what should you check for, to ensure your property is not illegal?
So, we are here to assist customers who are unsure about how to determine whether or not their property is legally clear. There are a few things you may take to ensure your property’s legal status. However, you may not always be able to perform all of the inspections on your own, so can go for a consultation.
Apart from the legality quotient, there are a few essential considerations to keep a check on.
- Scrutiny is less of an issue now because RERA laws are rigorous and unlawful constructions are rare since RERA’s inception in 2016. Get the RERA number and other information so you can look up additional information about the property on the RERA website.
- Always go for consultation to avoid any havoc about the current rate of property in that location so that you don’t end up putting up extra money in the sale.
- Check to see if the property you’re buying has a well-maintained society that’s officially registered so that most legal issues are taken care of and you’re less likely to be duped.
Now, let’s look at the legal aspects that should be examined before purchasing a property. Apart from the aforementioned criteria, the full chain of documents and agreements relating to the property is something you should not overlook before purchasing it. You should also get and check all other agreements and documentation related to the property’s purchase.
However, we are going to mention a few major points.
Inquire about the property’s ownership history and the title document.
As a first step, the buyer should conduct due diligence to verify the seller’s title, its nature and marketability, and the seller’s ability to offer a clear and marketable title that is free of encumbrances.
You could also check the details of previous owners in your area’s land records. It is a well-established legal concept that a person cannot transfer a title that is superior to his own.
Documents must be inspected for a minimum of 30 years (and if documents are not accessible, for a minimum of 12 years), and the seller may be asked to submit the following documents/information:
- Property title documents: Government order for grant, succession certificate, sale deed, gift deed, will, division deed, and other documents proving the transfer of title over time, ending in the vesting of property in the seller.
- Type of ownership: leasehold, freehold, or development right
If the seller wants to claim development rights to the land, the owners
Must sign a development agreement and a power of attorney in his or her favor.
- All title documents must be properly stamped and registered at the jurisdictional sub-registrar of assurances’ office.
- Information about the current or previous lawsuits.
- The seller’s capacity to provide original title documents
Request authorization from the bank
Requesting bank authorization is one of the greatest ways to conduct due diligence on a property. This is because banks do a comprehensive investigation before approving a property’s financing. They pay close attention to the legal elements.
Request building permits and land permissions.
You must ensure that the property you intend to purchase has been legally obtained and that all relevant authorities have given their approvals for the development and types of operations permitted on the grounds.
Request a Certificate of Encumbrance.
This is one of the most critical documents to have if you want to make sure the property has no outstanding legal obligations. This document verifies that the previous owners had no outstanding loans or mortgages.
Inquire about property slips.
This is to ensure that property tax is paid on time to the appropriate authorities. You can also use your property tax slips to see if the property has been lawfully registered.
Also, RWA (Residential Welfare Association) can provide you with registration paperwork if you ask for them.
In India, every property is registered with a housing society or social organization. Because this is a legal necessity in India, it is a good predictor of the property’s legal status.
These are some things to consider before making a property purchase to avoid any problems. You can also seek advice from a professional to reduce your stress.
