MONEY
Here are nine important documents every buyer should check before making the final payment for a property.
1. Sale Deed
The Sale Deed is the main legal document that proves the sale and transfer of ownership from the seller to the buyer of the property.
A word of advice:
Information that a sales deed must contain
The Sale deed must be executed on a non-judicial stamp paper and should mention the following details
2. Encumbrance Certificate
An encumbrance certificate is a document that proves the property in question has no pending legal dues and can be sold. This document is very important when applying for a home loan. Banks generally ask for 15 years of detail in the encumbrance certificate.
An encumbrance certificate is mostly issued in the regional language of the place, in such cases an English translated EC will be provided with an additional fee
How to obtain an encumbrance certificate?
Step 1: Fill in Form 22 with all necessary details about the property including; name of the owner, property number and exact measurement and the number of years the EC is required for. The filled form should be affixed with a ₹2 non-judicial stamp and needs to be submitted to the sub-registrar’s office. A proof of the applicant’s name and address also needs to be submitted.
Step 2: A fee will levied on every of year the EC is required to be made for, even a fraction of a year is counted as full year.
Step 3: In around 15 to 30 days the registrar’s office will issue an encumbrance certificate. If the property has no pending dues a Form 16 will be issued. If there are pending mortgages, a Form 15 will be issued, which will contain details of the nature of loans pending.
3. Title Deed
The Title Deed is a legal document that proves the ownership of a property. When buying a property the Title deed needs to be transferred to the buyer’s name to establish ownership rights.
A word of advice:
How to obtain a Title Deed
Step 1: Obtain an encumbrance certificate from the sub registrar's office under whose jurisdiction the property falls to confirm there all legal dues on the property have been cleared.
Step 2: Submit an application for the title deed to the urban development authority.
Tip: Make sure you have a copy of the Sales deed and the encumbrance certificate in hand when applying for the Title Deed. In some states in India one can even apply for the encumbrance certificate online.
Step 3: Submit a copy of the lease cum-sale-document allotted to the original allottee to the urban development authority
Step 4: A transfer certificate for the property is issued once authorities have inspected the site or property.
Step 5: After satisfactory inspection of the site a title deed will be issued in the property owner's name and the property will be registered in the buyer's name at the sub registrar's office after paying stamp duty on the property.
4. Mother Deed
The mother deed traces the origin of ownership of a property. This legal document lists the details of all the previous owners. When buying a property, it is better to have a record of all previous owners to check for a possible invalid transaction that may lead to complications later on. Any missing transaction needs to be rectified with relevant supporting documents that can be obtained from registration authorities.
A word of advice:
The mother deed needs to be registered within four months of executing the transaction or one would be liable to pay a hefty fine to up to 10 times the cost of registration.
5. Commencement Certificate (In case of under-construction projects)
A commencement certificate is a document issued by the local authorities to the builder of a project. When buying into a pre-launch offer, make sure the builder has been issued the commencement certificate. It is mandatory for every building to have a commencement certificate, and purchasing an apartment in a building that hasn’t been issued one could lead to the eviction of the buyer. The buyer would also then be liable to pay a fine of around ₹50 per square metre.
6. Completion Certificate (In case of under-construction projects)
A completion certificate is issued to the builder by local authorities after completion of a project. This certificate will only be issued to the builder after satisfactory inspection of the building. The inspector will ascertain that the builder has followed the approved layout plan and that all safety norms have been adhered to.
7. Occupancy Certificate (In case of under-construction projects)
An Occupancy Certificate, awarded by Municipal Authorities, grants permission to the builder to occupy the building. This document will be issued to the builder after verification of supporting documents, adherence to building standards, adherence to fire safety standards and adherence to electrical safety provision. The examiner will also check for water supply and disposal provisions.
As per the law, no person can move into a building without a relevant occupancy certificate.
8. Release Certificate
A Release certificate states that the seller’s relatives have renounced over the property being sold. This is necessary for property that has been inherited by the seller or was part of a settlement between legal heirs of the original owner.
A word of advice:
Make sure the release deed has been signed by all members of the family that inherited the property.
9. Tax Paid Receipt
Property tax bills ensure that taxes for a property are paid up-to-date to the government or municipal authorities. Make sure to ask the seller for the latest tax receipts and make sure they are all in the seller’s name. In case the tax receipts are missing, one can approach the local municipal body along with the property survey number to confirm the ownership.