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9 important documents to check before buying property

  • Here are 9 Important documents every buyer should check before buying property
  • We list the importance of these documents, what the content each document should  contain and from which government offices you can procure them
  • Also find important pointers one should look out for when vetting these documents
9 documents to check before buying property

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:

  • Before executing a sale deed, one should check the sale agreement to ensure that all terms and conditions laid therein have been complied with and confirm that all charges and dues have been paid off
     
  • Registration of the Sale Deed in the Sub Registrar office of property jurisdiction is mandatory and should be done within four months from the date of execution, or the deed will be deemed invalid.

 

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

  • Full name and address of the buyer and the seller
     
  • Exact location of the property
     
  • Total area of the property
     
  • Total amount to be paid for the purchase/sale of property
     
  • Advance amount that has been paid
     
  • Dates agreed upon for subsequent payments
     
  • The exact date the seller would hand over the original property related documents to the buyer and the date of subsequent possession of the property.

 

 

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:

  • Ensure that the title deed is in the name of the person who is selling the property 
     
  • Always insist on seeing the original title deed; a photocopy of the title deed is not sufficient evidence to prove that he owns the property
     
  • Make sure to obtain the title deed immediately after the sales deed to avoid paying a penalty

 

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.

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