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Property Purchase Checklist: Legal Documents to Examine

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Last Updated on February 6, 2024 by Kanakkupillai

A substantial financial commitment is required when buying a house, and any errors made might cause major problems. As a result, it is essential to proceed cautiously and carefully check all documentation about the property before concluding the deal. Before buying a property in India, Kanakkupillai should carefully review a thorough list of documents.

Giving careful thought to a property’s location, surroundings, and especially the property’s legal documentation is crucial when buying a property to avoid issues in the future. There is no room for oversight among the numerous documents that require your signature since even the smallest inaccuracy could have serious ramifications in the future. Each document is significant and protects your ownership rights. Therefore, carefully read each document and understand its importance, leaving no room for doubt, as they all play a crucial part in buying a house.

Numerous important documents are required to purchase a property in India. 

1. Title Deed

The title deed is the most important of these. The title deed, which serves as the main document, formally documents the change in ownership of the property. It becomes essential to carefully review this paperwork to confirm that the seller has unquestionable rights to the property and is qualified to carry out its sale or subsequent mortgage. The title deed must only contain the seller’s name to comply with this requirement. Given that photocopies are frequently provided, getting the original documents is advised. This process helps establish the validity of ownership and offers information on the appropriate property uses, whether intended for residential or commercial uses.

Finding the legal status of the land where the property is located is also essential. Payment should be postponed until the property’s legal status has been unequivocally confirmed. A property may be acquired in several ways, including inheritance, after the original titleholder dies. To allow beneficiaries to transfer their separate shares, a will must be registered with the relevant authorities in cases where one exists. Despite having a will, there have been cases where property has changed hands naturally, which is considered to be against the law. As a result, it is wisest to guarantee strict adherence to legal requirements.

2. Type of Property

When buying real estate, it is crucial to comprehend the different forms of property. Properties can be classified as freehold, leasehold, or government housing. A freehold property is one in which the purchaser perpetually owns the ground and the structure. On the other hand, the right to dwell in a leasehold property is granted for the duration specified in the lease agreement. Since freehold properties grant full ownership rights, the owner can make decisions concerning the property without the constraints that frequently accompany leasehold agreements, making them more attractive.

3. Land Measurement

It is wise to double-check the land measurement before completing the property registration. Examine the measurement information in the property paperwork and hire a surveyor to check correctness. This stage guards against errors and guarantees that you know the exact dimensions of the property before completing the registration process. A surveyor’s knowledge verifies the land’s size, reducing uncertainty and potential disagreements. Making informed decisions and averting future issues with property lines or encroachments require accurate measuring information.

4. Tax Receipt and bill

Property owners must pay yearly fees to the government, known as property taxes. Due to the considerable financial ramifications of property taxes, it is essential to confirm that the seller has paid previous tax bills and has kept receipts. It’s also crucial to look into any notices or outstanding legal issues connected to the property. Unpaid utility bills can occasionally be transferred to the buyer. Such outstanding payments ought to be noticed and taken into account.

Utility bills and property tax receipts prove the seller’s ownership rights. The buyer can confirm the original landowner through the registrar’s office using the land’s survey number if the seller does not have the required tax receipts. Records of rights and survey records are two more types of documents that can be used to prove ownership. Manish Saryal, an attorney, highlights the significance of these records in establishing property ownership.

5. Encumbrance Certificate

When buying a property, it’s important to consider the Encumbrance Certificate. It ensures that there are no liens or mortgages on the property. The owner must pay any unpaid debts associated with a mortgaged property before selling it. The sub-registrar’s office can provide a certificate attesting to the property’s unencumbered status and detailing its transaction history. This vital step protects the buyer from potential liens or issues related to prior transactions by ensuring the property’s legal and financial clarity. Making a wise and secure real estate investment selection requires carefully reviewing the Encumbrance Certificate.

6. No-Objection Certificate (NOC) 

A No-Objection Certificate (NOC) is paramount in real estate transactions. It confirms that the building complied with building codes during its development. This document is essential for complying with the law. Additionally, a NOC might be required when applying for a home loan. It is advisable to get a copy to ensure that the builder follows the rules. The NOC certifies the property’s authenticity and adherence to regulations, protecting buyers from post-purchase legal problems. It also speeds up the loan approval procedure, making it a crucial document in real estate deals that guarantees legality and financial stability.

7. Pledged Land

Property owners sometimes pledge their assets to get bank loans. A prospective buyer must ensure that the owner has fully returned the loan and has no outstanding obligations. Additionally, ensure the owner obtains a No-Objection Certificate (NOC) from the bank, which attests to the release of the property from the mortgage.

Although buying a property is a big decision, it doesn’t have to be difficult. Despite its size in terms of money, it is crucial to execute it well. The process might be made simpler if you enlist the aid of a reputable real estate agent. It is recommended to take the time to fully understand the nuances to avoid mistakes. In the end, careful planning produces a secure real estate deal.

8. Power of Attorney (PoA)

A power of attorney (PoA) is a legal document that gives someone the right to act on another person’s behalf in certain situations or transactions. When someone is operating on behalf of the property owner in a real estate transaction, such as a property sale, registration, or management, a Power of Attorney may be necessary.

To avoid misuse or disagreements, it’s imperative to ensure the Power of Attorney is properly written and enforceable. It is strongly advised to seek a legal advisor while drafting or using a Power of Attorney to verify its accuracy and compliance with the law.

Conclusion

Understanding the necessary legal documentation is essential before starting a property acquisition in India. Contact Kanakkupillai for detailed insights into these documents. Once you have the required documentation, you can confidently search for the ideal house.

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