Real estate investing is very capital intensive and mistakes made during the process can cause big problems for the buyer. This makes it imperative for the buyer to do due diligence when examining the real estate paperwork.

 Interestingly, while land can be a physical asset, a claim of title alone cannot prove who owns it. This must be verified by multiple documents proving ownership of the asset. 

 Appropriate legal advice, document review and verification of relevant information about the property can help buyers ensure that their investment brings them peace of mind. 

 This article details the things to consider before buying a land parcel in India and the documents that the buyer needs to obtain and verify before they are ready to sign the contract.

1. Checklist for Buying a Home 

 It is an established rule of law that a person cannot have a title better than the one he has. As a first step, the buyer conducts due diligence to determine the existence of an ownership interest with the seller, the nature of the property and its marketability and whether the seller can transfer clear and marketable ownership. Documents must be verified for a minimum of 30 years (or 12 years if  documents are not available) and the seller may be required to provide the following documents/information: 

 Property Name Documents : Government deeds, inheritance certificates, sale deeds, gift deeds, wills, division deeds, etc. that prove that ownership has been transferred over the years and ultimately to the seller.

Types of Ownership:

Leasehold, Freehold or Development. 

A Development Agreement and Power of Attorney are signed by the owner in favour of the seller if the seller claims development rights to the property.

 All title documents are duly stamped and registered with the relevant Sub-Registrar office.

 Khata registered on behalf of the seller. 

 Information about pending or past litigation. 

 Availability of original title documents from sellers.

2. Verify the identity of the seller 

 Similar to verifying ownership of the real estate, the buyer must also verify the identity of the seller and certain conditions that govern the seller’s ability to transfer the property. The following examples are provided for illustration purposes. 

 If an individual, the residency status and nationality of the seller and whether the sale requires government approval. Identification of all owners of common property. Is the seller a corporation, trust, partnership, corporation, etc.? Company incorporation documents are necessary to confirm the ability to retain and transfer ownership and to ensure that persons executing and registering deeds of sale are properly authorised. An order of a court of competent jurisdiction authorising the sale of property and appointing a guardian if the property is owned by a minor or mentally ill. Documents that need to be verified before buying a property include  Aadhaar number, PAN number, passport, income tax return, payslips and other documents that usually help verify the identity of the seller.

3. Diversion and Land Use Permits 

 As urbanisation increases and production areas merge with urban conglomerates, the conversion of land for non-agricultural purposes becomes more important. Secondly, the buyer should review the master plan and ensure that the property is developed according to the zoning plan such as residential, commercial, industrial, public/semi-public, parks, and open spaces if the actual use is different. there is. Notified zoning is obligatory to obtain orders from city planning authorities authorising land use changes. Remember to check these things before buying land.

4. Building Permit 

 So let’s take a look at the documents you need to check before buying the land on which the building is built. When purchasing an apartment or land with a constructed building, the purchaser must have a building plan/site plan approved by the local government authority and issued by the government, statutory and regulatory bodies for the provision of infrastructure facilities, water supply, and sewerage. You should also check the permissions granted. , electrical, environmental impact assessment, fire protection certification, etc. 

 It is necessary to request a copy of the NOC of each department such as the  Environment Agency, the Environment Agency, the Sewerage Agency, and the Transport and General Affairs Department from the builder, which is the “refusal notice” or initial permission required when building a building.

5. Move-in certificate 

 The seller must obtain a certificate of occupancy from the relevant authorities before handing over the property. Vacant use of property exposes the purchaser to penalties under applicable building regulations, in addition to the risk of demolition of the property.

6. Tax payment status 

 Delinquency in property taxes puts a strain on real estate and affects its marketability. Therefore, the buyer must prove to the city authorities that the seller is in arrears with property taxes. 

 Get all utility bill receipts from the seller. Please note  that any outstanding real estate, utility bills, or other fees will need to be paid once the property is transferred in your name. 7. Burden 

 A search of the Deputy Judicial Registry or the Ministry of Enterprises’ official web portal  (if the seller is a legal entity) will reveal information about the mortgages registered on the property. For example, you can contact the Stamp and Register Department of  Maharashtra for more information on Maharashtra’s immovable property liability. As a precautionary measure, the purchaser may also place an advertisement in newspapers before the transaction is completed. In that case, a claim may be made by an interested third party. 

 Eighth. PHYSICAL INVESTIGATION AND PROPERTY ACCESS 

 Buyers can perform a physical inspection to confirm the extent and dimensions of the property. For land, in addition to identifying other physical characteristics that may affect the use of the property, it is advisable to identify and demarcate boundaries and access to the property.  

 9. Compliance with the Real Estate (Regulation and Development) Act 2016 (RERA) 

  RERA stipulates that developers must register their projects with a legally established institution. Buyers looking to purchase property for projects within the RERA are advised to ensure that the property is registered with the authorities. The information available on the official RERA web portal for each state also details all cases/complaints filed against the developer of the project, and any developer defaults, if any, so that the developer and project reliability, helping buyers to Make an informed choice. 

  Buyers should be aware that the law also requires all real estate agents to be registered with the state’s RERA to operate legally. please hire Also note that the agent must renew her RERA registration regularly. Make sure you are dealing with the right people. One of the biggest advantages of regulators is that they require standard procedures and penalties for violators.

Risks of buying property  without due diligence 

 Unless there is absolute confidence in the seller’s credentials and ownership of the property is not properly supported by documentary evidence, the buyer should avoid entering into any transaction, however lucrative it may appear. . Some people try to sell controversial properties at low prices. This prospect may seem appealing at first but ultimately proves to be a major problem. Also, never approach a seller who wants you to use your accrued money to save on taxes. This can also lead to many future problems. Some quick tips for buyers: 

 Never agree to sign a dotted line without doing your research.  Even if you are an agent or developer introduced by an acquaintance, you should check your RERA ID and registration details. Never agree to give money in the black instead of a tax refund. Do not agree to buy or sell property on behalf of another person. 

 Need to check your PoA?  PoA stands for Power of Attorney and is a legal instrument that authorises another person to act on behalf of the actual owner as the rightful owner. Please review these documents to determine the rights of  PoA holders when purchasing a property. 

 Will the bank do due diligence on the buyer’s behalf?  If you’re a prospective homebuyer who has submitted paperwork to your bank and is waiting for your mortgage approval, rest assured that your bank will be on the lookout. But don’t leave it up to the bank. The number of property-related cases brought to Indian courts each year is a reminder that you need to be careful when buying a home.

Do I need to see a PoA? A PoA stands for Power of Attorney, a legal instrument that authorises another person to act on behalf of the actual owner as the rightful owner. Please review these documents to determine the rights of  PoA holders when purchasing a property. 

 Will the bank do due diligence on the buyer’s behalf?  If you’re a prospective homebuyer who has submitted paperwork to your bank and is waiting for your mortgage approval, rest assured that your bank will be on the lookout. But don’t leave it up to the bank. The number of property-related cases brought to Indian courts each year is a reminder that you need to be careful when buying a home. 

 Confirmation documents before purchasing a second-hand condominium 

 Potential homebuyers planning to purchase a resale property should keep certain things and rules in mind to make an informed decision. On the one hand, all the documents required for the first sale of real estate are also required for resale properties. When buying an apartment in a condo, the original title deed and proof of title are important documents to consider. Homebuyers should check to see if the property has a  building plan approved by the local government. 

 A Certificate of Completion  (CC) or Certificate of Occupancy  (OC) issued by the local government after a project proves that the property was constructed in accordance with approved plans and building codes. You will need it when applying for loans to banks and financial institutions, and for using water and electricity. Proof of ownership must also be requested. This document is issued by the builder to the original owner and will not be reissued in case of resale. However, the seller must hand over the same to the new buyer.  Things to check before buying a home include confirming that the seller has paid any pending dues  to the company or home 

 In addition, the liability certificate is an important document that proves that you are not financially or legally responsible for your property. You can obtain a certified copy of the register at the registry office where you registered it. For example, the Maharashtra Real Estate Encumbrance Certificate can be obtained from his SRO under the Department of Stamps and Registration, Maharashtra.  See also: Will stamp duty be refunded if a property transaction is cancelled? If choosing a resale property,  the buyer must confirm the change deed and obtain a copy of the previously registered contract. 

 If the property is mortgaged,  the owner must promise the bank that they agree to provide the buyer with documentation of their title in the event of a mortgage foreclosure. When transferring the money to the seller’s account, the bank will issue all original title papers and his No Objection Certificate (NOC).

The importance of checking utility costs when purchasing a property 

 Title deeds are one of the most important documents that form the basis of legal evidence for the sale and transfer of title to the property in question. A Deed of Sale registered with the Maharashtra Stamps and Registration Department has detailed information about the property in question and this information is jointly determined by the buyer and seller. The deed will include details such as the terms and conditions and the selling price of the property. 

 The Importance of Khata Certificates and Extracts When Buying Property 

 A kata is a document that proves that a  property has been constructed in accordance with local laws, approved plans, and regulations. When purchasing real estate, it is important to check its validity and legal status. A Kata certificate is required not only when registering a new property, but also when transferring property. 

 Importance of a sales contract when purchasing a property 

 Title deeds are one of the most important documents that form the basis of legal evidence for the sale and transfer of title to the property in question. The sales contract contains detailed information about the property in question, and this information is jointly determined by the buyer and seller. The deed will include details such as the terms and conditions and the selling price of the property. 

 What are the characteristics of the title deed that should be checked when buying real estate? The deed of sale must be registered at the office of the sub-registrar having jurisdiction over the property. The contract of sale must be registered by him within four months from the date of signature. It is one of the important steps in buying real estate. 

 If the title deed is not registered within this period, a penalty must be paid. Otherwise, the deed registration will be void. A deed of sale is sometimes called a “deed of title,” a “mother deed,” or a “deed of assignment.” The transfer deed is the most important document in any future property sale. A deed of transfer serves as a document proving ownership of a property. You should think carefully before buying a property.  Before entering into a contract of sale, the buyer must ensure that the property in question has clear ownership. Property sellers must settle all legal payments such as utilities, water bills,  property taxes, utility bills, and maintenance costs before issuing a title deed. Below is an example of a sales contract in India.