Document checklist before buying a Property – To Avoid Mouse Trap

These Documents Enough?

Just how many legal issues should I keep in mind before buying an immovable property in India?”

My aunt talks about encroachment.”

My best friend claims he was duped into buying a farm house with a fake title deed.”

This article is written, keeping in mind all of those people who are struggling with similar issues, i.e. determining what the legal issues are to be kept in mind when buying a house in India.

Mouse Trap

Yes, many people in India try to use earth-sized loopholes in law to construct illegal commercial buildings, multi-storey apartments without necessary documents.

We as common folk, knowingly or unknowingly rush into buying these kinds of properties, if we feel the seller is demanding a cheaper price from us. What we do not realise is the fact that, should any legal complication arise in the near future we will not stand a chance to justify our position in court.

So keep your eyes open and check if you have the below documents for the property you own or the property, you are going to buy.

1. Title Deed
A title deed is a set of documents which gives a person the right over his/her property. It also establishes the change in ownership of the property and is an essential document for future selling of the property.
Note: Any change in property ownership should be registered in respective sub-registrar office within four months of transaction.

2. No Encumbrance Certificate
India is a land where people get many free goods. An encumbrance is a situation in which the property you are going to buy might be mortgaged. Hence, this certificate is mandatory to confirm no such discrepancies are found in it. Therefore, we need a certificate of encumbrance from 13 years to the date of registration.

3. Joint Development Agreement (JDA):
In most of the cases, the builder is not the land owner in India. Hence, an agreement which establishes the partnership between the builder and land owner is required and JDA does exactly that. This helps us when there is a feud between the builder and land owner in the years to come.

4. Power of Attorney (GPA)
This is a document which gives a person to act on his/her behalf. In case a transaction is made through GPA it is extremely important that this is documented and sustenance is in vogue. This will check whether the authorized person is doing his duty

5. Building Plan Sanction:
A building plan that is sanctioned from the concerned government authority for construction of a building is a Building Plan Sanction. This is different for different states. A building that is without a BPS may be demolished or may even be lacking in the desired attributes that the building should possess. Hence make sure to check for the Building Plan Sanction before making the purchase.

6. No Objection Certificate
A No Objection Certificate (NOC) is required from all those who can go to court citing their own reasons. NOC needed from:
Electricity board
Water works
Airport Authority
Pollution control board and all other potential objectors

7. Supplementary Agreement
A document correcting all those mistakes in principal document is needed for the sale to be future-proof. A Supplementary Agreement takes care of the same.
8. Sale and Construction Agreement between Builder and First Owner
This is to execute mutually agreed plans between the purchaser and vendor within specified period.

9. Possession Letter and Receipts
This is required for proof of possession in case of future disputes.

10. Demand Letter
This is a letter which authenticates completion of work as per schedule and demands money from the buyer for the completed work.

11. Conversion Order
The builder has to make sure he gets a letter from desired authority stating that agriculture land is converted for non-agricultural purposes.

12. Auction Sale Document:
A certificate which declares that the specified land or property was bought from auction. This may or may not be applicable, depending on the circumstances.

13. Completion Certificate
This is obtained from the respective municipal authorities and it states whether the builder has actually followed norms laid down by government.

14. Legal Opinion
Last but not the least a legal opinion is a must nowadays especially with the lots of fraudsters lurking around every sale and purchase.

Bonus: Easy Way Out
You can alternatively go to a bank and ask for a home loan and they will take care of all the things needed, in most cases.

Author: Akshay Singh Ralhi: Akshay Singh Ralhi is a final year student at Symbiosis Law School, Pune. He holds a Diploma in Advanced Entrepreneurship Management from Gujarat National Law University and a Diploma in Cyber Laws from Asian School of Cyber Law.

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