When buying a property, ensuring that it has a clear title is crucial to avoid legal complications in the future. A clear title means that the property is free from any disputes, encumbrances, legal claims, or liens, and the seller has the rightful ownership to transfer the property. Below are the steps to check if the property you are buying has a clear title:
Steps to Check if the Property Has a Clear Title
1. Examine the Title Deed
The title deed is the most critical document that proves the ownership of the property. It must be in the name of the seller, with clear mentions of the property’s location and boundaries. You should:
- Verify the original title deed, not just photocopies.
- Ensure that the seller is the legal owner and has the right to sell the property.
- Check the chain of ownership for the last 30 years to see if the property has changed hands legally.
2. Obtain an Encumbrance Certificate (EC)
An Encumbrance Certificate is a vital document that reveals whether the property is free from any financial or legal liabilities such as mortgages, unpaid loans, or disputes. You can get the EC from the Sub-Registrar’s Office where the property is registered. The EC will show:
- All registered transactions relating to the property.
- Any pending loans, liens, or legal claims against the property.
- A “nil” encumbrance means the property has no encumbrances.
3. Check the Sale Deed
The sale deed is another essential document that confirms the sale of the property to the current owner. When reviewing the sale deed:
- Ensure it is registered in the Sub-Registrar’s office.
- Verify that all terms and conditions of the sale are clearly mentioned, especially the transfer of ownership and the payment details.
- Make sure that the property is being sold by the rightful owner.
4. Verify the Property Tax Receipts
Checking the latest property tax receipts will help you ensure that the seller has been regularly paying taxes, and there are no outstanding dues on the property. You can:
- Request receipts for the last few years.
- Cross-check the property tax number with the local municipal authority.
5. Request the Mutation Document
Mutation refers to the process of recording the change in ownership in the local land revenue office after a sale or transfer. The mutation document is crucial for confirming that the property has been legally transferred to the current owner in the revenue records. You can:
- Ask for the mutation records from the seller.
- Visit the local Municipal Corporation or Revenue Office to check whether the property is properly mutated.
6. Verify Legal Clearances
For properties under construction or newly developed, you need to ensure that the property has received all legal clearances from the authorities. This includes:
- Building plan approvals from the municipal authority.
- Land-use approvals for the proper use of land.
- Environmental clearance, if applicable.
7. Check for RERA Registration
If you are buying a property in a real estate project, ensure that the project is registered under the Real Estate (Regulation and Development) Act (RERA), 2016. RERA registration ensures that the project complies with legal requirements, and it gives buyers access to important information such as approvals, delivery timelines, and potential litigations.
You can verify the RERA registration by visiting the respective state’s RERA website and searching the project details.
8. Review the Possession Certificate
If the property is ready for possession, check the Possession Certificate issued by the local authority. This document certifies that the possession of the property has been handed over to the current owner by the builder or developer.
9. Check for Land Use and Zoning Permissions
Make sure that the property is being used for the purpose it is designated for. For example, land marked for agricultural use cannot be used for residential or commercial purposes unless proper permissions are obtained. You can check these records with the local Urban Planning Department or Revenue Department.
10. Hire a Lawyer for Legal Due Diligence
To ensure the property has a clear title and to avoid potential risks, it’s highly advisable to hire a property lawyer to conduct legal due diligence. The lawyer will:
- Scrutinize all legal documents.
- Verify the title of the property.
- Ensure that there are no hidden legal issues such as pending litigations, government acquisitions, or boundary disputes.
Documents You Need to Verify for a Clear Title
- Title Deed: Verifies ownership.
- Encumbrance Certificate: Ensures no pending debts or claims.
- Sale Deed: Proof of past transaction and ownership transfer.
- Mutation Document: Confirms the property is in the name of the current owner.
- Property Tax Receipts: Ensures no outstanding dues.
- RERA Registration (for new projects): Ensures compliance with laws and regulations.
- Possession Certificate (for ready properties): Confirms legal possession has been transferred.
FAQs on Checking Property Title
- What is the importance of a clear title in property purchase? A clear title ensures that the seller has full ownership and the right to sell the property. It also guarantees that there are no disputes, encumbrances, or legal claims against the property.
- Can I check property documents online? In many states, you can check property details, encumbrance certificates, and title information online through the respective state’s land records portal or RERA website.
- What happens if I purchase a property with a defective title? If the property has a defective title, you may face legal challenges, including the risk of losing the property. The sale may be considered invalid, and you might have to go through lengthy legal proceedings to resolve the issue.
- How can I verify if the property is mortgaged? The encumbrance certificate will show if the property is mortgaged or has any other liabilities attached. You can also check with the Sub-Registrar’s Office or ask for loan clearance documents from the seller.
- What should I do if the property has multiple owners? If the property has multiple owners, ensure that all the co-owners are in agreement with the sale, and that all of them sign the sale deed. Also, verify the ownership structure through legal documents.
By following these steps and verifying the relevant documents, you can ensure that the property you are buying has a clear title and is free from any legal complications.
Disclaimer: This information is intended for general guidance only and does not constitute legal advice. Please consult with a qualified lawyer for personalized advice specific to your situation.
Advocate J.S. Rohilla (Civil & Criminal Lawyer in Indore)
Contact: 88271 22304