Precautions to take while buying a property

Precautions to Take While Buying a Property in India

Purchasing a property is a significant financial decision, and it requires thorough due diligence to avoid legal complications and financial losses. Whether you’re buying residential or commercial property, taking specific precautions ensures that your investment is secure and free from future disputes. Here is a detailed guide on the essential precautions to consider while buying a property in India:

1. Verify the Title of the Property

  • Clear Title: Ensure that the property has a clear and marketable title. This means that the seller should have full ownership of the property and the right to sell it. A thorough check of the title deeds over the past 30 years is often recommended.
  • Encumbrance Certificate: Obtain an encumbrance certificate from the sub-registrar’s office to verify that the property is free from any encumbrances such as loans, mortgages, or legal disputes.

2. Check the Seller’s Identity and Authority

  • Seller Verification: Verify the identity of the seller to ensure they are the rightful owner. If the seller is an individual, check their identification documents like PAN, Aadhaar, and passport. If the seller is a company, verify the authority of the person signing the documents on behalf of the company.
  • Power of Attorney (PoA): If the property is being sold through a PoA holder, ensure the PoA is valid and registered. The PoA should also clearly authorize the holder to sell the property.

3. Verify Land Use and Zoning Permissions

  • Land Use: Confirm that the property is being used according to the sanctioned land use. For example, residential property should not be constructed on agricultural land without proper conversion.
  • Zoning Laws: Check local zoning laws and ensure that the property complies with them. This is especially important for commercial properties.

4. Check the Approval of Building Plans

  • Building Plan Approval: Ensure that the building has been constructed according to approved building plans. Unauthorized constructions may be subject to demolition by local authorities.
  • Completion Certificate: If the property is newly constructed, verify that the builder has obtained a completion certificate from the local municipal authority. This certifies that the construction complies with approved plans and other statutory regulations.

5. Inspect the Property for Physical and Structural Defects

  • Physical Inspection: Physically inspect the property for any visible defects, structural damage, or illegal encroachments.
  • Construction Quality: If buying a new property, ensure that the construction quality meets the standards promised by the builder.

6. Check for Litigation and Disputes

  • Pending Litigation: Verify that the property is free from any pending litigation. This can be done by checking the records at the local court or consulting a legal expert.
  • Family Disputes: In the case of ancestral or inherited property, ensure that there are no ongoing family disputes that could affect the sale.

7. Verify the Property Tax Receipts

  • Property Tax Payments: Ensure that all property taxes have been paid up to date. Any outstanding dues could become your liability once the property is transferred to your name.
  • Municipal Dues: Check for any other dues, such as water or electricity charges, that may be pending.

8. Obtain No Objection Certificates (NOCs)

  • NOCs from Authorities: Depending on the property type and location, you may need to obtain NOCs from various authorities like the municipal corporation, electricity board, water supply department, and pollution control board.
  • Society NOC: If purchasing a property in a cooperative housing society, obtain a NOC from the society confirming that the seller has no outstanding dues and that the sale is approved by the society.

9. Verify the RERA Registration

  • RERA Compliance: If buying a property from a builder, check if the project is registered with the Real Estate Regulatory Authority (RERA). This ensures that the builder complies with the regulatory norms and offers protection to the buyer in case of project delays or other issues.

10. Understand the Financial Aspects

  • Home Loan Eligibility: If you’re financing the purchase through a home loan, check your loan eligibility with various banks. It’s also wise to have a pre-approved loan to know the maximum amount you can borrow.
  • Hidden Costs: Be aware of any additional costs such as maintenance charges, parking fees, registration fees, stamp duty, and GST (if applicable). Factor these into your budget.

11. Conduct a Legal Due Diligence

  • Hire a Legal Expert: Engage a lawyer specializing in property law to conduct due diligence. They can review all documents, ensure legal compliance, and identify any potential risks.
  • Drafting and Vetting Agreements: Ensure that the sale agreement and other related documents are drafted and vetted by your legal counsel to safeguard your interests.

12. Review the Sale Agreement

  • Terms and Conditions: Carefully review the sale agreement to ensure all terms and conditions are clearly stated, including payment schedules, possession date, penalty clauses for delays, and responsibilities of both parties.
  • Specific Clauses: Include specific clauses that protect your interests, such as a clause for refund or compensation if the builder fails to deliver on promises.

13. Registration and Stamp Duty

  • Proper Registration: Ensure that the sale deed is registered with the sub-registrar’s office to legally transfer ownership of the property to your name.
  • Stamp Duty Payment: Pay the requisite stamp duty as per the state government’s regulations to avoid any legal issues in the future.

14. Possession and Handover

  • Possession Certificate: Upon final payment, ensure that you receive a possession certificate from the seller. This certifies that the property has been handed over to you in a legal manner.
  • Inventory Check: If buying a furnished property, check the inventory list and ensure all items listed in the sale agreement are in place.

Conclusion

Taking these precautions while buying a property in India helps safeguard your investment against legal disputes, financial risks, and unforeseen complications. Engaging professionals like legal experts, financial advisors, and real estate consultants is highly recommended to ensure a smooth and secure property transaction. Always remember, thorough due diligence today can save you from significant troubles in the future.

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

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