Introduction
In India, purchasing a Flat is a significant investment that requires careful attention to legal details, and any mistakes made during the transaction will cost the buyer a lot of money. The truth is that purchasing a home requires more than simply choosing a price and making the payment; you must first make sure that all the necessary paperwork is in order. This article primarily focuses on the flat purchase checklist that a potential homeowner must adhere to before making the decisive investment.
Flat purchase checklist before buying a flat
Title and ownership verification of a seller
- Title documents – Government order for grant, succession certificate, sale deed, gift deed, will, division deed, etc., show how the title has changed hands over the years, ultimately vesting in the seller.
- Title’s Nature – Leasehold, freehold, or development right are the three types of titles.
- The development agreement and power of attorney are signed by the owners on the seller’s behalf if the seller claims development rights to the property.
- Being correctly stamped and registered in the jurisdictional sub-registrar of assurances office are all title papers.
- Khata registered under the seller’s name.
- Information about current or former legal disputes.
- Original title paperwork may be obtained from the vendor.
Seller Identity Verification
- In your flat purchase checklist, ensure that if the seller is an individual, their place of residence, their nationality, and whether or not they need approval from the relevant authorities before the sale can proceed.
- Identifying each owner of a property, if there are many owners.
- In cases when the seller is a corporation, trust, partnership firm, society, etc. The entity’s constitution documents are required to confirm its authority to possess and transfer the property as well as to confirm the authority of the person signing and registering the sale deed.
- Where the property is held by a minor or a person who lacks capacity, orders from the appropriate court authorizing the sale of the property and appointing a guardian.
Construction Approvals
The buyer should carefully review the building plan and layout approved by the local municipal authorities when purchasing a flat or land with an existing building. They should also look over any approvals given by the government, statutory and regulatory bodies for the provision of infrastructure facilities like water, sewage, electricity, environmental clearance, fire safety approval, etc.
Rental and resale value of the property
Assess rental and resale values for informed real estate investment. Consider long-term living, renting, or selling prospects. Research area, connectivity, and access to schools, hospitals, and shopping for potential returns.
POA
Power of Attorney, or PoA, is a legal document that provides someone else the authority to act on behalf of the actual owner as if they were the legal owner. Check these documents to determine the rights of the PoA holder if you are purchasing a property.
Some quick tips
- Never consent to sign anything without first conducting your own investigation.
- Check the RERA ID and registration of an agency or a developer, even if they come highly recommended by individuals you know.
- Never consent to offer cash in lieu of tax breaks.
- Never consent to buying or selling a property on another person’s behalf.
Make sure to diligently follow this comprehensive flat purchase checklist before finalizing your decision to buy a flat.
Legal Documents Checklist
Checking all the legal compliances and relevant documentation before buying a property is important. Here is a checklist of all the legal documents required for purchase of property –
- Encumbrance Certificate – Ensure the property is debt-free. Perform encumbrance searches at the sub-registrar’s office for mortgages, liens, and third-party claims. Caution is advised for mortgaged properties. An Encumbrance Certificate (EC) reveals property history. Submit duplicate sale deed for EC application.
- Sale Deed – A sale deed, which is a component of the Registration Act, is among the most crucial documents for both the seller and the buyer to have when considering the purchase of a property. If a sale deed is not recorded, the transaction is not regarded as lawful.
- Mother Deed – Another crucial document to have when selling or purchasing a property is the Mother deed on your flat purchase checklist.
The buyer can track the ownership of the property in relation to the seller thanks to a mother deed. Before submitting the paperwork to the authorities, the seller must be able to verify the circumstances surrounding how he came to be in possession of the property, and they must be organized chronologically. If any information from the chronological order is missing, it is necessary to obtain it from the appropriate registration agency.
- Agriculture and non-agriculture land conversion certificate – On your flat purchase checklist, you must make sure that the property you are purchasing is not categorized as agricultural land. Any area that has been designated as agricultural land cannot be used for residential purposes; doing so will make it unlawful. To convert land use from agricultural to non-agricultural, a conversion certificate is required. A No Objection Certificate must be issued by the city’s town planning division before agricultural land can be used for non-agricultural purposes.
- No objection certificate – Wherever necessary, no objection certifications should be obtained. It is another crucial legal document required for purchase of property. A copy of the urban non-ceiling no-objection certificate as well as NOCs for water, electricity, and other utilities should be given to you by the seller.
- Land use certificate – The majority of you are likely already aware that it is unlawful to build a residential property in an area designated for commercial use. To confirm that the residential property you intend to purchase is in the residential zone and not in the commercial, agricultural, or industrial zones, you must submit an application to the development authorities of your individual city. Commercial purchases of residential homes should not be made without the urban development authorities’ consent.
- Khata certificate/ Extract – Khata, which translates to “account” in English, refers to the seller’s or the property owner’s account. A Khata extract should be on your flat purchase checklist. This is crucial for both transferring ownership of a property and registering a new property.
- Property tax receipts – To confirm that the seller of the property has paid the authorities all taxes due on the property for the previous three years, tax receipts should be examined. If you are purchasing a property that is being resold, you should get any prior property tax receipts.
- RERA certificate – As evidence that a property, project, or property agent has been registered with a state-level RERA body, a RERA (Real Estate Regulatory body) certificate is given to them. The RERA certificate has a registration number that enables them to conduct business legally. It contains all the details regarding the project, the developer, and the property. This certificate lowers the likelihood of fraud and protects buyers’ rights. Therefore, it is essential to include examining the RERA Certificate on the flat purchase checklist.
A few more legal documents required for purchase of property are – The occupancy certificate (OC), Probated will, Allotment letter, and Completion certificate (CC) etc.
