Buying a property is not only a dream but also your investment for life. But at the same time, it doesn't take much for it to become a nightmare.
Property generally involves a lot of money and primary care, but before that, you should first check if the property is commercial or residential. If it's a commercial property, does it have all the approvals by the Statutory Authority, and should the land or the plot be a commercial recognized zone? If not, then the commercial conversion is a must for that land. Check the original allotment letter and its originality, along with other documents.
You must also guarantee that the property has cleared all ownership titles and government permissions. Certain documents are required to check and obtain to establish your ownership. If you do not collect and review all the documents thoroughly, you will face a hard time selling the property in the future. Some of the crucial documents that are required to buy a Commercial Property in INdia are:
A Sale Deed refers to a legal document that acts as proof of the sale and transfer of property's ownership from the seller to the buyer. A Sale Deed is required to be registered. It is crucial to understand that before executing the sale deed, one should execute the sale agreement and check for compliance with other terms and conditions as per the buyer and the seller agreement. The buyer should also ensure whether the property holds a clear title. They should also confirm if the property is subject to encumbrance charges.
A seller must settle all the statutory payments, including property tax, cess, water charges, society charges, electricity charges, maintenance charges, etc., before executing the Sale Deed.
Mother Deed, also called the parent document, is an important legal document that traces the antecedent ownership of the property from the start. It is a document that helps further in the property's sale, thereby establishing the new ownership. Without the original Mother Deed, certified registering authorities can use its copy.
Mother Deed includes the property's ownership change through sale, partition, gift, or inheritance. The records must reference previous ownership in a sequence, and that sequence is required to be continuous and unbroken. In case of an absence sequence, one should check the records from the registering offices, revenue records, or the preamble (recitals) in other documents. The sequence is required to be updated until the current owner.
Building approval plan:
The respective Corporation or Municipal Authority sanctions a building plan. The building owner must get an approved plan from the jurisdictional Commissioner or an officer authorized by such Commissioner.
The documents include- Title Deed, property assessment extract, property PID number, city survey sketch, an up-to-date tax paid receipt, previous sanctioned plans, property drawings, copies of demand drafts, foundation certificate, and a land-use certificate issued by the competent authority. The building owner should hire a registered architect who will draw a planning meeting on the applicable by-laws. One must get a building approval plan within 4-5 working days if all the requirements are met.
NOC from Government Departments
It would be best if you had NOC (No Objection Certificate) from government departments to ensure that there are no statutory dues and also to make sure that the property is regularised and not under demolition or acquisition from any government department.
The authorities usually issue it to the sub-registrar office and deputy commissioner of the area to ascertain that the land in concern is under no legal trouble or glitch. When purchasing the land or property, you must obtain NOC from the builder and concerned authorities.
Encumbrance Certificate (EC):
An encumbrance can be described as a charge created on any asset, more often used in the context of real estate. An Encumbrance Certificate assures that the property is free from all legal or monetary liability, such as an uncleared loan or a mortgage.
Encumbrance means changes in the ownership or liabilities created on a property held against a home loan as security. An Encumbrance Certificate (EC) includes all the registered transactions on the property during the period. A person must submit a copy of the Sale Deed to obtain an EC. The time taken to obtain an EC may vary between 3-7 working days, depending on the period sought.
Betterment charges receipt:
Betterment charges, also known as improvement fees/development charges, are the charges collected by the civic authorities at times of appreciation of property prices due to physical infrastructural developments or the development of a commercial setup. The developers must pay a fixed amount as betterment charges to the municipal body. The same should be acquired at the time of property buying.
Power of Attorney (POA):
A Power of Attorney refers to a legal procedure used to give authority to other people by the property owner on their behalf. One can also give a Special Power of Attorney or a General Power of Attorney to transfer one's rights over one's property.
Latest tax paid receipt:
Receipts for property tax bills prove that taxes for the property are paid up-to-date to the government. Therefore, the buyer must make inquiries with the government/municipal authorities to ensure that the seller clears all the dues. The buyer has the right to ask the seller for the latest original tax-paid receipts and bills and can even check the owner's details, including the name, the taxpayer's name, and the date of payment on the receipt. If the owner doesn't have the tax receipt, the buyer can contact the property's survey number and the municipal body to confirm the land's ownership. Despite that, the buyer should also check that other bills, such as the water, electricity, etc., are up-to-date.
Stamp Duty refers to a tax, like sales and income tax, that the government collects and should be paid on time. A stamp duty paid document is scrutinized to be a legal instrument. The liability of paying stamp duty is that of the buyer unless there is an agreement to the contrary.
Agreement to Sell:
You should have a signed agreement to sell, drafted on a stamp paper, and duly registered with the sub-registrar, to ensure that the agreement is binding on both parties.
Purchasing a property involves you scouting different locations and neighborhoods and requires you to handle a lot of documentation. Given that the formalities and forms can differ from State to State, depending on the area where the property/land is situated, it's advisable to consult with a property lawyer who can provide expert guidance through the legal intricacies of the process.
Every state has its norms under the Registration Rules that must be filled and filed along with and at the time of registration of Sale Deed/Transfer Deed.