No Objection Certificate (NOC) For Property Transfer

Law
25-Jan-2023
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In real estate, the property buyer needs a No Objection Certificate (NOC) from an officer or the previous owner to ensure no legal problems are tied to the property they are purchasing. In this article, we’ll understand the meaning of NOC, its types, importance, and how to get it.

What is a No Objection Certificate for Property Transfer?

A No Objection Certificate (NOC) for property transfer is a permission document issued by a bank, municipal corporation, or any other governmental organization. It is granted to an individual or a firm, allowing them to proceed with the purchase or sale of a property. This certificate signifies that these entities have reviewed and approved the proposed property transfer, and they have no objections or claims against the transaction. 

The issuance of this certificate aims to assure both the buyer and seller, ensuring that they will not face legal implications in the future concerning the property transfer.

Section 21 of the Registration Act of 1908

According to Section 21 of the Registration Act 1908, the provision for representing property and plans or maps. The provision doesn't expressly state the word 'NOC.' Still, it gives the need for a non-testamentary document having the following things at the time of the property's registration:

  1. The former and existing occupancies of the required property.
  2. The description of the property is adequate to identify the property.
  3. The property in the town must be described as follows:
  • The direction it faces
  • The number of streets/roads or houses they are located in.
  • Name of the land/house they are located in.
  • A non-testamentary document with the property plan or map having the actual copy of the plan or map must be in the registration procedure.

Importance of No Obligation Certificate in Property Transfer

A No Obligation Certificate can be in front of the court to prove the person's innocence if they are caught in any legal problem.

To exemplify, getting a No Obligation Certificate from their financial institution, that is, the bank, once the home loan is repaid, will allow them to get all the legal papers of the property without any problem.

A 'No Obligation Certificate' will also help remove a lien on the property. A lien on the property means that the lending institution has a legal claim on the person's property, and they can get the right to sell their property after paying all the debts.

Purpose of No Obligation Certificate:

A NOC is essential documentation for purchasing, selling, or transferring a property. When a person purchases a property, they must register and get the authorization of the transaction with the relevant authority to provide that they have legal title of ownership. 

No Objection Certificates are legal papers that may be needed to complete diverse duties. Yet, the essence of NOCs cannot be overstated regarding the transfer of property. NOC for the transfer of property must be acquired from the required authority, as stated under section 21 of the 1908 act. Along with that:

  1. Builders need NOC to start new projects.
  2. Sellers need NOCs to sell their property.
  3. And homebuyers may need certain NOCs to finalize their purchases. 

It is the main reason that those wanting to sell, purchase or transfer the property must understand the working of these documents.

  • NOC for property transfer: To transfer property or land, one must have a NOC for transferring immovable property from the authority as registered in section 21 of the 1908 registration Act.
  • NOC for purchasing property: To assure that the property a person purchases is free from debt, they must get a NOC from the developer or the society. While purchasing a property with a bank loan, they will need a No Objection Certificate. They should give the NOC to society for them while transferring the property.
  • NOC for selling property: NOCs are official documents required to complete several tasks. The NOCs are vital when it comes to the purchasing of property. Buyers may need particular NOCs to complete their purchases, similarly to the seller's needs.
  • NOC for Mortgage: A NOC is a legal document issued by a financial institution, or a customer and states that they have no dues to the lenders. Sometimes it is termed a no Due certificate. A lender can get NOC after paying all the debts.

Legal implications of not obtaining NOC

Following are the legal implications that a person can face in the absence of a No Obligation Certificate:

  • It can affect the credit score. The person will likely be eligible to get other loans.
  • A person can't send their property in the absence of NOC.
  • Lenders can sue them if no proof is presented.
  • Due to a lack of proof, they may be asked for the part the person paid. In this process, a lot of time and effort can get wasted. So, it is better to have a NOC of the property.

    Documents Required For NOC

    1. NOC of co-partner if more than one partner is there.
    2. Municipality/Town Committee receipt/GMC/occupancy certificate/GMDA/ in case of flat.
    3. Certified copy of passport/ Voter ID, and so on to state the Citizenship of the purchaser.
    4. Land patta.
    5. Buyer and seller's photograph.
    6. Copy of power of attorney (if the seller is the holder).
    7. Pattadar is to submit an affidavit in favor of the POA Holder.
    8. Order of consideration.
    9. Revenue receipt (up-to-date)
    10. Affidavit of seller/buyer.
    11. Photo ID of seller and buyer.
    12. TAN or PAN card.

    Application Procedure For NOC for Property Transfer

    Selling of land or transfer of property involves a change in ownership. When purchasing a property, one should get permission and register the property transaction with the required authority to obtain the ownership title. It is essential to have a NOC for transferring property.

    One can get the NOC of their property from the required authority under section 21 of the 1908 act. The process involves getting the certificate from the Circle Officer and sending the application to the Deputy Commissioner’s Office. After that, the deputy commissioner will issue the No Obligation Certificate. The person can go for registration and land mutation process on obtaining the certificate.

    The procedure for obtaining a No Objection Certificate (NOC) can vary depending on the organization or government body that is issuing the NOC. Generally, the following steps are involved:

    Determine the purpose and type of NOC required: Different types of NOCs may have different requirements and procedures for obtaining them. Create a draft NOC according to the required format for what the person needs NOC.

    Getting Non-Judicial E-stamp Papers:  One must obtain non-judicial e-stamp papers from the closest bank, sub-registrar office, or court with the payment of Rs 100.

    To obtain the stamp, one must give the following:

    • The name of the applicant.
    • An affidavit is the description of the document and the first party's name.
    • The name of the second party.
    • The contact number of the applicants.
    • Name of the applicant (purchased by)
    • The cost of stamp duty is Rs 100, and the charges of fee for e-stamp paper, along with vendor processing charges, is Rs 10, which costs Rs. 110 in total.

    Collect the required documents: Depending on the type of NOC, you may need to submit various documents such as ID proof, address proof, and other relevant documents.

    Fill Out The Application Form: Obtain the application form for the NOC and fill it out with accurate and complete information.

    Submit The Application With Documents: Submit the completed application form and required documents to the relevant department or agency.

    Pay the fee: After NOC verification by the notary public, sign the No Obligation certificate that will be signed and sealed, and entry will be created in the notary book. A fee of Rs. Fifty should be paid to the notary.

    Wait For The Processing: The processing time for a NOC application can vary depending on the organization or agency issuing the NOC.

    Receive The NOC: After the processing is complete, you will receive the NOC.

    Inclusive of No Obligation Certificate

    There are certain things to be concerned about and stated in the NOC, per the widely used NOC format. People must remember that a NOC must be written on the issuing institution’s official paper. Following are the things to be included in the NOC

    • Name of the person in whose favor the NOC is made.
    • Name the one issuing NOC.
    • Contact and address the issuer.
    • Signature.
    • Date of issue.

    NO Obligation Certificate: Sample format

    A No Obligation Certificate letter must have the basic information of the involved parties and state one of its concerns. Listed below is a format of NOC that can help you understand it:

    TO WHOM IT MAY CONCERN:

    This is to certify that [NAME HERE], resident of [ADDRESS HERE], is the owner of [PROPERTY NAME HERE], situated at [ADDRESS HERE], with Property Identification Number [NUMBER HERE] and containing an area of 25,746 square meters.

    Certified further is that [NAME OF ORGANISATION] interposes no objection to the NAME OF ORGANISATION HERE of the said property.

    ISSUED this 25th January 2023, as requested by [NAME HERE] in support of his/her application for [APPROVAL NAME PROCESS HERE].

    Signature: ____________________________

    Date: _________________________________

    NOC from the property owner for leasing out their premises:

    TO WHOMSOEVER IT MAY CONCERN

    I/We, _________, son/daughter of ________ do hereby state that,

    · I/We/am/are the legal owner/s of the premises situated at _____________ (hereinafter referred to as “the said premises”).

    · I/We have no objection in _______________ {Enter name} using the said premises as the registered office of the partnership firm/proprietorship/LLP/private limited company/ public company.

    Date: _________ Signature _____________

    Place: ________ (Owner).

    NOC Under The Authority of RERA (Real Estate Regulatory Authority)

    A creator or developer should get prior written approval from two of the three allottees before sharing or giving rights and liabilities relating to a property project, to a 3rd party, as per the RERA's section 15. The Real Estate Regulatory Authority officers will give an equivalent certificate if the one who has given the NOC.

    NOC For Property Use

    When a tenant, usually a firm, signs an agreement and intends to use that property as a registered office, the landlord must give NOC for their property. Before building the office, the firm first needs to secure its NOC.

    The landlord must provide a NOC stating that they are renting out their property happily to the respective firm and that they have no complaints about the firm using the entire property or a part of it.

    The following are the things that must be included in the NOC for the property use:

    • Name of the owner of that property.
    • The signature of the landlord, along with their contact details.
    • Location and the date.
    • The name of that organization.
    • The address of that property.

    Common Authorities from Which You May Need to Obtain NOC for Property Transfer

    The requirement for a No Objection Certificate (NOC) for property transfer can vary based on the local regulations, policies, and the specific circumstances of the property transfer. Here are some common authorities or entities from which you may need to obtain an NOC for property transfer:

    NOC From The Collector

    In some states, obtaining the collector’s NOC before transferring the property is needed. It is helpful in cases where companies and development bodies have leased their land to others. As per these documents, the owner must inform the collector about the property transfer to get NOC.

    NOC From Financial Institutions:

    The No-Obligation Certificate for a house loan refers to a legal paper that states that the borrower has paid all the EMIs of the house loan. It’s just as necessary to follow the required policies while applying for a home loan as it is to meet the necessary home loan formalities. It means if a person has a home loan under their name, they should get the No Obligation Certificate when the loan account is closed.

    Housing Society or Condominium Association

    If the property is part of a housing society or condominium, you may need an NOC from the respective association. This ensures that the transfer adheres to the rules and regulations of the society or association.

    Environmental Authorities

    For properties near environmentally sensitive areas, you might need an NOC from environmental authorities to ensure compliance with environmental regulations.

    Things To Keep In Mind While Making NOC

    A few elements must be considered while drafting a NOC following the widely used format of NOC. A person must remember that a No obligation Certificate should be drafted on the issuing institution’s official paper. While understanding the elements of a NOC is necessary, knowing how to draft them is equally important. Listed below are some things that one must think about before drafting a NOC certificate:

    • Keep the letter up to a point.
    • Use simple and easily understandable words and avoid using technical jargon.
    • Put all the desired information, and cross-check that all the information is there.
    • The tone while drafting NOC must be clear.
    • It must be written on legal paper at all times.

    No Obligation Certificate: Common Challenges:

    Following are some challenges that an applicant can feel while applying for the NOC certificate:

    • Lack of transparency: The process of getting a NOC can be unclear, with few details given to the person about the application status. It can make it complex for the person to know what actions are required to forward the application.
    • Bureaucratic delays: Getting a NOC can be time-consuming and has diverse levels of bureaucracy. Delays in getting approval or processing approvals can extend the NOC process.
    • Corruption: Corruption is also a challenge that a person may face while getting NOC. During the application process, officers may ask for bribes or other forms of incentive to get a NOC certificate.
    • Lack of awareness: People need to know the specific needs or ways for getting a NOC, which can further delay the process.
    • Lack of proper paperwork: Many applications for NOC need a notable number of legal papers, such as Identity proof, ownership proof, and other required papers. These documents are necessary for the process to get started.
    • Clashing laws and regulations: The regulations and rules covering the No Obligation Certificate can be complex and may differ depending on the kind of NOC and the court in which it is being aimed. 

    Conclusion

    A No Objection Certificate is among the essential documents a person must have while selling a property. A NOC is given to ensure that a system does not violate an agency's, organization's, or institute's T&C. If you want any personal guidance from our expertise, including consulting with a property lawyer, contact us at +919284293610 or info@restthecase.com. We hope you got an understanding of the relevant aspects of NOC.

    FAQ's Releted to NOC for Property Transfer

    Why is a No Objection Certificate required in real estate transactions?

    While purchasing a building or property requires NOC from diverse commodities, such as Banks, development authorities, and builders, from where the person can take loans. It is necessary to ensure that the property is free from any legal problems and has no financial liability.

    Can a person sell their property without a No Objection Certificate?

    No, a person can’t sell their property without a No objection certificate. If a person tries to sell it, it will be considered illegal.

    Is it crucial to get a No objection Certificate from the Society for a gift deed of a property?

    A person can skip seeking a NOC from the Society to donate property, provided they have all the essential paperwork to verify ownership.

    Is a No Objection Certificate valid for life?

    No, a No Objection Certificate is valid for six months after its issue.

    How can a person write a No Objection Certificate for land?

    One can show that one wants to rent or sell your land and then go on to represent the property in detail.

    Is No Objection Certificate required for the registration of a Company?

    The landlord must provide a NOC letter when a corporation leases a property to utilize it as a registered office. When registering for company registration, the NOC must be given to the Registrar of Companies.