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Owning a house, is an investment and a dream come true. It is a remarkable milestone for many families. Given the significance of investing in a home there are certain facts that needs to be checked before committing your investment to own a legal property. We as responsible builders would like to present a few guidelines that will be of help to become a buyer.
First things first
- The legal status of the land should be confirmed above anything.
- Advance should me made only after confirmation of legal documents.
Before buying a land
- Check for clear marketable title.
- Find out the tenure or possession right. (Freehold/Leasehold/Grant or Sanad)
Note: Freehold is always preferred.
- Legal right of the holder of the land in Govt Records. The seller should provide these documents to the buyer.
- Confirm that land is in the name of the seller The right to sell the land lies with only the seller and not anyone else.
- Always request for the original deed. Don’t entertain photocopies.
- Possible option : Original can be pledged.
- Have a lawyer approve the original.
- Check for any suppressed or undisclosed facts in the document.
- Previous deeds of land can also be verified.
Tax receipt and bills
- Property taxes due to government and municipality are made with proof of bills and receipts.
- Up-to-date tax bills need to be checked.
- Heck for columns containing.
- Owners Name 2). Tax Payers Name Sometimes the owner may not have the tax receipt, In case we need to contact the village office with the survey number of the land and confirm the original owner of the land.
- If buying a house with a property, then house tax receipt should be checked.
- Check for the water tax bill and electricity bill. If any balance request the seller to get it paid.
Encumbrance certificate (EC)
- Confirm that the land doesn’t have any legal dues.
- The encumbrance certificate can be obtained from the sub registrar office where the deed is registered.
- The EC should state that the said land doesn’t have any legal dues and complaints.
- The EC must be obtained for 13 years and for more clarification we can demand 30 years certificate also.
- In case of any doubts we can take possession certificate of the ownership of the particular land from the village office.
- When buying a pledged land ensure that the seller has paid back all the amounts due.
- Do request for the release certificate from the bank, to ensure that the debts are cleared.
- Land can be bought without the release certificate,but to take a loan in future may not be possible without it.
- If the land is owned by more than one owner, get RC from the other owners involved.
Measuring the Land
- It is advisable to measure the land before registering the land in your name.
- Ensure that the measurements of the plot and its borders are accurate using a recognized surveyor.
- Hold a survey sketch of the land from the survery department and compare for accuracy.
Buying from NRI land owners
- An NRI can sell his land in India by giving Power of Attorney to a third person authorizing the right to sell the land on his behalf.
- In cases like this the Power of Attorney should be witnessed and duly signed by an officer in the Indian embassy in his province.
- No legal support can be claimed for Power of Attorney signed by a notary public.
- This is to ensure there is no change in dealings.
- The agreement should be written in Rs.20 stamp paper.
- The agreement should state the actual cost, the advance amount, the time span within which the actual sale should take place and how to proceed in case of any default from either parties, to cover the loss.
- The agreement can be prepared by a lawyer and should be signed by both the parties and two witnesses. After signing the agreement if one of the parties makes a default, the other party can take legal action against him.
- The land can be registered in a sub registrar office, after preparing the title deed and other needed information.
- The title deed can be hand written by a government licensed document writer.
- Even lawyers can prepare the deed, but the document can only be computer printed or typed, not hand written.
- A draft should be prepared before actually committing the document to stamp paper.
- Make sure all the details mentioned are accurate. If there is incorrectness in the document after registering, a secondary document with the correct details has to be registered and depending on the incorrectness, the registration expenses will be repeated.
- The deed should be registered within the time limit mentioned in the agreement.
- Original title deed, previous deeds, Property/House Tax receipts, Torence Plan (optional) etc plus two witnesses are needed for registering the property.
- For land costing more than Rupees five lakhs, the seller should submit either his Pan Card or Form Number 16 during registration.
- The expenses involved during registration include stamp duty, registration fees, document writers/ lawyer’s fees etc.
- The stamp duty will depend on the cost of the property and varies from Municipality to Corporation to Panchayat.
- Stamp Duty – 7% of the cost of the land .
- Four percentages will be charged as the registration fees. Document writer’s fees also depend on the cost of the property and vary with individuals. There is a percentage prescribed by the government as document writer’s fee and they cannot charge more than the prescribed limit.
- After registration, the registered document will be received after 2-3 Days, from the registrar office