12 Documents You Will Require Before Buying A Property
So you are heading to buy a property? But do you have all documents in place? Why is it required to have them in place you may think? Well, having all the documents that are required to buy a property not only can save you a lot of time and energy, it can also save you a lot of headaches and course money! So let us look at what are the documents that you should keep in handy to save you from the extra effort, chaos, and fraudulent. Let us have a look!
- TITLE DEED OR SALE DEED—
The sale/title deed is the core document that is required while transferring the land ownership to someone else. This document acts as proof of the sale and transfer of the legal rights of the land or property to the buyer. A sale deed has to be registered and before the sale deed is issued and settled the seller needs to issue a sales agreement with clearly established terms and conditions of both the parties (the buyer and the seller).
However, before executing the sales deed, the buyer must check and verify whether the property has a clear history of about past 30 (thirty) years and does not involve any confusion or disputes regarding the ownership.
* A seller should settle all the statutory payments such as property tax, cess, water charges, society charges, electricity charges, maintenance charges, etc., (subject to the agreement) before executing the Sale Deed.
- MOTHER DEED—
Mother deed is the document that traces the parental or ancestral ownership of the property which can come very handy to help bring to the surface if there is or was any dispute regarding the property and whether or not they settled or are still on-going.It is a document that helps in the further transfer of the property right smoothly without much friction and complexities. The mother deed document includes the change in the ownership through the sale of the property, partition gift, or inheritance. The mother deed records of the references to the previous ownerships which must be pretty continuous and unbroken.
*in case of a broken or noncontinuous record, the buyer should refer to the registering authorities for revenue record, tax filed or recitals (preamble), the records of the mother deed should be continuous and unbroken and updated till the current owner.
*in case of the absence of the mother deed, other certified copies should be obtained from the registering authorities.
- BUILDING APPROVAL PLAN-
A building plan for an area is issued or rather sanctioned by the local development authorities. Hence it will vary from locality to locality. Their permissions and sanctions are required before the construction starts at any property that comes under their area of governance without which any kind of construction or construction-related work at your property site is going to be deemed as illegal. These local development authorities sanction orders after going through an examination of the zonal classification of your property, road width, floor area ratio, plot depth, and the plan of the area according to the master development plan. A set of documents is required to be submitted by the owner to obtain a building approval plan. The documents include- Title Deed, property assessment extract, property PID number, city survey sketch (from the Department of Survey and Settlement and Land Records), up-to-date tax paid receipt, earlier sanctioned plans (if any), property drawings, 2 copies of demand drafts, foundation certificate (if any) and a land-use certificate issued by the competent authority (viz., Dy. Commissioner).It is suggested that the building owner hires a registered architect who will draw a plan meeting the applicable by the laws. One can get a building approval plan within 4-5 working days if all the requirements are met.
- COMMENCEMENT CERTIFICATE FOR AN UNDER-CONSTRUCTION PROPERTY-
A commencement certificate is a certificate issued again by the local authorities (BDA & alike). This piece of document declares that the project meets the required criteria and helps resume and run the construction on-site for the builder smoothly without disruptions and legal disputes. Failing to attain a commencement certificate for your “under-construction property” may lead to the entire construction being considered illegal, levy penalties and can even attract other legal disputes like an eviction notice.
- CONVERSION CERTIFICATE-
Since a vast majority of the land is agricultural in India, obtaining a conversion certificate from your local legal body, when buying agricultural land for construction is crucial. You can check with the authorities about the current status of the land to decide whether or not to file a conversion certificate. A conversion certificate is used to change the status of the land from land used for agricultural purposes to land used for non-agricultural purposes; this certificate is usually sanctioned by the local competent revenue authorities. Further, the competent revenue authority requests the Department of Town and Country Planning to issue a NOC for the conversion of land for residential purposes. There is a certain set of documents to be submitted by the owner to acquire a Conversion Certificate. The documents required to obtain a Conversion Certificate are:
–3 copies of the R.T.C extracts, Village map, land sketch, a certified copy of the land tribunal, zonal certificate, Title deed, no dues certificate by village accountant, and Mutation Records (MR) copy.
- KHATA CERTIFICATE OR A KHATA EXTRACT-
“Khata” basically refers to the word “account” is the Hindi language. It is an account of a person owning a property. It typically consists of (a) Khata Certificate and (b) Khata Extract. A kata certificate is mandatorily needed when buying a new property and also as a part of the ownership transfer of the property at hand. A Khata Extract is a document along with all your property details that the concerned assessment registrar gives you so that in the legal papers the land becomes a part of your possessions and now you can happily claim the land to be yours without hesitation or confusion. It is needed while property buying and acquiring a trade license. The Khata is widely referred to as A Khata and B Khata (Revenue records extract). ‘A’ Khata has properties listed under BBMP jurisdiction with legal property construction and ‘B’ Khata has properties under local jurisdiction with violated property constructions. One should avoid a Khata b property as it will be deemed as an illegal construction at all costs. Nevertheless, a Khata B property can be changed into a Khata A property by legal procedures and a fine or a penalty to the government.
- ENCUMBRANCE CERTIFICATE:
Encumbrance means changes in the ownership or liabilities created on a property that is held against a home loan as security. An EC consists of all the registered transactions done on the property during the period for which the EC is sought. Simply put, it is a certificate sought for a particular period evidencing the property purchase/sale, the presence of any transaction, or mortgage. One should submit a copy of the Sale Deed to obtain an EC. A person applying for an EC should fill in Form 22, affix a non-judicial stamp, and submit it to the jurisdictional registrar’s office. Complete residential address, property survey number, property location, the sought period, property description, measurements, and boundaries should be mentioned in the Form. A nominal fee amount will be charged every year. The time taken to obtain an EC will be between 3-7 working days or more depending on the period sought and whether all the requirements are met on time.
- LATEST PAID TAX RECEIPTS-
Tax receipts keep the seller in check when they try to sell a property. Receipts of the property tax ensure and act as proof that the property taxes are paid to the municipal or the government and it should be up to date. For most local authorities, the property taxes must be paid up until the sale date so that the new owner of the property can now apply for other required documents like a Khata and get them issued in his name. It is therefore crucial for the buyer to find out by checking with the local municipal authorities or other government bodies whether or not all the tax dues are paid and cleared by the seller before the deal is executed. The buyer should ask the seller for the latest original tax paid receipts and bills and check the details of the owner’s name, the tax payer’s name, and the date of payment on the receipt. If the owner does not have the tax receipt, the buyer can contact the municipal body along with the survey number of the property to confirm the ownership of the land. It is also important for the buyer to ensure that other bills such as the water bill, electricity bill, etc. are paid up-to-date and try to stay away from the deal if anything looks shady and not trustable.
- COMPLETION CERTIFICATE (FOR COMPLETELY CONSTRUCTED PROPERTIES ONLY)-
A completion certificate is issued by the local municipal authorities, denoting that the constructed building complies with the rules and regulations of the land. These rules and regulations are checked according to the height of the building, distance from the road, and whether the building is constructed according to the approved plan etcetera. This document will not only come in handy while purchasing a property but also when getting a home loan against the property.
- OCCUPANCY CERTIFICATE (FOR COMPLETELY CONSTRUCTED PROPERTIES ONLY)-
Occupancy certificate requires you to make sure that the property is ready to move in, in a literal sense. When a builder or the owner of the property applies for this certificate usually an inspection would take place by the concerned local development authorities, followed by which they will issue the Occupancy certificate. This certificate is obtained after the completion of the entire building process and when the property has other requirements met such as water connection and electricity connection. It is important at the time of buying a property, seeking a home loan, before the builder allows people to take possession of the property and, for the transfer of Khata. It certifies that the project is ready for occupancy without which if you occupy the space, your occupation of that space might as well, be considered illegal and you may even get a Notice of Eviction.
- BETTERMENT CHARGES RECEIPT-
Betterment charges are also known as improvement fees that are to be paid by the owner of the property to the local development authorities before a Khata can be issued. Usually, the developers are required to pay a fixed amount as improvement fees to the local authorities; this may vary from place to place. Hence, a receipt of the same should be obtained by the time of property purchase. If the house owner is unable to tell you clearly about whether these have been paid or are due, just get it checked with your local housing board or development authorities.
- POWER OF ATTORNEY (POA)-
Power of attorney is basically when you let take someone else take decisions regarding a specific subject, on your behalf. There is a Special Power of Attorney and also a General Power of Attorney. This can come in handy when you are in the middle of the process of shifting property to your name and you have to attend a meeting or a conference out of town so you can use this facility to get your work done by the time you are back in town.
- NO OBJECTION CERTIFICATE (NOC)-
No objection certificates should be asked and taken whenever you feel necessary. Ideally, the seller of the property should provide you with all the NOCs of the property regarding water, electricity, and maintenance etcetera. Apply for NOCs if they are not coming with your property papers.
These were a few documents that you should keep handy while coming in the market to purchase a property