Avoid property fraud – Check these documents carefully before buying a new property
Buying a residential property in India is everyone’s dream, and we often invest all our life savings (and even come under a lot of debt) while purchasing our dream house. But one hasty decision and everything could go wrong. That’s why; while buying property in India, it is important to carefully check all the legal documents to avoid becoming a victim of fraud.
Property documents are the most important part of any property investment. To avoid any property-related fraud or negligence, it is essential to check all the legal documents before making a purchase decision.
Here is a list of essential legal documents that you must check thoroughly before buying a new property:
1. Sale Deed
A Sale Deed is the main legal document which acts as the proof of sale as well as the transfer of ownership of the property from the seller to the buyer. To prevent property fraud, ensure that the sales dead has been registered and that the property has a clear title. Also, ensure that the owner/seller has settled all the statutory payments like property tax, water charges, cess, society charges, maintenance charges, electricity charges, and more.
2. Mother Deed
Known as the parent document, Mother Deed is an important legal document that helps you trace the ancestral ownership of the property. It confirms the establishment of the new ownership and ensures that there is no family dispute with regards to the property.
In case the original Mother Deed is not available, you must obtain the certified copy from the registering authorities.
3. Building Approval Plan
This is an approval plan, obtained from the jurisdictional Commissioner, without which the construction of the building stands illegal. The following documents are required to obtain a building approval plan:
- Title Deed
- Property assessment extract
- Latest tax receipts
- Foundation certificate
- Property PID number
- Land use certificate
- City survey sketch
- Property drawings
- 2 copies of demand drafts
4. Commencement Certificate
This is a legal document that ensures that the project meets the criteria stated by the local authorities. Absence of Commencement Certificate will make the construction illegal. You may even be levied with heavy penalties and may even attract an eviction notice.
5. Conversion Certificate (From Agricultural to Non-Agricultural Land)
In case you are planning to construct a house on an agricultural land, it is mandatory to obtain a Conversion Certificate from the authorized legal body. This ensures that that the agricultural land has been legally converted to non-agricultural land and is fit to be used for the construction of property. Documents required to obtain a Conversion Certificate include 3 copies of the R.T.C extracts, land sketch, village map, title deed, zonal certificate, land tribunal certificate, and the no dues certificate.
6. Encumbrance Certificate (EC)
Encumbrance means change in ownership on a property which is held against a home loan. Simply put, this certificate evidences the presence of any legal transaction or mortgage against the property.
7. Betterment Charges Receipt:
Also known as improvement fees or development charges, betterment charges are paid to the municipal body before a Khata is issued. To avoid any legal hassle later on, you must obtain a receipt of the betterment charges while buying the property.
8. Power of Attorney (POA):
A POA is a legal document that gives an individual the authority to rent or mortgage to someone else on his/her behalf. In case the owner has Power of Attorney, you must check if it has been legally registered to avoid any kind of property fraud.
9. Tax Receipts
Tax receipts ensure that property taxes have been paid until the date of sale. You must ask the seller for all the latest tax receipts and bills to make sure there are no pending charges that you might have to pay after purchasing the property.
10. Completion Certificate
Issued by the municipal authorities, Completion Certificate ensures that the property has been constructed in compliance with all government rules and regulations, in terms of height, distance from the road, and pre-approved construction plan, and more.
While it is important to check all the above mentioned legal documents while property investment in India, getting in touch with a reputed real estate developer or authorized property agent can help you save a lot of hassle and legal trouble later on. With complete information about all the legal rules and formalities, they can help you strike the best deal and avoid any legal fraud later on.