TIPS FOR BUYING PROPERTY
Buying a property is perhaps the single biggest investment made by a person during his lifetime. Thus one needs to exert due caution in buying a house lest one’s precious savings goes down the drain. After zeroing in on the desired property, one still would have to wade through a formidable maze of tedious legalities and endless paperwork. So in order to cruise home in style, one ought to acquaint oneself with various legal jargons and other technicalities.
The Title Deed: The Title Card is an investigation into the title of the land over a period of 30 years and states whether the property is unencumbered and has a clear and marketable title. The detailed report should be prepared for the seller by his lawyer and should be checked by the purchaser’s lawyer. If the title were not clear and marketable, most of the major financial institutions would refuse to finance this property. Hence one could approach a financial institution to check if they would provide a loan for that particular property.
Property Under Construction: For a project under construction, one should ask for the Allotment Letter and Development Agreement. The Allotment Letter contains details regarding the agreed price, payment and construction schedule, house plans, delivery date and builder’s liability in case of late completion or problems after possession. It is issued to the buyer upon payment of the 15% of the property value to the developer. The Development Agreement is inked between the builder and the landowner and contains details regarding the terms and conditions on which the landowner has permitted development of his property.
Constructed Property: In case of constructed properties, one should ensure that the seller has the title and possession of the property as well as the right to transfer the property. Check if the building adheres to relevant municipal/planning authority requirements. Ensure that there are no tenants and get a declaration that the property was purchased from the seller’s funds and is not mortgaged. Check whether dues such as property tax, society, water and electricity bills, etc. have been paid in full. Make sure to take possession of all relevant documents and also the original allotment letter, completion certificate, occupation certificate and all other documents given by the original builder.
Stamp Duty and Sale Deed: The stamp duty is usually a percentage of the transaction value levied by the state government on every registered sale. The agreement to sell clearly states the stamp duty, which is usually paid by the buyer, and he gets his name registered in the land revenue records. The final Sale Deed should be stamped and registered at the appropriate local area office. Both, the developer/seller and the purchaser need to be present at the sub-registrars office for registering the agreement.