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Buying a resale property comes with its own set of benefits and challenges. While you get access to a strategic location, property transaction disputes arising from ownership rights isn’t unheard of.
Have you zeroed down on the resale property you wish to buy, but are a little unsure about how to authenticate its ownership? Fret not! We are here to help you overcome this challenge so that you can validate if the house of your dreams has a clean title of ownership.
Sale Deed
The first step towards substantiating the ownership of a resale property is to ask the previous owner to furnish legal documents related to the property.
The Sale Deed is the most important document to determine who owns or owned rights to the property. The deed is drawn on a non-judicial stamp paper of fixed value, as specified by the state government. It needs to have details such as:
- Price of the property
- Terms & conditions agreed upon by the parties
- Payment history
- Personal details of the parties
- Location/construction details of the property
There have been cases where miscreants used fake non-judicial stamp paper to commit fraud. Therefore, it is advisable to hire a legal consultant who could check the sale deed on your behalf to test the legality status of the document.
No Objection Certificates
Run a series of a check by asking for documents that prove that there’s no pending violations or disputes. Checking this would ensure that you are not penalized for changing the layout in the future. Nor you are not stuck with unpaid dues of the previous owner. This would include:
- Looking at the sanctioned building plan to check if the approved plan of the space by relevant authorities of your state and the one being sold to you has any discrepancy
- NOC from the residential society that approves the transfer of title along with original possession letter and share certificate
- A record that reflects previous bill payments such as property taxes, electricity bill, water bill, maintenance charges, telephone bill, gas bill and other utilities up to the date of handing possession
- General Power of Attorney document, if you are buying a property from an authorized representative of a property owner who lives outside India
Debt Status
Did the previous owner take any personal or private loan for the property? Has it been cleared? It is wise to demand a NOC issued by the bank from the previous owner so that you get a mortgage-free property. Ask for clearance proof, in case the owner borrowed money from a private lender, family or friends.
Encumbrance Certificate
If you plan to buy the property via home loan or are looking to apply for a loan against property, then you would need an Encumbrance Certificate. EC assists in determining the legal ownership of the property and check if it is free of any debt.
Here are the features of this certificate:
- It tracks down all financial transactions registered against the property for a particular period
- While government authorities and lending institutes ask for 10-15 years of encumbrance, as a buyer you can ask for up to 30 years encumbrance certificate to be verified by the authorities
- A person needs to submit the encumbrance application at the jurisdictional sub-registrar’s office
- It takes about 15-30 days for the authorities to conduct the necessary check and issue the certificate.
Verify Property Registration Online
Original registration and stamp duty receipts are two of the other important documents that a buyer needs to demand from the seller while negotiating a resale property deal.
In this digital age, it is also possible to check land records online. Many states in India provide computerized Record of Rights (RoR) that a person can check after registering on the website. For instance, you can find land records for Uttar Pradesh here. Similarly, there are online registries of states that give land record details or have listed out the procedure:
One quick search online would take you to the land records sites of other Indian states.
The legal requirements to own a piece of land or property, changes with State to State in India. Within each state, the rules are different in urban and rural pockets. In addition, the method of record keeping also differs, more so in the case of old properties or the properties built on agricultural land.
Therefore, it is sensible to hire an expert or advisor during the purchase process. A property expert would be able to guide you about verifying the ownership of a resale property. In most cases, reputed lenders or financial institutes do offer assistance in getting these legal formalities straightened out before finalizing the loan terms.
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