Document verification important before buying a property – In India, purchasing a house is a major factor. In addition, investing in property is believed to be among the most lucrative and secure investments that can be made in India. It is no surprise that buying properties is a significant aspect of our adult goals.
There are a variety of aspects that must be taken into consideration before making a purchase. However, these are going to be discussed at some other time. In this blog, we’ll concentrate on the legal documents needed to purchase a property.
LEGAL DOCUMENTS REQUIRED WHILE BUYING A PROPERTY IN INDIA
The excitement of purchasing a home is so overwhelming that we don’t even bother to ensure whether we are aware of other crucial aspects or not. However, ensure you maintain a clear head and have all the essential documents before opening that bottle of champagne for a celebration.
1. Title deed:
The title deed must remember that no one can sell the property without the permission of the property’s original owner. So, prior to anything else, you should check the title deed and be sure you purchase a home from the correct owner. The title search for the property could be conducted in a Sub-Registrar’s Office, and the buyer has the right to get all prior title documents for the property. The title must be clear of any dispute regarding who owns the house.
2. Encumbrance Certificate:
It’s crucial to check whether the property is free of the burden of encumbrances, i.e., legalities. The Encumbrance Certificate lets the buyer be aware of the same. Similar to the title deed, the encumbrance document can be inspected at the Sub-Registrar’s offices. An encumbrance certificate, also known as an EC, will record all transactions done during a specified period of time over the property to which the EC is required.
3. Master Plan:
Real estate agents today use a familiar tactic to market properties by making bold claims that a mall is near a hospital or some other transportation method is in the works. Before you commit to these claims, research the region’s layout carefully and verify that it will be seen in the light of day. Request the master plan for the region to aid in your study of these issues.
4. House Plans Approval:
This is vital and should be examined right after the title deed to determine if the authorities approve your property. The design of the house and arrangement should be in line with the requirements that are part of the National Building Code of India. The layout should also conform to the guidelines in GRIHA (Green rating for integrated Habitat Evaluation).
5. Agriculture to non-agricultural land Conversion Certificate:
The fact should be considered that agriculture-related land shouldn’t be used to construct a property for residential use. If done so, the property will be considered illegal and could be caught in legal issues. So, it is important to ensure that the property you’re looking to purchase for your residential use is not constructed on agricultural land. In this scenario, you can apply for Agricultural Conversion Certificate or Non-Agricultural Land Conversion Certificate.
6. Land Use Certificate:
Once again, it is essential to remember that residential property built on industrial or commercial land (apart from land used for agriculture) is illegal. Furthermore, residential property purchased for commercial purposes is illegal. The Land Use Certificate will assist you in gaining an understanding of these areas.
7. No Objection Certificate:
No Objection Certificates can be sought out whenever required. The seller must provide you with a copy of the no-objection certificate for urban ceilings and NOCs for electricity, water, etc.
8. Start Certificates:
The commencement document is essential prior to the beginning of any construction. The town planning department issues it following a thorough examination of the layout of the building, plan, superstructure, etc.
9. Property Tax Receipts:
You can ask for property tax receipts and ensure that the previous owner has completed the tax payments for the last three years before selling.
10. Sale Deed:
A Sale Deed is among the most crucial legal documents. It’s proof that the property was sold and that the title has passed from the seller to the buyer. Be sure to sign your sale deed legally.
11. Khata Certificate/ Extract:
This is the record of a buyer or person who owns the home. The Khata extract is required when purchasing a property. It is crucial not only to transfer property but also to facilitate the legalization of the property.
Beyond these 11 points, you should also be sure that other legal documents, such as the Completion Certificate (CC) and Occupancy Certificate (OC), are in the correct place.
What is the significance of document verification?
When purchasing a home, we generally focus on location, price, and the date of possession. These are crucial factors to consider when deciding on a shortlist, but there are a lot of other aspects to consider before settling the purchase. Therefore, it is crucial to be aware of the documents that must be inspected before making a purchase. Document verification will assist you in protecting yourself from swindling.
WHAT VERIFICATION IS CARRIED OUT BEFORE GRANTING A HOME LOAN
Buying a home is becoming easier today due to the ease of policy of home loans. In India, following the introduction of the PMAY program, many individuals are looking to become a homeowner. The credit-linked subsidy program allows loan borrowers to pay a lower EMI. There are many advantages of buying a home with a home loan. But before applying for one, be aware that not all people are qualified for a mortgage. Before making a loan, banks look into the property’s technical and legal issues. This article provides details on the different aspects that the bank checks before granting a home loan.
1.) The verification of the applicant
The bank assessed the borrower’s capacity to repay by obtaining specifics about his income and assets. In addition, the bank’s representative arranges a private meeting with the applicant and asks numerous questions to assess his motives and ability to repay.
2.) Legal confirmation
Banks always seek to approve loans for properties that are not subject to legal conflicts. This is why they hire an expert team to review the legal issues about the property. In this regard, the bank’s team examines the original documents for the property, including sale deeds or title deeds, as well as no objection certificates (NOCs).
The borrower must present the original documents for the property whenever the bank’s legal department comes. If it is an unfinished house or flat, the borrower must provide all the documents proving that the construction company has received the necessary permissions to begin construction. It is also essential to show that you have acquired RERA certification.
If the borrower buys a second-hand house, they must present documents that prove the prior ownership of the house.
After looking at the property’s records and other documents, the legal team will submit an inquiry at the financial institution’s request, which will include the reasons behind either passing on loan or denying the loan.
3.) Verification of technical accuracy
In this process, banks hire a team to check the property’s physical condition for which the loan is needed. The experts in the field examine the property and the construction quality. Based on these factors, the market value of the property is determined. This is an important step for banks since, in the event that the borrower fails to pay the loan by the deadline, the home will be offered for sale by the bank on the open market or at auction in which the total amount of the loan may be recouped.