Documents required for a secure real estate transaction

It pays to be cautious; especially when dealing with murky state of affairs pertaining to real estate transactions. No amount of scrutiny would suffice while purchasing a property. Due to the existing state of affairs, especially in the absence of a regulator or a real estate bill there is always a confusion when it comes to documents regarding the property.

The following are the documents that should be checked and thoroughly inspected before and even after buying/selling a property:

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Written agreement

A written agreement should be imperatively provided by the developer. The agreement should acutely mention the all the terms and conditions, specifications of the apartment, time of delivery and the payment plan.?The agreement should additionally mention the exact quantum of penalty to be imposed in the event wherein the developer fails to meet the construction deadline as well as in the event wherein the buyer defaults on the payment schedule.

In the case of buying a house within a completed project, the occupation certificate, electricity and water connections, fire safety equipment and mechanism and property tax receipts for the project should be physically checked by the buyer. In particular, the occupation certificate issued by a government authority is very substantial.

Employing the services of a bank:

Buying a flat through a bank loan is the best course of action. Since the bank accepts the apartment which is yet to be constructed in a new project, as collateral, they do all the checks, including the builder?s credentials, to ensure that the collateral?s market value does not diminish.

Buyer-seller agreement:

This agreement includes each and every clause, conditions, terms and legal implications for the buyer and developer should there be a default on either side. Prominent points are interest, default charges for a buyer, penalty and clauses of refund of payment in case the project is not completed or is scrapped.

Also, the penalty in case of any structural defects or delay in construction as well as a clause to transfer the common undivided land to the society and owners to ensure that further construction or development cannot be undertaken by the developer once the completed project is handed over, should be included within a registered agreement.

Documents:

For Delhi:

Perpetual lease deed, Conveyance deed, Sale deed in case of resale properties, Mutation paid, Last paid house tax receipt, Last paid electricity and water bills, Completion certificate and Sanctioned plans.

For Noida/Greater Noida:

Allotment letter from Noida Authority (in case of a plot or flat built by authority), Registered perpetual lease deed, Proof of payment of lease rental, one-time or yearly; Transfer memorandum and registered transfer deed in case of resale property, NOC from Jal Department, Share certificate and NOC from society (where applicable as some old sectors or group housings have been allotted to societies), Completion certificate for houses with sanctioned building plans and Mutation letter in name of current owner.

For Gurgaon:

Allotment letter (in case of either HUDA or DLF properties ? builder-buyer agreement), Registered sale deed in name of current owner with all originals from previous owners, Sanctioned building plans and completion certificate in case of independent houses, Mutation letter from DLF or HUDA, Proof of up-to-date payments of power and water and house tax charges, NOC from RWA or maintenance office in case of group housing.

Titles and documentation:

In case the property is purchased from the urban development authorities, the risk of clear titles and documentation decreases by a significant margin.

Howbeit, one should seek legal assistance to check documents related to land ownership, allotment letter, licences and approvals, sanctioned plans etc, if the flat is being purchased either from a colonizer or private developer.

Certificates:

Certificate from society:

The share certificate issued by a society should be checked by the buyer, as it establishes the seller?s identity. The share needs to be transferred in the name of the purchaser. This certificate forms a part of the ownership deed.

NOC from society:

In case of a resale, the no objection certificate (NOC) which is issued by the society should be verified. This NOC states that dues payable by the seller to the society are nil and that the conditions laid down by the society have been complied by the seller.

Ownership titles for group housing cooperatives:

Essentially, the ownership documents allotted or the shares transferred should be verified to ascertain the legal rights.

Title papers:

In case the property is being purchased directly from a builder, the title papers should be checked as it proves the owner?s identification. The document can also be used to determine whether property has a clear title or if its under litigation, whether the seller possesses the authority to develop or sell the property, whether the land is on leasehold or freehold as well as indicate whether the property is free of encumbrances. If there is a conveyance deed favoring the seller, then it ensures that the property has a clear title.

Checking by bank:

If the property is being purchased through a bank loan, the bank would normally appoint its own lawyer to verify the title deeds. Or, a lawyer can be hired and a request for originals can be placed with the bank. In any case photocopies of the documents should not be accepted.

Municipal clearances:

The completion certificate which is issued by the municipal authorities is another important document. It proves whether a building is in compliance with the rules and regulations in respect of distance from road, height, besides other things. The occupation certificate should also be verified as it certifies that the electrical connections, sewage and water are in place.

Development agreement:

In case the property has been constructed jointly by the builder and the owner, the joint development agreement which mentions the terms of development of the property.should be scrutinized.

Purchase agreement:

The purchase agreement between the developer and the authority or the agency from which the developer has bought the land too needs to be scrutinized. It ensures the seller (builder) has the authority to sell the property, and it also states if the property has any mortgages against it.

List of approvals:

Noncompliance in getting legal approvals from a number of authorities may result in scrapping of the project or reduction in the market value. The approvals to be obtained are structural safety certificate, building plans and floor plan approvals, no-objection certificate from the civic authority, urban land ceiling certificate, environment clearances, commencement certificate and title deed. The buyer upon possession, should physically check the occupation certificate, water and electricity connections, fire safety equipment and mechanisms and property tax receipts.

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Source: http://www.commonfloor.com/guide/documents-required-for-a-secure-real-estate-transaction-27511.html

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