With Diwali just a couple days away, marking the onset of the festive season, many people consider spending their savings on aspirational items that they’ve long desired to own. Most aspire to have their own home. With homes in baugs becoming increasing difficult to get, people look at existing, re-developed or newly constructed buildings and gated communities to stay in.

Once you find a home which appeals aesthetically, location-wise and is within one’s budget, the prospective buyer proceeds to sign the Agreement with the seller / developer / builder and gets the same registered. Often, this is done without considering the associated legal risks. Some rely that the Bank providing the loan would have done its due diligence of the legalities. But is that safe enough? Read on to avoid acting in haste and repenting at leisure… after all, your dream home is probably your single largest purchase!

Procuring relevant documents from the Seller (a developer in case of a newly constructed building or any others) is a material step that should not be omitted. The following is a list of critical documents that one should request to conduct legal due diligence of the property:

1. Registered copy of the MOU / Agreement for Sale / Deed of Conveyance executed between the current Land owner / Builder and the previous owner for the land.
2. Receipt of proper stamp duty paid on the above document (sr. no 1)
3. Agreement between the Land-owner and Developer (if the two parties are different)
4. 7/12 extract or property registration card of the land on which the building is developed
5. Index No II extract
6. Search and title report with details of the documents for the past 30 years.
7. Building Plans sanctioned by the competent authority
8. Commencement Certificate granted by the relevant Municipal Corporation
9. Completion Certificate granted by the relevant Municipal Corporation
10. Occupancy Certificate granted by the relevant Municipal Corporation
11. Receipt(s) of property tax paid till current date
12. Electricity bill(s) for the said flat (as per the meter for the flat) stamped as paid till current date
13. Water tax bill(s) stamped as paid / receipt(s) till current date

 

If the society is formed or in existence, then the following additional documents should also be secured:

1. Certificate of the registration of the co-operative housing society
2. Share certificate issued by the co-operative housing society
3. Registered Bye-Laws of the co-operative housing society
4. NOC from the co-operative housing society
5. Latest society maintenance bill(s) / receipts confirming all dues paid by the seller

 

Once these documents are procured, it’s critical to get them reviewed by a legal expert well-versed in property related matters; unless ofcourse, you are conversant with legalities and are able to assess risks (if any) from the documents.

Needless to say, the best approach when purchasing property is to engage an experienced advocate and follow the two-document process: (1) execute an Agreement for Sale at the time of paying the token sum and seek the list of documents as advised above; and (2) execute a Deed of Transfer on being completely satisfied, post the legal due diligence. The documents should be stamped with the requisite stamp duty. Do check the Schedule in the Stamp Act of your state of residence for the value of stamp duty that is payable. Do not omit registering the Deed of Transfer and collecting your Index No. II from the registrar’s office which acts as evidence in the government’s records of the property now being transferred in your name.

Purchasing a property entails many key decisions including if it should be purchased in your sole name or jointly with your spouse or child/children’s names. I look forward to address your doubts and queries which call for legal guidance. Till then, wishing you brightness, joy and happiness in your lives and homes during the festive season. Ushta Te!