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Real Estate Faqs > Buying/Selling   

What is the list of documents that you should verify before booking a property?

Confirm the approved plans from the appropriate authority are in place.
Check that all other permissions from various authorities are in place. E.g. Utility Companies, Environment clearance, Airport Authority, etc.
Confirm that the Land title is clear and there is no disputes/litigation (Title Certificate).
Confirm Builder has the Intimation of Disapproval (IOD) and commencement Certificate (CC) to start construction.
Have the agreement evaluated by an Advocate. Check possession date promised and provide for penalty if Builder does not deliver as agreed.
Check and negotiate the payment schedule. Do not book in Pre-launch without executing and registering the agreement.

What are consequences of non-registration of a document?

An instrument, which is not registered, is inadmissible as evidence

• What is Stamp Duty and who is liable to pay the Stamp Duty, the purchaser or the Developer?

Stamp Duty is a tax, similar to sales tax and income tax collected by the government, and must be paid in full and on time. A stamp duty paid instrument/document is considered a proper and legal instrument/document. The liability of paying stamp duty is that of the purchaser.

In whose name are the Stamps required to be purchased?

The stamps are required to be purchased in the name of any one of the executors to the Instrument.

What is meant by Carpet Area, Built-Up Area & Super Built-Up Area?

•Carpet Area is the area enclosed within the walls, actual area to lay the carpet. This area does not include the thickness of the inner walls. It is the actual used area of an apartment/office unit/showroom etc.
•Built up Area is the carpet area plus the thickness of outer walls and the balcony.
•Super Built Up Area is the built up area plus proportionate area of common areas such as the lobby, lifts shaft, stairs, etc. The plinth area along with a share of all common areas proportionately divided amongst all unit owners makes up the Super Built-up area. Sometimes it may also include the common areas such, swimming pool, garden, clubhouse, etc. This term is therefore only applicable in the case of multi-dwelling units.

What is the checklist for inspection of an apartment before buying it?

It is important to inspect the property, probably this is the largest single investment you will ever make. You should know all the details of the property and need for any major repairs / modifications before you buy. You can crosscheck the commitment made by builder and actual implementation. A close inspection points out the positive aspects of the property, as well as the maintenance that will be necessary to keep it in good shape. After the inspection, you will have a much clearer understanding of the property you are about to purchase.
Few important points to check while inspecting…
•Plumbing systems, drainage, water faucets and sanitary fittings.
•Electrical systems, circuit breakers, wires, capacity of the electric meter, functioning of light fittings
•Roof, walls, ceilings, floors, paint work.
•Foundation, basement and visible structures.
•Doors and windows, latches, locks.
•Structural stability of the building.

What is a Sale Deed?

Sale Deed also known as conveyance deed, is a document by which the seller transfers his right to the purchaser, who, in turn, acquires an absolute ownership of the property. This document is executed subsequent to the execution of the sale agreement and after compliance of various terms and conditions detailed in the sale agreement

How can knowing the Carpet Area, Built-Up Area & Super Built-Up Area of a flat help me in purchasing a flat?

This break up is extremely essential as builders can place anywhere from 65% to 85% per cent of the super built area as carpet area. That means, if the price is quoted as 1,000 sq ft super built up area, the carpet area could be anywhere from just 650 sq ft to 850 sq ft. If this break up is not mentioned in the agreement, demand that the vendor/ builder mention it in the sale deed.

What is meant by Market Value?

Market value of the property as ascertained by the stamp duty authorities on the basis of a ''Ready Recknor'' which gives the per sq. mtr. value of each village, zone and sub-zone . But the ready recknor is not conclusive and is merely a guideline for the stamp office.

What is the checklist for buying residential or commercial property ?

Identify the property you wish to purchase
•Crosscheck of current market rates of property in the vicinity and last known transactions, current market trends.
•Formulate commercial terms.
•Distinguish between negotiable and fixed terms and conditions of the contract, eg. Price, payment schedule, time of completion etc.
•consult a lawyer for legal opinion,
•Check for clear titles of the property. Ask for photocopies of the all deeds of title related to the property to be purchased. Examine the deeds to establish the ownership of the property by seller, preferably through an advocate. Ascertain the survey number, village and registration district of the property as these details are required for registration of the sale. Previous encumbrances and loans, if any on the property must be cleared before completion of purchase of the property.
•Finalise commercial terms of purchase of the property. Ascertain transfer fees, stamp duty and registration charges to be paid on purchase of the property.
•Ascertain outgoings to be for the property i.e. property tax, water and electricity charges, society charges, maintenance charges.
•Request Vendor to obtain, if applicable, consent, permission, sanction, no objection certificate of various authorities such as the (a) society (b) the income tax authority (c) Municipal Corporation (d) the competent authority under the Urban Land Ceiling and Regulation Act (e) any other authority.
•If you are looking for loan for property purchase, contact financial institutions and ask for a pre approval letter, many options are available for loans..
•Permanent Account Number of Vendor and Purchaser under Income Tax laws Payment of stamp duty on the formal agreement or document for transfer of the property, signing by both the Vendor and Purchaser and registration.
•After payment of the entire sale price, take over legal possession of the property and check the receipt of original documents from the Vendor of the property.
•Make sure that property holder’s name is changed in all related records, e.g. society, Electricity Company, municipal corporation, Index II etc.

Which documents must be compulsory registered?

The following documents are required to be registered compulsorily under the Indian Registration Act, 1908:
(a) Every time the immovable property is sold/purchased, the agreement needs to be registered.
(b)Instrument of gift of immovable property;
(c)Other non-testamentary instruments which purport or operate to create, declare, assign, limit or extinguish, whether in future or in present, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards to or in immovable property.
(d)Non-testamentary instruments which acknowledge the receipt or payment of any consideration on account of creation, declaration, assignment, limitation or extinction of any such right, title or interest;
(e)Lease of immovable property from year to year or for any term exceeding one year or reserving a yearly rent. But the State Government may publish an order in official gazette exempting any district or a part of a district or a lease that does not exceed the term of five years and the annual rent of which does not exceed Rs. 50/- .
(f)Non-testamentary instruments transferring or assigning any decree or order of a court or any award when such decree or order or award purports or operates to create, declare assign, limit or extinguish, whether in future or in present, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards to or in immovable property.
(g)Authorities to adopt a son that is not conferred by a will.

What should a purchaser keep in mind while purchasing a residential flat?

Locality – Proximity to workplace, educational institutions, hospitals, shopping areas, entertainment centres, transportation, pollution levels,Quoted area of the flat i.e. Carpet, Built Up Area and super Built Up Area, Car parking space , Quality of construction, Reputation of the builder or seller, Sufficient water and electric supply, other utilities, Cost components: price, stamp duty, registration charges, transfer fees, maintenance charges, any other payments, Appreciation of the property for resale and rental,Any other distinguishing features or advantages of the property.

Which documents are to be verified before purchase of a Flat?

If you want to purchase a property, you have to look at the approved layout plan, approved building plan, ownership documents, carryout search, etc. Contact an advocate before you purchase a property so that he can advise you.
Before you purchase a flat, you have to have a title and document search conducted by a competent advocate. You cannot do it yourself. You have to use the services of a competent advocate. It is a professional job to be done with professional assistance.

What is the criteria when selecting a locality/area before buying a property?

When you are selecting an area to live in, always check for the points below:
1. Power availability Drainage sewerage
2. Garbage disposal system
3. Street lighting
4. Roads & transport links
5. Proximity to market
6. Post office
7. Banks, school
8. Police stations
9. Medical facilities

What is the significance of issuing a paper notice before buying of any property?

To see if any person has any objections to the property being purchased.

 

  • Only agriculturist can buy agricultural property. NRIs/foreigners are specifically debarred from buying such property.

Can you sell the property without registration?

No. You cannot sell a property without proper registered document(s). A registered document is the authenticity and guarantee of the ownership over the property. Neither should one sell a property without proper registered documents and neither should one purchase a property wherein the seller does not have registered document of his/her ownership in the Property.

Can a Power of Attorney be issued to someone else to register the document?

Yes, by executing a ‘Special Power of Attorney’ for this purpose, the property owner can transfer his/her right to register a property document to someone else.

Due diligence before buying a resale property

1. Check for a duly stamped registry 2. Ensure no dues are accorded to the builder 3. Check for seller’s name in municipal records 4. Confirm seller’s membership in the society (if formed) 5. Ensure there are no pending bills, charges or taxes 6. Make sure that the property is mortgage free 7. Sanctioned Building Plan (to ensure no unauthorized construction) 8. Previous title documents (that chain of title is complete)

How to verify the authenticity of the various documents submitted by the seller?

1. Approved plans can be verified from the corporation or other plan sanctioning authority’s office. 2. Ownership documents of land or development rights held by the builder can be confirmed from the Sub Registrar’s office where they are registered. 3. Society share certificate can be verified from the Society itself.

What all documents should you have at the time of possession?

1. All original chain of agreements form part of the title documents and must be obtained by the buyer. 2. Do remember to obtain the original registration receipts and the original stamp duty receipts. 3. A letter of possession duly witnessed by two witnesses confirming the physical handover of the premises. 4. In case of a Society, the original share certificate together with all transfer forms duly executed. 5. Proof of payment of all dues such as maintenance, electricity, phone, water, property taxes upto the date of handing over possession. 6. A limited power of attorney from the Seller(s) authorizing the buyer(s) to sign all documents and applications etc. pertaining to the said premises. 7. An NOC from the Society or other body confirming that they have no objection to the transfer.

How to verify project approvals documents?

The documents needed to be verified for checking project approvals. 1: Confirm approved plans, 2: Previous title documents (that chain of title is complete) 3: Make sure that the property is mortgage free ( nil encumbrance certificate ) 4: Other approvals such as environmental clearances are important 5:NOC from utility companies.(P.W.D , electricity, etc.) 6: Title Search must be carried out at the Sub Registrar’s office to verify title and ascertain encumbrances, if any.

How to verify project approvals documents?

Same documents as above would need to be verified for checking project approvals. Confirm approved plans, other approvals such as environmental clearances are important and NOC from utility companies. Title Search must be carried out at the Sub Registrar’s office to verify title and ascertain encumbrances, if any.

What is a building completion certificate?

A building completion certificate is the final document granted by the plan sanctioning authority and usually follows the occupancy certificate. This document certifies that all acts necessary in connection with the construction of a building are complete.

What should be your strategy in dealing with the banks while purchasing a property?

Give yourself comfortable time. Do not hurry your purchase or loan in any case. Shopping around for a home loan will help you to get the best financing deal. Shopping, comparing, seeking clarification and negotiating with banks may save you thousands of rupees. a) Obtain information from several banks Home loans are available from mainly two types of lenders--commercial banks and housing finance companies. Different lenders may quote you different rates of interest and other terms and conditions, so you should contact several lenders to make sure you’re getting the best value for money. Find out how much of a down payment you are required to pay, and find out all the costs involved in the loan (including processing fees, administrative charges and prepayment charges levied by banks). Knowing just the amount of the EMI or the interest rate is not good enough. Similarly, ask for information on loan amount, loan term, and type of loan (fixed or floating) so that you can compare the information and take an informed decision. The following is some important information that you will require. i) Rates Ask your lender about its current home loan interest rates and whether the rate is fixed or floating. Remember that when interest rates in the economy go up so does the floating rates and hence the monthly re-payment. If the rate quoted is a floating rate, ask how your rate and loan payment will vary, including the extent to which your loan payment will be reduced when rates go down by a certain percentage. Ask your lender to what index your floating home loan is referenced / linked and the periodicity of updation of that index. Also ask your bank whether the index is internal or external and how and where it is published. Ask about the loan’s annual percentage rates (APR). The APR takes into account not only the interest rate but also fees and certain other charges that you may be required to pay, expressed as a yearly rate. Banks are obliged to reveal the APR if requested for by the customer. ii) Reset Clause Check the reset clause, especially in the case of fixed interest rate loan as the rates will not be fixed throughout the tenure of the loan. iii) Spread/Mark up Check if the margin in the case of the floating rate is fixed or variable. The rate of interest you have to pay will vary accordingly. iv) Fees A home loan often requires payment of various fees, such as loan origination or processing charges, administrative charges, documentation, late payment, changing the loan tenure, switching to different loan package during the loan tenure, restructuring of loan, changing from fixed to floating interest rate loan and vice versa, legal fee, technical inspection fee, recurring annual service fee, document retrieval charges and pre-payment charges, if you want to prepay the loan. Every lender should be able to give you an estimate of its fees. Many of these fees are negotiable / can be waived also. Ask what each fee includes. Sometimes several components are lumped into one fee. Ask for an explanation of any fee you do not understand. Also, remember that most of these fees are perhaps negotiable! Do negotiate with your bank before agreeing to a particular fee. See how the all inclusive rate compares with the all inclusive rates offered by other banks. While planning your finances, don't forget to include the costs of stamp duty and registration. v) Down Payments / Margin Some lenders require 20/30 percent of the home’s purchase price as a down payment from you. However, many lenders also offer loans that require less than 20/30 percent down payment, sometimes as little as 5 percent .Ask about the lender’s requirements for a down payment and also negotiate with him to reduce the down payments. b) Obtain the best deal Once you know what each bank has to offer in terms of rates, fees and down payments, negotiate for the best deal. Ask the lender to write down all the costs associated with the loan. Then ask if the bank will waive or reduce one or more of its fees or agree to a lower rate. Do make sure that the bank is not agreeing to lower one fee while raising another or to lower the rate while raising the fees. Ask for clarification in case you do not understand any particular term. All banks are obliged to explain the most important terms and conditions of the home loan in detail. Once you are satisfied with the terms you have negotiated, please do obtain a written offer letter from the lender and keep a copy with you. Read the offer letter carefully before signing.

What precautions do you need to take if you are purchasing a property that is not a newly built one?

Ensure that the documents being provided to you are not colour photocopies. Check the internet for other modus operandi to fraud and ensure clear title to the asset. Seek advice only from authentic sources such as your bank. Get the no encumbrance certificate to find the true title holder and if it is mortgaged to any financier. Obtain all tax papers to ensure that all documents are up to date.

What is a conveyance deed? Why is it required?

The word conveyance means the transfer of ownership or interest in real property from one person to another by a document, such as a deed, lease, or mortgage. In India, transfer of property or rights in immovable property is governed by the Transfer of Property Act, 1882. For the transfer of any immovable property or rights in immovable property, it is necessary to execute a conveyance deed.

How to register your property?

The original property document to be registered along with a copy is to be presented with the concerned Sub- Registrar by the Seller. Both Seller and the Purchaser are present before the concerned Sub- Registrar who admits the execution of the document. The sub- registrar after making the due inquiry registers the documents and returns the original document to the concerned party.

What constitutes conclusion of sale of a property?

An agreement of sale, coupled with actual possession of the property would be considered as a conclusion of the sale. Usually, the entire amount is paid at the time of handing over possession.

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