According to research, around 66% of civil disputes in India are related to land or property ownership. So, it is crucial to have all the required legal documents in place before deciding to purchase any property. Let’s take a look at the checklist of all the legal documents that are necessary to buy property in India.
Property Documents List
The Land Records
When you plan to buy property, it’s important to ensure that the builder owns the land where they are proposing the venture. You can check the land records to confirm the property ownership rights, commitments, and mortgages. In Maharashtra, you can find the land records and history with the Survey Numbers and 7/12 records available online.
The Land Use Certificate
Builders need a Land Use or Change of Land Use (CLU) certificate before constructing any property. Residential projects can’t be built in areas meant for industrial or agricultural purposes.
The Layout Approvals
It is a fact that some builders sell real estate properties without obtaining the necessary outline and approvals. These builders may falsely claim that the property prices will increase once all approvals are granted. However, if the approvals are delayed, you may find yourself in a difficult situation. Hence, it is strongly recommended that you do not invest in such projects that have pending approvals.
The Master Plan
When reviewing property brochures, always verify upcoming infrastructure projects with the relevant government authority and do not rely on vague claims made by builders or consultants.
The No Objection Certificates & Clearances
Depending on the location and type of property, it may be necessary to obtain several NOCs. Some commonly required NOCs include the Non-Agricultural Land Certificate, Environmental Clearance Certificate, Fire NOC, and Society NOC (in the case of purchasing a property in a cooperative housing society).
The Certificate of Commencement
A Certificate of Commencement from the Town Planning Department is mandatory for construction work. The certificate is issued to the builder only after obtaining all necessary approvals and clearances.
The Allotment Letter
To confirm the property deal, you must pay a certain token amount. Once the payment has been made, the builder will issue you an allotment letter, including the payment mode and other important agreement clauses.
Before making any payment, it is crucial that you carefully read and understand the clauses mentioned in the allotment letter. Make sure to verify if there are any penalty clauses for delays in possession.
The Builder-Buyer Agreement
Once you have paid 20-30% of the basic property cost, the developer will sign a Builder-Buyer Agreement with you. This agreement is quite comprehensive and includes details such as the layout plan, specifications, and property features. It will also mention the expected date of possession and the penalty amount that may be charged in case of delay.
The Completion Certificate
The Municipal Corporation issues a completion certificate after verifying if the project is completed according to the approved layout plan. Make sure to check if your builder has it.
The Occupancy Certificate
Municipal Corporation issues the Occupation Certificate after ensuring that basic amenities such as electricity, sewage, and water supply are provided as per the approved plan. Before taking possession, ensure that the builder has acknowledged the Completion and Occupancy certificates.
The Sale Deed Registration
Once the project has been granted Completion and Occupancy Certificates, the builder will transfer ownership of the property to you by executing a Sale Deed, which will be registered at the Registrar’s office. The Sale Deed is the most important document proving your property ownership. If you have taken a home loan from a bank, the bank will hold the original copy of the Sale Deed until the loan is fully repaid.
Possession Letter
When purchasing a house, one of the most important documents to obtain is the possession letter. This document is prepared by the builder and states the date when the buyer will take possession of the property. It is created in the builder’s name and issued after receiving the Completion Certificate. It’s important to note that this letter does not serve as proof of property ownership. To establish ownership, the home buyer must obtain an Occupancy Certificate.
Khata Certificate
This document is used to verify the revenue details of a property, including its location, area, and size, in order to pay property taxes. The Khata Certificate confirms the property owner’s identity for tax payments and is also necessary to obtain utility connections such as electricity and water. It is required when registering a new property or transferring ownership.
Payment Receipts
When purchasing a new property, you must obtain the original payment receipts from the developer. However, if it’s a resale property, you can request a copy of the seller’s receipts to provide to the bank.
Property Tax Receipts
Property tax is an unavoidable payment when you buy property in India. It is important to ensure that the previous owner has paid all property taxes and that there are no pending amounts. This receipt serves as legal documentation when buying property.
Encumbrance Certificate
This certificate serves as proof that there are no legal or mortgage-related dues pending on the property you intend to buy. The bank will require you to present this certificate during the loan approval process. The certificate contains all the details of the property transactions that have taken place over time. In case there are any encumbrances to the property you intend to buy, you will need to fill out Form 15. However, if there are no pending legal dues, you will receive Form 16.
Compliance under the RERA (Regulation and Development) Act, 2016
Under the RERA (Regulation and Development) Act, 2016, it is compulsory for developers to register their projects with the RERA authority. As a buyer, verifying whether the property you are interested in has been RERA-registered is important. Each state’s RERA also provides information on any complaints filed against a particular project. All real estate brokers must also be registered with the state RERA to operate legally.
In a nutshell, having all the necessary documents in place when purchasing a property is crucial, as it involves a significant investment and a series of legal procedures that require thorough documentation. These documents include the sale agreement, title deed, occupancy certificate, completion certificate, building plan approvals, and more. These documents serve as evidence of ownership when buying a property. Therefore, it is essential to verify all the documents thoroughly to ensure a smooth property transaction. Homesfy aims to simplify your home-buying process and provide you with a hassle-free experience while buying a house.