Buying a home is the biggest life decision for many investors. It’s a massive investment and commitment to make, and most investors would go through this event only once in their lives. And hence, it is important to get the documentation of this event in order.
In this article, we will take a look at some important documents, some of which need to be registered in order to avoid any legal hassles in the future.
Sale deed: This is the most important document pertaining to property purchase. This is a proof of sale of property and transfer of ownership. The sale is not deemed complete until both parties, i.e. seller and buyer, sign or execute the sale deed. You should sign the sale deed only after you are satisfied with the property bearing a clear title. The sale deed is the most comprehensive deed bearing all the information about the buyer, seller, location of property, area, sale consideration, etc.
Sale agreement: A very similar sounding document is known as agreement of sale, which details the terms and conditions under which the sale will take place. This is also an important document that helps both buyers and sellers at the time of executing the sale deed. Buyers should ensure that an agreement of sale document is agreed upon by both buyer and seller so that nobody can deviate from it at the time of execution of sale.
Approved plan: You should obtain the approved plan for the building from the concerned authorities. The government defines the areas for building, roads, public utilities, and commercial area in the plan. This is also available on government websites. You should go through the plan to check for any discrepancy. Make sure that the property you are buying falls under the category for which you are going to use it and is located in an area designated for such use.
Conversion certificate: India has plenty of agricultural land. Today, most housing properties are built on agriculture land after getting due permission from competent authorities. Hence, a conversion certificate is needed to build home on any agricultural land. You should ensure that the conversion certificate has been issued for the land to be converted to housing complex.
Encumbrance Certificate: Encumbrance certificate is a proof that the property is free from any monetary liabilities. It means if the property was bought with a loan, the loan has been repaid and the ownership now lies with the seller. This will ensure that once you buy the property, it will be easily transferred to your ownership legally and without any hassle. Essentially, an encumbrance certificate will give you all the details about the mortgages, title transfers, time periods of ownerships, and any details that may relate to the property in question.
Registration of sale deed: This is very important. Once you buy a property, make sure that you register it by paying the appropriate registration fee and stamp duty. You have to pay about 5% of the total value of the property as stamp duty and 1% of the total value as registration fee (Bangalore rates). You may have to pay cess and surcharge too. The actual fee may change for different states. Please check with the local registrar to know about the rates before registering.
Mother deed: Finally, a document known as the mother deed gives the details of the property since the beginning. It covers the ownership titles from the beginning and how it changed till the current owner of the property. Obtain this mother deed as this will help you when you want to sell the property. If the mother deed is not available, make sure that you get certified copies from the registrar office.
The author is CEO, BankBazaar.com