Who doesn’t dream of a perfect house? Almost everyone has it on their wishlist to find a well designed house in a convenient location with all possible amenities.
And, to meet this growing demand among the urban population, properties have been seen mushrooming in all cities. However, not all of them are legal and you might want to keep your hands off them.
After paying EMI for several months you don’t want to be taken by surprise when the builder fails to deliver you your property on time due to legal constraints.
In order to be sure that you are investing in an undisputed property, you must maintain a checklist and here’s what it should look like.
Approval from banks/FIs
One way to be sure about the reputation of a builder is by checking if the banks approve of it. Banks only allow you to take home loan for a property that is legally clear. When you apply for a home loan, look for banks that have a tie-up with the project. This minimises the chances of default by developers.
Even if you don’t need to take loan for funding a property, we recommend you to avail for home loan for a small portion of the overall fund required to ensure the property papers are in place and the bank approves of it.
Key approvals and licenses
Make sure the builder has all necessary licences and approvals from the government. In the recent past, a reputed builder was stopped from continuing the construction work, as it failed to get environmental clearance.
It is important that you check all the requisite clearances are in place before you buy a property. This includes tax receipts, encumbrance certificate etc. Check the purpose for which the land has been issued to the developer and make sure the house you are buying is as per the approved layout.
Visit the site
Today, buying property has become easy with the advancement of technology. It can be done sitting in a remote location without visiting the project at all. This makes you dependent on the updates sent across by the builder.
It’s best to visit the property in regular intervals and find out the progress in person. You can also talk to the people who have received the possession and are living there or neighbours around the project to get a second opinion. However, do not completely rely on the information provided by property consultants or realty brokers.
Always verify the original papers
It’s important that you go through all documents before you sign on them and verify the original ones. If a builder denies to provide the original document, drop the deal.
You must verify the title deed to check the rights of the seller on the property he is selling. Go through the encumbrance certificate from the seller and verify the legality of the land papers from the local authority. Also, check the layout plan approval. When buying a resale property, get the release or no dues certificate from the bank where the property was pledged by the seller.
Hire a good property lawyer
It’s always better to involve an experienced lawyer to verify the authenticity of the property papers He can also help you negotiate the terms and conditions while the agreement paper is being drafted. The lawyer would also ensure that you come out of trouble easily in case there is any legal dispute during the transaction.
Considering that buying a house is one of the most expensive transactions, you must try and find out all necessary information before you lay your hands on it. An illegal construction can cost a lot of money and time to sort out the issues.
The author is CEO, BankBazaar