Investing in a property? Here’s a document checklist

By: | Published: August 8, 2016 4:44 PM

Documents related to the sanctioned layout, planning, commencement certificate, title certificate, permission for non-agricultural use, urban land ceiling (ULC) order, and permission papers related to environmental clearances are some key documents that investors must verify before investing in a project.

Investing in a property? Here’s a document checklistDocuments related to the sanctioned layout, planning, commencement certificate, title certificate, permission for non-agricultural use, urban land ceiling (ULC) order, and permission papers related to environmental clearances are some key documents that investors must verify before investing in a project.

Precaution is advised in any property dealing. Whether you are an end user or an investor, the authenticity of the papers pertaining to a property are critical to its hassle-free ownership.

Documents related to the sanctioned layout, planning, commencement certificate, title certificate, permission for non-agricultural use, urban land ceiling (ULC) order, and permission papers related to environmental clearances are some key documents that investors must verify before investing in a project.

Let’s understand these important documents one by one.

Property documents and certificates
If you have selected a property to buy, your due diligence starts with the verification of each of the property documents and certificates.

The most important document is the title certificate i.e. title deed. A title deed is a legal document that proves the builder’s right to the property. Do not hesitate to consult a lawyer or a property expert to verify the authenticity of the title deed. You can also demand the chain of agreements that would clearly reveal the history of the property. Your objective should be to ensure a clear title over the property you wish to buy.

Next is the layout plan. The property construction should adhere to a layout plan. If there is any discrepancy, avoid buying such property.

Demand for the occupation or possession certificate. If the builder has violated any legal norms or has left the construction incomplete as per the layout plan, he won’t be able to provide it. You are not allowed to use the apartment unless you get the occupancy certificate for it. The local municipal body provides the occupancy certificate (OC). If you live in an apartment without such a certificate, then the occupancy is said to be illegal. The occupancy certificate is issued only once a builder completes the project and gets the completion certificate. If any of the government’s norms has been violated in the project, the occupancy certificate is not issued. The occupancy certificate is important to get income tax benefits against the home loan. You may also need it to get your water and electricity connection. Without it, you may not be able to resell the property.

So, ensure to get the 6 most important documents while investing in the property i.e. title deed, commencement certificate, completion certificate, chain of agreement (mother deed), layout plan and occupancy/possession certificate.

Other important documents
The other important documents required while investing in a property are no dues certificate from various government departments such as water and electricity, municipal tax, building society charges, etc.

Also verify the loan and encumbrances from various banks and financial institutions. Take a copy of the latest electricity bill and latest tax payment receipt, mutation copy, power of attorney (if any) etc.

Verify all the documents with the original. Now days, the clearances from the pollution department is also very important. If in the project any environmental law has been violated, the pollution department may invoke litigation in the future.

Why are these documents important?
Based on available document you can easily assess the authenticity of the builder or the seller. If you approach a bank to get a home loan, the first thing that banks ask for is the availability of all documents. If you fall short of any document, the bank could reject your loan application. The requirement of property documents is equally important whether you buy an under construction property or a ready to shift property.

Don’t depend on banks for verification
Do not depend on banks to perform the due diligence on your behalf. Take the example of a case from Greater Noida a few years back when home buyers got loans for under construction properties. After a few years, the farmer who had sold the land protested against the builders and filed cases in the court. Several projects were stalled and home buyers suffered.

Therefore, always take records of each and every document when you buy a property.

Many times you would have heard the news about delays in possession, disputes over property, and problems created by errant builders. In all such cases the main factor that ensures protection to home buyers is the availability of all the requisite documents.

If you are planning to invest money in the property market, always take the legal advice of a lawyer or property consultant.

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