Buying a House: Documentation that Needs to be Checked

Last Updated at: September 29, 2019

Buying a house is an exciting time for all parties involved. But under the guise of excitement, one should not make any foolish mistakes like not ensuring all the documents are in place. To help first-time home-buyers, we give a list of all the paperwork that is essential.

When you’re looking at a new building, the developer will be more than happy to show you around the property, but ensure that he isn’t reluctant about showing you the property documents. If you’re unfamiliar with legal parlance, get a lawyer to peruse the documents for you. Property documents can tell you whether the construction is on freehold land, who its current owner is, and if there are any restrictions or reservations on the plot.

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Here are the documents you must see, and perhaps get copies of, before signing any agreement:

Conveyance deed: Certifies that the ownership of the property has been conveyed to you from the seller.

Get Your Property Registered

Approved Building Plan: Confirms that the municipal corporation has approved the building plan. Check specifically that your floor has been approved.

Index II: Mentions the names of the sellers and buyers. It would also be prudent to check that the builder has signed a development agreement deal with the landowner.

Record of rights: Gives details such as the survey numbers, area, date from which the current owner was registered as the owner.

Commencement certificate: Given by the civic authorities permitting the building to begin construction.

Development agreement: Contains the terms on which the landowner has allowed the builder to develop the property.

Also, before taking possession of the flat, insist on seeing the completion and occupation certificates that are issued by the civic authority. These entitle the building to water supply, electricity supply, and elevators.

Signing the agreement

While the above-mentioned documents will clear up any doubts you may have over the legitimacy of the construction, the agreement will also contain details specific to the apartment you are buying, including its price, the down-payment and the date on which the property is to be delivered. Agreements usually favour the seller, whether you’re buying the property from a builder or not. So it’s best to get a lawyer or a person well-versed in such matters to peruse the document before you sign it. Whatever is included in the agreement is exactly what you’re entitled to, so it’s important that it does include all that you were promised.

In case you’re buying in an under-construction building, here are the details it must include:

1) date of possession
2) penalty if there is a delay
3) price you have to pay
4) carpet area of the property
5) intervals at which installments are to be paid
6) precise description of the location of your flat
7) early exit charges
8) when each stage of construction will be completed
9) details of the common areas and facilities
10) an escalation clause, which describes the situations in which the price may increase.

For new flats, the agreement won’t include construction-related clauses, but do check to see that it makes a mention of all the amenities you were promised and has the date when you can take possession and the carpet area of the house. Furthermore, many new properties are approved by home loan companies during construction. While you won’t have this option with most small builders, there is a way to mitigate risk with properties of moderately- to well-established developers. Some developers, in an attempt to separate themselves from their tainted peers, ask financial institutions to examine and approve the titles and approval documents. Not only does this help establish the builder’s bona fides, it also makes it easier to get a home loan. However, you will probably have to take a loan from the same bank that approved the project.

There are six documents which are vital while buying a property. They are, namely, the conveyance deed, approved building plan, index II, record of rights, commencement certificate, and development agreement. If your taking possession of flat, also check the completion and occupation certificates. Lastly, sign the required docs only after reviewing them thoroughly.

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