Key Checklist for Buying a Property

Last Updated at: Sep 30, 2020
Key Legal Checklist for buying a Property
The Tamil Nadu Government has introduced the upgraded version of STAR 3.0 (Simplified and Transparent Administration of Registration) project to eliminate ambiguity in property ownership. It will include photographs of landowners, copy of the registered sale deed, and copies of encumbrance certificates, along with other property ownership documents.


Recently the government announced a Rs 25,000 crore bailout package to revive stalled real estate projects. This will be routed through an Alternative Investment Fund (AIF), with the government contributing Rs 10,000 crore and financial institutions like LIC and SBI bringing in the remaining Rs 15,000 crore. The AIF will be managed by SBICap Ventures.


If you are planning to purchase your own property, get ready to do some significant paperwork because the process involves showcasing, providing proof and verifying several documents needed to complete the registration of the property. Not knowing your way around such legal work will lead to severe penalties later on and it is hence beneficial for the buyer to be aware of such laws to prevent mishaps later on. Here’s a look at the complete legal checklist required to purchase a property in India.

  • The sale deed works as the most essential document for the purchase of property and proves the ownership of the asset. It is registered in the Sub- Registrar’s Office wherein the property is located and needs to be produced for finalising the purchase.
    • The Khata or extract is required for the registration of a new property and also if you want to transfer ownership of a property. The extract functions as proof of entry in the local records and financial institutions require such a certificate showing that the property was built according to the standards laid down by the governing body before sanctioning a loan.
    • The Mutation Register is used for Gram Panchayat properties and proves ownership and also provides details of the previous owner. While the original is not required, a copy is needed to buy properties within Gram Panchayat jurisdiction.
    • A power of attorney proves the validity of the transfer of the property and states that an authorised person approved the sale or purchase and an original must be produced to procure a loan from banks.
    • The buyer must possess a copy of the building plan which has been approved by the governing authority to prove that the property was built as per the rules and regulations established by the statutory body.
    • Almost 19 NOCs are required to build a house or apartment, and the number of certificates needed varies from state to state depending on the regulations of the state government.
    • An allotment letter is mandatory to obtain a home loan and is issued by a housing authority to describe the property and contains details regarding the financials involved in the purchase, sale and construction of the property. It is issued on a designated letterhead and not on a stamp paper. Moreover, such a document is granted only to the first owner of the property and the subsequent owners need to get a copy of the original.
    • A Sale Agreement contains information regarding the terms and conditions of the lease or sale, the possession date, financial details of the transaction and details about facilities. It holds the developer responsible for the property and is essential for acquiring a home loan.
    • A Possession Letter sets a date for granting the possession of the property and is issued by the developer.
    • Collect payment receipts while purchasing a new property and ask for copies if you are buying a resale property.
    • Ensure that the previous owners have paid their property taxes and make sure to get a copy regarding the same. Always ensure that there are no outstanding dues with respect to land tax.
    • An encumbrance certificate helps to prove that the property has no pending legal dues or mortgages and is essential for procuring a loan. Form 15 is issued if a property has remaining dues while the government provides a Form 16 if there are no encumbrances.
    • A Completion Certificate proves that the bulking has been successfully built as per the regulations laid out by the government and is mandatory for getting a home loan approved by a financial institution.
    • An occupancy certificate establishes that the building is ready to be occupied and that the construction has been completed as per the approved plan.

Get Your Property Registered

Make sure you hire a good lawyer because the unending stream of paperwork might seem daunting for someone with no legal experience. A good attorney will help simplify the process and makes the process that much easier for you. Most lawyers will provide you with a list of documents you will need for transferring or purchasing property as per the rules of the state in which you required the property, and this helps you narrow your search. Make sure you check whether the seller is the genuine owner of the property and also check for the genuineness of the documents he or she furnishes. Check the history of agreements concerning the property as that gives you an idea of how the property has been handed down.

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