Legal Documents to Check Before Buying Property

Last Updated at: Oct 21, 2020
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As per a survey by Magicbricks, 70% of India’s property buyers prefer for properties costing within the Rs 50 lakh budget. This is leg up to affordable housing in India.


Legal Documents to Check Before Buying Property
The Central Housing Ministry has asked the states to consider reducing stamp duty on property registration, given the pandemic situation. In August 2020, Maharashtra decided to slash the stamp duty from 5% to 2% till  December 31 this year.


The exact laws governing the sale of the property might be slightly different in different states, but there are a few permissions and documents a builder or promoter must have if they are selling flats. Here are the documents to be checked before buying a flat from builder:

Title deed:

Firstly, the property documents check before buying property is this document which will tell you whether the builder owns the property being sold and has the right to sell the property and the freedom to transfer ownership. Insist on seeing the original, and not a copy of the title deed. It will also tell you whether everything is legal or if there is litigation in progress regarding the property. A buyer should check the original deed and confirm that the land is in the name of the developer, to ensure that no one else has the right to sell it. It is advisable to get the title reviewed by a lawyer. Let’s further see the documents to check before buying a flat from builder.

Get Your Property Registered

Intimation of disapproval (IOD):

This is a set of permissions which must be obtained by a developer at various stages of construction. ‘This would involve acquiring approvals and a No Objection Certificate (NOC) from various departments such as the Storm Water and Drain Department, Sewage Departments, Forest Department, Environment Department, Traffic and Coordination Department, Chief Fire Officer, Airport Authority and Pollution Board, among others.

Commencement certificate (CC):

This is a document which must be issued by the local authorities and legally allows a builder to start the actual construction work. Shveta explains that this is important as any construction without procuring a CC is illegal.

Encumbrance certificate:

One of the important documents to be checked before buying flat is EC. This can be obtained from the office of the registration authority (the sub registrar’s office) and tells you whether the property carries any legal or monetary liabilities or has any litigations pending. It can go as far back as 30 years.

Approved layout plans:

The layout plans must be approved by the appropriate planning authorities. Homebuyers need exercise caution. As there have been cases where developers deviated from the approved layouts, by adding extra floors or reducing open areas.

Purchase agreement:

You should go through these legal documents for buying a house carefully to make sure it includes everything you were promised. You can only hold a builder or promoter legally accountable for what is in the purchase agreement, not what has been verbally promised to you.

The agreement should contain all major details of the construction project such as the project specification, apartments, payment terms, completion deadlines and the type and amount of penalty, should any party default. The agreement should also contain a clause to transfer the common areas to the society. However, this ensures the plot remains with the original owners. And that the developer cannot engage in further construction on this land.

Occupancy certificate (OC):

Issued by local authorities, this certificate states that the property has been constructed in compliance with the provided permissions. Therefore, at this stage, the developer would have completed all necessary water, sewage and electrical connections.

These are the documents to check before buying a flat. They act as the legal property documents as well.