The Haryana State Government has put a ban on registration of deeds for transfer of land across the state till 17th August, 2020. This is because a 'series of malpractices' has come in Government’s notice in the past few weeks during the COVID-19 lockdown period. This move is expected to bring all sale and purchase of landed properties to a grinding halt across the state.
To be a bonafide purchaser of immovable property, a buyer has to prove that he had acted in a prudent manner prior to purchasing the immovable property and has paid the entire consideration, which was agreed upon, to the seller. In India, it is necessary to do a Property Title Verification before buying. One must do it to verify that property to be purchased carries an impeccable title and is free from all kinds of charges. Considering the high property purchase budget, we suggest the property buyers to get the property title search done by a qualified lawyer or expert.
What Is a Title Search?
The title search is a thorough research of the property and review of all the property papers before investing, buying, selling, Leasing of a property. It is a process where one is taking the reasonable and necessary steps and this may also include conducting the search in Registrar Office and reading through different Acts and Regulations.
Various Aspects of Title Search
There are various aspects to title search and can be varied from one property to another property, i.e, ready to buy, resale, under construction, redeveloped properties etc.
There are many acts which come into force while selling or buying of the property such as, Registration Act, 1908 Transfer Of Property Act, 1882, and respective state laws (for example in Maharashtra, The Maharashtra Co-Op Society Act, 1960, Maharashtra Apartment Ownership Act, 1970) etc.
Personal Laws also come under action in the case of the death of the owner and succession of the property. Here the due diligence process and the documentation review gets complicated by oneself. A layman may not be conscious of all these laws. Also, a transaction which looks easy can be invalid in the eyes of the law.
It is common for a property purchaser doing a property title verification to take opinion from people with entrusted interest. However, it is important to note that the opinion is based on the documentation review and thorough review of law and relevant regulations. A purchaser’s erroneous decisions are a threat to the property owner.
Not everything that looks fair and simple is actually that way. It shall be reliable with someone who has experience. There are many things from which a lawyer can protect you when dealing with property-related transactions.
Purpose for Title Search and due diligence is to get an answer on the following questions
1) Is the seller the authorized owner to sell the property?
2) Does he or she have the rights to sell the property?
3) Is the property free from all kinds of charges?
4) What are the restrictions on the usage of the property?
Types of Title Search
Depending on the transaction type, the property and the participants’ objectives, we can divide a title search into two categories:
Full Search: A full search is mainly done while giving a title certificate of the property in cases of sale, resale, long-term lease transactions and for transactions which involve procurement of financing by mortgaging the property. In a full search, the search concerning the status of ownership of the property is mainly conducted for a period preceding thirty years or more years from the date on which the seller in question came to obtain the property.
It also includes a broad search of all features relating to the history of that property. Those include the status of disputes, status of encumbrances, the status of compliance of such applicable regulations.
These details must be related to the property in question.
Limited Search for Title Verification before buying:
A limited search is basically conducted in the transactions where the property is taken on lease for a short term which is mainly under 13 years. In such cases, the time span for which the preceding owner of the property is traced is mainly restricted to fifteen years or less than that from the date on which the present owner of the property came to obtain the property.
So, to avoid all these problems, conduct the property title verification before buying the property.
Chain of documents needs to be verified before Title Verification
The following are the different documents that we need to check for property title verification.
Check for the Clear Title: Any property must have a clear title, without any dispute. When buying a property, one should clearly mention the land title with the seller name as ‘ owner of the property’.
Check for mother document: After checking the Seller’s Title deed, verify the mother document. It is the document that shows the origin of the title. This document shows the foremost or true owner from whom the power devolves to the seller.
Ask For Bank Approvals: If the bank is funding you, your half of the job is already done. Banks assess the property before they accept your loan. Many banks give on-site offers for an apartment project. It clearly indicates that the bank legally checked the property and it has all approvals in place.
Encumbrance Certificate: An encumbrance certificate is a document that indicates that a property is legally free of any mortgage or loan outstanding. It also mentions the name of the preceding property owner.
The document provides following details about Title Verification before buying:
- the previous owner had mortgaged the property when buying a resale property and
- he/she paid all the dues.
Check the Approved Plan With Actual Site: While buying an apartment project, ensure the copy of the official approved map from the builder is passed by the local authority. It gives a good idea about the environment and the development spree if it encroaches illegally.
Check Out Property Tax Slips: When purchasing a resale property ask the previous owner for property tax slips. It provides us details like whether the colony or the area is regularized or illegal. It also shares whether the previous owner registered the land and if left any duties pending with the municipal authority.
This article sheds lights on the document review and Property Title Verification process. We recommend the purchaser to approach a lawyer or a legal expert to get the documentation verified and take the property title report to avoid any kind of ownership issues in the future.
- Why the Property Registration Mandatory?
- What is Property Registration Time Duration?
- Plot Registration On Multiple Lands