Are you planning to buy a property? Be aware of your rights can certainly protect you against suspicious practices by real estate agents/builders. It is best to get your property papers inspected by a professional property Lawyer before buying any property.
Below is the checklist for buyers:
PERSONAL DETAILS
The agreement must capture the seller’s complete details. This includes father’s name, address, PAN number, UID number, and bank account information. It must include exact details of the property’s location and municipal, administrative division or collector’s land record number. The agreement ought to be witnessed by two people, each from the buyer’s and seller’s side.
PROPERTY DOCUMENTS
The seller must clarify the authenticity of the title documents and ownership transfer in the agreement along with the transfer and handing over of possession, is happening in a legal and fully-attested manner. The agreement must include the fact that all dues related to the property, have been cleared up to the date of transfer. Further, the agreement must fully secure the buyer from any disputes related to the property.
TERMINATION
The termination clause defines the consequences imposed on the parties in case of deviation from the code of conduct expected to be adhered by them. The agreement may contain either a ‘termination by convenience’ clause where either party can end the agreement.
DISPUTE RESOLUTION
The dispute resolution clause sets out the mechanism by which the parties can resolve their disputes. This is alternative to settling the matter through litigation.
AMENITIES
The amenities clause helps the purchaser know the additional benefits and mentions the supplementary amount towards maintenance charges. In case of any default on the amenities sought to be provided, the purchaser may consider it as a breach of contract.
PENALTY
A penalty clause should be incorporated in the purchase agreement, specifying the penalties in case of failure from both, seller and buyer.
CONVERSION AND LAND-USE PERMISSIONS
With increasing urbanisation, conversion of property for non-agricultural use assumes crucial significance, since several state laws restrict purchase of agricultural property by non-agriculturists. Secondly, the buyer must examine the plan that the property is developed in accordance with the zoning plan – such as residential, commercial, industrial, public/semi-public, parks and open spaces, etc.
CONSTRUCTION APPROVALS
For purchase of apartment or land with constructed building, the buyer should also scrutinise the building plan / layout plan sanctioned by the local municipal authorities, along with approvals issued by government, for providing infrastructure facilities, water, sewage, electricity, environmental clearance, fire safety approval, etc.
OCCUPANCY CERTIFICATE
It is mandatory for the seller to obtain the occupancy certificate from the authority. Use of the property, without obtaining occupancy, makes the buyer to penalty under the applicable building bye-laws, along with the risk of demolition of the property.
STATUS OF TAX PAYMENT
Non-payment of property taxes constitute a charge on the property, affecting its market value. So, the buyer must verify with the municipal authorities that the seller has not malfunctioned on payment of property taxes.
ENCUMBRANCE
Searches at the jurisdictional sub-registrar office or the official web portal of the Ministry of Corporate Affairs (if the seller is a company) will reveal information of any registered encumbrance on the property. By way of caution, the purchaser may also issue public notice in newspapers, prior to completing the transaction, calling for claims from interested third parties, if any.
PHYSICAL SURVEY AND ACCESS TO THE PROPERTY
The buyer may undertake a physical survey and confirm the extent and measurement of the property. In the case of land, it is advisable to identify the boundaries and access to the property.
DOCUMENTS REQUIRED IN CASE OF LOAN OUTSTANDING
In case there is any loan outstanding on the property you are buying, it is crucial to perform due diligence and check some documents, before signing a deal. As a buyer, you can ask the seller to clear the outstanding home loan amount or a part of it, obtain the original property documents from the bank and get the property registered in your name, after which you can pay the remaining amount. It is advisable that the buyer requests for the closure of the loan and gets a ‘no dues certificate’ from the bank, before the purchase.
CONCLUSION
Registering a legal purchase agreement, is of benefit to the buyer, since it offers protection from legal complications at any stage of ownership or resale. No change can be made once the purchase agreement is drafted and registered. If any change needs to be made, buyer should give the consent and it should be amended in the agreement.
