News: Vet property documents carefully, avoid fraud-23.02.2018

Vet property documents carefully, avoid fraud

Laxity on your part in examining and filing property documents may cost you your lifetime savings.

The decision to buy a house is one of the biggest a person makes in his lifetime. After saving enough money and securing a home loan, the average Indian buys a house.

Thus, it is important that you check each and every document carefully if you're buying from the secondary market. Here is a list of documents that must be checked when you buy a property.

Sales deed:

The staple legal document which ascertains your ownership of the property, a sales deed, is a proof that the property has been transferred from the seller to the current owner.

Apart from ensuring that the property has a clear title, the registration of a sale deed in the local registrar office is equally important. Asha Nayar Basu, a lawyer, says, "The first and foremost thing to check is the title deed of the property you are going to buy."

Any property's title deed is the legal document which proves the ownership of the property. "You should make sure through the title deed that the property is in the name of the seller. The best practice is to get the property deed reviewed by a lawyer just to make sure that there are no loopholes," Basu says.

Approved building plan:

The new owner must check that the approval plan has been obtained from either jurisdictional commissioner or any other officer authorized by the commissioner, in order to ensure that the property in question has been constructed legally.

Encumbrance certificate: 

An encumbrance certificate is a reference to any liabilities on the property in the form of loan against the property or mortgage that has not been cleared.

An encumbrance certificate gives the details of every transaction on the property and is provided by the sub-registrar's office, where a property is registered. "In other words, this means that the document is a proof of mortgages, title transfers, or any legally registered transaction against the property in question," Atulay Nehra, a Noida-based lawyer, says.

Completion certificate:

A completion certificate by the local civic body is a proof that the building is in compliance with the rules and is built according to the approved building plans. "It is a crucial certificate to ensure the supply of basic amenities like water, power, and sewerage network," Atulay Nehra says.

Occupancy certificate:

After the municipal authorities issue the completion certificate, they also have to issue an occupancy certificate. This document certifies that the building is in compliance with all the local rules and bylaws and, thus, fit for occupation. An inspection is conducted by the civic officials, after which the certificate is awarded to the developer. "It indicates that the property is in a suitable condition for occupancy and it is one of the conditions necessary for occupancy," Dipan Merchant, a senior lawyer, says.

Power of attorney:

A power of attorney is a legal document through which a person nominates another person to rent, sell, or mortgage the property on his behalf. But this document, too, should be registered.

"In order to escape stamp duty and registration charges, many people buy properties on irrevocable special power of attorneys. This led to significant revenue loss for the government and increased litigation, as one property was being sold multiple times to different people," says Jaspal Kaur, who practises in the Punjab and Haryana High Court.

Receipts of taxes and bills:

The buyer must ensure that all dues have been paid until the date of sale. The buyer should always ask for the original receipts.