What are the legal requirements to buy a House ?

Buying a dream home is not an easy task, and any mistake on the legal aspects you make can cause you a great deal of trouble.

As a prospective home buyer, you should rest assured that your bank will perform the due diligence on your loan application after providing your documentation and papers. Nevertheless, don't leave it to the bank. Every year, Indian courts receive a large number of property-related cases, which remind homebuyers that they should exercise caution throughout the process.

In this article, we briefly discuss the documents you must know and examine before you are ready to sign a contract.

Legal documents needed for property transactions

First, the buyer should conduct due diligence to ensure the seller holds a clear, marketable, and free of encumbrance title over the property. Some of the documents include

  • Title documents of the property Government order for grant, succession certificate, sale deed, gift deed, will, partition deed, etc., evidencing the transfer of title over the years, culminating in the vesting of property with the seller.
  • Nature of title: Leasehold, freehold, or development right.
  • A development agreement and power of attorney, executed by the owners in favour of the seller, if the seller claims development rights.
  • The office of the jurisdictional sub-registrar of assurances is to be notified of all title documents stamped and registered.
  • Registration of Khata in the seller's name.
  • Litigation information about pending or past cases.
  • There is an original title document available with the seller.

The reader is further encouraged to speak with your legal advisor. The documents listed are indicative.

2. Check the identity of the seller

Furthermore, the buyer should verify the identity of the seller and any conditions governing the sale of the property in the same manner as the title.

Ascertaining the identity of a seller is best accomplished with the help of the following documents: one’s Aadhaar number, PAN number, passport, income tax returns, salary certificates, etc.

3. Conversion and land-use permissions

Since government protection laws forbid non-agricultural purchases of agricultural land, conversion to non-agricultural use has assumed crucial importance due to increasing urbanization and consolidation of revenue lands into urban conglomerates.

In addition, the buyer should verify that the property is developed according to the zoning plan, for example residential, commercial, industrial, public/semi-public, parks, etc.

A change in land use must be approved by the Town Planning Authority when the use of the land is different from the notified zone.

4. Construction approvals

The same interest rate on two loans is not the same. Besides interest rates, there are other facWhenever buying an apartment or land with built-up buildings, the buyer should also examine the building plan/layout approved by the local municipality, along with all approvals provided by the government, housing authority, water and sewage authorities, electricity agencies, environmental authorities, etc.

Building construction permits must include copies of NOCs issued by different government departments, including the Pollution Board, Environment Department, Sewage Board and Traffic and Coordination Department, which serve as an 'intimation of disapproval'.

5. Occupancy certificate

An occupancy certificate from the competent authority is required before a property can be conveyed by the seller. A buyer who uses a property before it is occupied may be subject to fines under the building codes, as well as the possibility of the building being demolished.

6. Status of tax payment

If property taxes are not paid, it will cause the property to be less marketable. It is the buyer's responsibility to ensure that the seller has not defaulted on paying property taxes. All utility bills should be requested from the seller. The owner of the property must pay all pending dues to the property once it is transferred into your name, whether these are utility or other types of dues.

7. Real Estate (Regulation and Development) Act, 2016 (RERA)

According to the RERA, developers must register their projects with the authority constituted by the Act. If you are planning to buy a property under the RERA, you should verify that the project has been registered with the authority. According to the official RERA website for each state, this information also includes details of any cases or complaints filed against the developer of the project, and if any defaults have occurred. This information helps buyers better understand the credibility of the developer and the project, and allows them to make an informed decision.

The law mandates that all real estate brokers in the state need to be registered with RERA, as well, in order to conduct business legally. Thus, only hire a real estate broker after confirming his RERA registration. Remember that RERA registrations must be renewed periodically for agents. Make sure you are dealing with the right person. An important benefit of having a regulatory body is that it enforces a standard process of operation and penalizes violators.

We hope you found this short article to be informative when dealing with the legalities of buying your home.

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