A Few Things to Consider When Buying a Property

You would think that having the means to pay will make it easier to get your dream home, but buying a property can be a complex and detailed process. There are many obstacles that you need to get through before you are able to complete the purchase, and going in unprepared will only lead to more hurdles than necessary.

Whether you are a couple looking for your dream house or an NRI (non-resident Indian) looking to invest your hard-earned money in appreciating assets like exquisite flats in Gurgaon from Unitech, the key is to approach the whole process systematically. NRI includes those who are Overseas Citizen of India card-holders and PIO (Persons of Indian Origin). Be aware that foreign nationals are restricted from owning an immovable property in India unless they are able to meet the residency requirement of 183 days, which you cannot meet if you are a tourist because a tourist visa only lasts for 180 days.

The key to reducing the stress of buying a property is to know what to expect so that you can prepare. So to help you out, here are a few things to consider when buying a property in India.

Certificate of Title of the Land / Title Deed

The title deed of the property is the legal document that certifies that the name indicated in the said document is the owner of the property being discussed. This is important as the title deed bestows the owner the right and freedom to transfer ownership of the property to another person; this basically means the owner is the only one who has the right to sell the property.

What to look out for when looking at a certificate of title:

It has to be original. You do not want to start the whole process on a photocopy of title deed. Demand for the original or you might just end up wasting a lot of time and effort for nothing just because the owner do not have the original because of a loan he secured, which means the property will have liabilities.

An official seal. There is usually an official seal in the original copy that is signed by the owner and a witness, normally a regional officer or clerk

Watch out for multiple owners. Makes sure that the seller has full rights to sell the property or you somebody else may make a claim to the property after it has been sold.

Encumbrance Certificate

Encumbrance refers to any liabilities that may be associated with the property. For all you know, the property might not be fully paid or that the property might have been used as a security or collateral for a loan. If you are not careful you might get saddled with these liabilities just because you did not do your due research.

What you can do is get an encumbrance certificate from the registering authority in the area. While the government only requests banks and other financial institutions to issue an encumbrance certificate up to 13 days, you can request to make it up to 30. If the owner does disclose that there are still some liabilities on the property, you may include a language in the deed of sale that the previous owner will be settling these liabilities.

Property Tax Receipts

You have to make sure that all taxes regarding the property have been paid. You can ask the owner to produce the latest property tax receipts to see if there are any notices regarding the property. Be careful – there are times that the tax payer does not match the name of the owner in the deed of sale. If this is the case, you have to verify with the village office about who the original owner is, and who has the right to the properties now.

Torence plan

While not necessary in all regions, it is still useful to get a torence plan of the property. This refers to the detailed plan of the property, which is normally done by a surveyor. At the very least it will give you about the exact measurements of the property.

Sale agreement and registration

Once you and the seller have reached an agreement, it is time to close the deal. The details in this document include:

Final actual amount, the advance payment to be made initially, and the arrangement about how the rest of the payment will be made including time frame.

Details of actions to be taken if buyer or seller makes default

Other details such as settlement of current liabilities by the seller.

The document should be printed on 5o Rs stamp paper and should be registered at the Sub-registrar Magistrates (SDM) of the area.

In closing:

While there might still be other details you need to take care of, these are the main things you need to be concerned with when you are buying a property. But now that you know the basics, you can arm yourself with the right paperwork and save yourself some stress when you purchase your property.