Buying a property is perhaps the single biggest investment made by a person during his lifetime. Thus, you need to exert due caution in buying a house, lest your precious savings goes down the drain. After zeroing in on the desired property, you still would have to wade through a formidable maze of tedious legalities and endless paperwork. Therefore, in order to cruise home in style, you ought to acquaint yourself with various legal jargons and other technicalities. Find out more about buying property in India.
The Title Deed
The Title Card is an investigation into the title of the land, over a period of 30 years, states whether the property is unencumbered and has a clear and marketable title. The detailed report should be prepared for the seller by his lawyer and should be checked by the purchaser’s lawyer. If the title were not clear and marketable, most of the major financial institutions would refuse to finance this property. Hence, you should approach a financial institution in order to check if they would provide a loan for that particular property.
Property Under Construction
For a project under construction, you should ask for the allotment letter and development agreement. The allotment letter contains details regarding the agreed price, payment and construction schedule, house plans, delivery date and builder’s liability in case of late completion or problems after possession. It is issued to the buyer upon payment of the 15% of the property value to the developer. The development agreement is inked between the builder and the landowner and contains details regarding the terms and conditions on which the landowner has permitted development of his property.
Constructed Property
In case of constructed properties, you should ensure that the seller has the title and possession of the property as well as the right to transfer the property. Check if the building adheres to relevant municipal/planning authority requirements. Ensure that there are no tenants and get a declaration that the property was purchased from the seller’s funds and is not mortgaged. Check whether dues such as property tax, society, water and electricity bills, etc. have been paid in full. Make sure to take possession of all relevant documents and the original allotment letter, completion certificate, occupation certificate and all other documents, given by the original builder.
Stamp Duty And Sale Deed
The stamp duty is usually a percentage of the transaction value levied by the state government, on every registered sale. The agreement to sell clearly states the stamp duty, which is usually paid by the buyer, and he gets his name registered in the land revenue records. The final sale deed should be stamped and registered at the appropriate local area office. Both the developer/seller and the purchaser need to be present at the sub-registrars office, for registering the agreement.
FAQs
Q What are all the important documents one should check before buying any property ?
A If you want to purchase a property, you have to look at the approved layout plan, approved building plan, ownership documents, carryout search, etc. Contact an advocate before you purchase a property so that he can advise you.
Q What is the difference between built up area, super built up area, and carpet area?
A Carpet Area: This is the area of the apartment/building which does not include the area of the walls. Built up Area: This includes the area of the walls also Super Built up Area: This includes the built up area alongwith the area under common spaces such as the lobby, lifts, stairs, etc. This term is therefore only applicable in the case of multi-dwelling units.
Q Who is liable to pay Stamp Duty-the buyer or the seller?
A The liability of paying stamp duty is that of the buyer unless there is an agreement to the contrary. Section 30, of Bombay Stamp Act, 1958 states the liability for payment of stamp duty.
Q In whose name are the stamps required to be purchased ?
A The stamps are required to be purchased in the name of any one of the executors to the Instrument.
Q What is meant by the market value of the property and is Stamp Duty payable on the market value of the property or on consideration as stated in the agreement ?
A Market value means the price at which a property could be bought in the open market on the date of execution of such instrument. The Stamp Duty is payable on the agreement value of the property or the market value which ever is higher.
Q Which are the instruments that attract the payment of Stamp Duty ?
A The instruments like Agreement to Sell, Conveyance Deed, Exchange of property, Gift Deed, Partition Deed, Power of Attorney, settlement and Deed and Transfer of lease attract Stamp Duty on market value of the property.
Q How to verify the authenticity of the various documents submitted by the seller of the house, particularly with regard to the possibility that the house has not been sold earlier to a third party ?
A Regarding authenticity of documents, again, you have to take the help of an advocate to verify.
Q Who is liable to pay Stamp Duty – the buyer or the seller ?
A The liability of paying stamp duty is that of the buyer unless there is an agreement to the contrary. Section 30, of Bombay Stamp Act, 1958 states the liability for payment of stamp duty.
Q In whose name are the stamps required to be purchased ?
A The stamps are required to be purchased in the name of any one of the executors to the Instrument.
Q Which are the instruments that attract the payment of Stamp Duty ?
A The instruments like Agreement to sell, Conveyance Deed, Exchange of property, Gift Deed, Partition Deed, Power of Attorney, settlement and Deed and Transfer of lease attract Stamp Duty on market value of the property.
Q Who is the appropriate authority for knowing the market value of the property?
A The Sub-Registrar of the area in whose jurisdiction the property is located is the appropriate authority for knowing the market value of the property.
