- Real Estate Sector is one of the major sector contributing largely to the Indian Economy, right from generating employment to consumption of power and use of cement in real estate projects, the Real Estate industry contributes in a big way to the Indian GDP.
- The Industry and its players however have, many times have turned out to be notorious and thus harming gullible homebuyers.
- In order to curb such practices of the Developers and the Industry the Government has initiated many steps in favour of the Citizens, which includes the establishment and commencement of the RERA Authorities in all the states and union territories of India.
- We hereunder will now find a detailed description of documents and actions which can be termed as Due-Diligence before purchasing a property.
Checklist of Documents before Buying Property
- Legal Title Deed
Legal Title Deed refers to a report, which is prepared by a learned advocate, wherein he states the status of the land on which the said building has come up, such title report is prepared after taking into account various documents like the search report, property card, 7/12 extracts of the property, any litigation which the property might be subjected to, thus giving a clarity on title of the said Land, Legal Title Deed report acts as one of the most important document in order to fulfill the Due-Diligence before purchasing a property.
- In case of Resale property, original sale deed of previous owner
This original sale deed is an important document, because when the subsequent sale takes place it helps in deriving out the title of the earlier owner, meaning how the former owner came into possession of the said flat and thereby easing the process of finding the chain of title.
- In case of New Property, RERA Registration
Real Estate Regulatory Authority, popularly known as the RERA has become an important part of the Real Estate industry due to the powers conferred upon it by the statute, it requires the developers to register their projects upon it and give all details which are important for the potential buyers to know.
IOD, refers to Intimation of Disapproval this is an essential document required to commence construction, it includes permissions and checks from various departments including Fire, Tree Authority, Electric Department etc.
- In case of New Property, Commencement Certificate
Commencement Certificate is the official communication from the approving authorities that the developer can commence construction in his property, it is obtained after submission of architectural plans to the concerned authorities, application for IOD and CC and their approval can be understood as the bonafide intent of the developer and thus act as support to buyers to make their purchase decisions.
- Approval from Financial Institutions
Often Real Estate Projects are funded and financed by Financial Institutions, such Institutions however give funds for these projects only after thoroughly examining legal and economic stability of such projects and hence projects approved by such institutions are more trustworthy.
- Pending Cases if Any on the Property
Before purchasing any property it should be checked with the seller whether there are any pending suits on the property which might affect the buyer, in order to find out such suits or any other claim , a Public Notice can be issued in the local newspaper and claims if any can be invited, in order to avoid any future dispute after the sale process is completed.
- Occupancy Certificate
Occupancy Certificate, is issued by the Local Authorities or the concerned Municipal Corporation whether the structure/tenement/building is fit to be occupied by the buyers, occupancy certificate implies that the building and the builder have complied with and completed all the regulations pertaining to the development as per law and as required by the concerned authorities, if the Occupancy Certificate is not issued it means there is an ongoing dispute between the Authorities and the Developer and the said building is not fit for occupation, however the authorities can direct such developers to meet their eligibility norms to get the OC granted.
- So these are the checklist of documents before buying a property, which make the buyer of such property more secure
- Due-Diligence before purchasing a property can protect the buyer from any undue fraud on the part of the seller of the property