Monday, 21 March 2016

12 Legal Documents You Will Encounter In Your Home Purchase Journey

Though a structure of bricks and tiles, your home is also built with the help of various papers, literally. A thorough paper check assumes significance in the light of the complexities involved with the home-buying process. To make this easy for you, MakaanIQ lists the documents you must know about if you are planning a home purchase.

Ownership proof of the land

As a buyer, you must ensure that the land on which your home is being constructed is in the ownership of the developer. The sale deed might be in favour of the developer or in the form of a memorandum of understanding (MoU) between the developer and the original land owner.

Non-encumbrance certificate

A non-encumbrance certificate states the history of a property over the duration of 12-30 years, including the ownership transfers during that period, mortgages, etc. It should also state as the conclusion that the property is free from all encumbrance. Many banks also demand this document for processing of the home loan.

Copy of the relative order in case of conversion of agricultural land

Townships and mega projects generally come up on lands which were earlier demarcated as agricultural areas. In such cases, it should be seen that the land-use pattern has been changed in the government records. In many cases, developers get some land converted and start construction according to their plan, hoping that they would get permission for the remaining land in due course. If this does not happen, the fate of your home may be in limbo. Buyer have to check the documents to confirm that their flats are being constructed on a residential land.

Copy of permission from appropriate authority and approved building plan

In many cases, developers have the permission to construct “X” number of floors but they get “X+Y” number of floors constructed. In such a scenario, if the buyer has skipped the above document, he would never know whether his floor is authorised or not. In case the flat/floor plan is not approved, there is always a danger of demolition from government agencies.

Land and building tax paid receipts, location sketch of property certified by revenue authorities

These documents help one to locate the property in the government records and it becomes easy to get the mutation of the property done in favour of the buyer. Obtaining the latest bills, tax paid receipts also lets us know whether all the dues have been paid or are still pending.

Commencement certificate

A commencement certificate is applicable for an under- construction property. It is issued by the local development authority after inspecting the site. It allows the developers to start construction of the building and states that the permission has been duly obtained. Failure to obtain a commencement certificate can result in seizure, levy of penalties or even demolition of the construction which has already taken place.

Agreement of sale

It is at the initial stage that an agreement to sale is entered into between the parties. The property might still be at the construction stage and only an advance booking amount might have been given by the buyer to the seller. Agreement to sale elaborates upon the terms as agreed on between the parties. The date of possession, penalty clause, arbitration clause, jurisdiction and force majeure are among the major points about which the buyer needs to be cautious.

Original share certificate(s) issued by housing society

In many residential societies, shares are allotted in proportion to the person’s ownership in the society. In such cases, the original share certificate is necessary to ascertain the subsequent transfer of ownership of the flat. This certificate also aid in the transfer of ownership in the buyer’s name.

No-objection certificate from the residents welfare association (RWA)

It has been seen in certain cases that even after the transfer and registration of the property, many societies refuse to register the name of the buyer in their records. An NOC from the society obtained beforehand can be useful in such cases.

Occupancy and completion certificates

These two papers are applicable for a constructed property. The occupancy certificate is obtained by the developer after the construction has been completed. An inspection is carried out by the specified agencies to ascertain that the construction is done according to specified norms. The completion certificate is issued by the municipal authority which denotes that the building has complied with the rules in terms of height, distance from the road, and is constructed according to the approved plans, etc.

Letter of allotment from housing board /society/ private developer

A letter of allotment states that the premises have been allotted to you. It relinquishes the right of the housing board /society/private developer to allot the premises to anyone else from now on and transfers their rights to the allottee.

Sale deed

A registered sale deed is a legally acceptable evidence of the buyer’s ownership of the property. The sale deed needs to be registered at the earliest. It must be ensured that the buyer as well as the seller, either in person or through their legally authorised representatives, sign the deed. The stamp papers should be of adequate valuation and details of parties as well as that of property is clearly mentioned.

Source: MakaanIQ