Property purchases are big money deals and one should always be aware of what documentation should be in place before going ahead with such a deal. There have been many cases in India were there have been many fraudulent sales and this has mainly occurred due to the ignorance of the buyer about what documents to check for before closing the deal. This is a list of possible documents that one should check before even making the first payments to secure the property.
1. Sale Deed: A Sale Deed is the core legal document that acts as proof of sale and transfer of ownership of the property from the seller to the buyer. A Sale Deed has to be mandatorily registered. It is important that before the Sale Deed is executed one should execute the sale agreement and should check for compliance of various terms and conditions as agreed upon between the buyer and the seller. Before executing the Sale Deed, the buyer should check whether the property has a clear title. He/she should also confirm if the property is subject to any encumbrance charges.
2. Building Approval Plan: The local municipal body will sanction the construction of the building. A building owner has to get an approved plan from the jurisdictional Commissioner or an officer authorized by such Commissioner. However, the authorities sanction a building approval plan based on the zonal classification, road width, floor area ratio (FAR) and plot depth. The documents include- Title Deed, property assessment extract, property PID number, city survey sketch (from the Department of Survey and Settlement and Land Records), up-to-date tax paid receipt, earlier sanctioned plans (if any), property drawings, 2 copies of demand drafts, foundation certificate (if any) and a land use certificate issued by the competent authority (viz., Dy. Commissioner). It is mandatory that the building owner hires a registered architect who will draw a plan meeting the applicable bye laws.
3. Parent Document: The parent document is an important legal document that traces the origin/antecedent ownership of the property from the start (if the property has had various owners). It is a document that helps in the further sale of the property, thereby establishing the new ownership.
4. Conversion Certificate (Agricultural to Non-Agricultural land): With a vast amount of land being agricultural in nature in Karnataka, a Conversion Certificate is mandatory to be obtained from the legal body for the property. A Conversion Certificate is issued to change the use of the land from agricultural to non-agricultural purpose from the competent revenue authority. Further, the competent revenue authority requests the Department of Town and Country Planning to issue an NOC for the conversion of land for residential purpose.
5. Encumbrance Certificate (EC): Encumbrance means charges in the ownership or liabilities created on a property that is held against a home loan as security. An EC consists of all the registered transactions done on the property during the period for which the EC is sought. Simply put, it is a certificate sought for a particular period evidencing the property purchase/sale, the presence of any transaction or mortgage.
6. Completion Certificate (for a constructed property): A Completion Certificate is issued by the municipal authorities denoting that the building is in compliance with their rules in terms of height, distance from the road, and is constructed as per the approved plans etc. This document is important at the time of purchasing a property and seeking a home loan.
Aside from the major documents one should ensure to ask for a few minor details also before proceeding with the sale. For example, a seller should settle all the statutory payments such as property tax, cess, water charges, society charges, electricity charges, maintenance charges etc., (subject to the agreement) before executing the Sale Deed. The documents will change from state to state and one must ensure that they consult with a real estate legal consultant with all the documents before proceeding on any sale or purchase.