How to do a legal check on your property?

Buying a property is a big investment and a major move financially and emotionally. However, if the legal formalities in property buying are not well taken care of, the biggest decision of your life can turn into a nightmare. So, before you invest your hard earned money into a property or a scheme that looks attractive, it is wise to know how to be sure about the legal status of your property. Magicbricks brings in Dhiraj Jain, Partner-Real Estate, SNG & Partners on GuruTalk – an online live chat on Magicbricks to guide you on ‘How to do a legal check on your property?’

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Jain listed five important things that one needs to consider before buying any property:

    Your budget
    Type of property i.e. under construction or re-sale
    Proper legal and technical due diligence to ensure no charge or mortgage is existing
    In case of re-sale or ready possession, please ensure that the Occupation Certificate is obtained
    One needs to ensure that the unit/property is free from charge of any banks/financial institutions and in case of any charge, ensure that NOC from the Bank is obtained prior to entering into an agreement

 On guiding about the documents to check Jain said, “In case of property purchase, apart from the above listed points, kindly ensure the following:

(i) A Title Certificate in favour of the developer is obtained (not in favour of the land owners in case of development agreement) clearly entitling his right in the property

(ii) IOD and CC (Completion Certificate) and approval for plans for the particular unit are in place

While talking about the importance of Occupancy Certificate (OC) Jain says, “An OC is must before a person is entitled to occupy the premises. A legal possession of a property can be taken only after the OC is received. Normally the builder hands over the possession for fit out only. The property with the OC is the best option to buy.”

But how do we ensure that the property we are going to buy is free from any legal disputes without going for due diligence and if a bank finances the property? Can we assume that the property is free from legal disputes? To this, Jain answered, “There is no way to find if any dispute exists. It is advisable that a complete due diligence be done and also a public notice be issued prior to such purchase. Kindly ensure all the original documents are in possession”.

On asking what the legal provisions one takes recourse to if the developer firm has asked for upfront cash in black. Jain said, “This is something which is not governed. The same is basically on commercial understanding and not regulated. However, whatever is your commercial agreement please ensure that an agreement is registered in your favour so that you have a right and interest in that particular unit”.

To those who are buying a flat in the pre-launch offer with allotment letter only, Jain advised, “Please ensure that the payment is not made over 20 per cent prior to an agreement being registered. Your rights will be mentioned in the allotment letter itself. However, it is advisable that a due diligence be done prior to investing in the same.”

In case if the builder is delaying the completion of the scheme, Jain said, “Normally an agreement will give the legal options in case of delay and the extension. In case the developer has exceeded all limits, there will be a termination clause, please refer to the same. You can approach a consumer court for necessary relief.”

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