How to make safe real estate investments?

Is the deluge of marketing offers in the real estate confusing you? Don’t worry. To know how to make safe real estate investments and not get swayed by jargons and marketing gimmicks used by agents and developers, Magicbricks organised a live chat session – GuruTalk with Asha Nayar Basu, senior partner, S Jalan & Company, Solicitors & Advocates.

In most cases, the legal status of the land on which the property is situated is of primary concern and needs to be addressed before finalising the deal. Basu said, “It is better not to make any payments before checking the legal position of the property.”

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For instance, a property can be inherited in a number of ways on the death of the title holder. If there is a ‘Will’ then it should be registered with the authorities and only then can beneficiaries get the right to transfer their respective shares. “At times, even though a ‘Will’ is present, the property may be mutated as per natural succession which can be considered illegal. Therefore, it is best to satisfy oneself completely before proceeding with any property transaction,” added Basu.

So what and how to check? Basu explains, “First and foremost check the Title Deed of the property. This is a legal document which proves the ownership of a property. You should ensure through the title deed that the property is solely in the name of the seller and no one else has any rights to sell it.”

Basu further informed, “Always check the original papers, as in some cases people show only copies of the originals. Besides, this will also help to ascertain the usage allowed on the property i.e. commercial, residential or mixed. Also, find out if the property is freehold, leasehold or a government accommodation. The best practice is to get the property deed reviewed by an expert lawyer just to make sure there are no loop holes”.

Ensure all taxes have been paid on the selected property and the seller has all receipts. Before buying the property, ensure that the owner has the Encumbrance Certificate. Finally, for a valid ownership, a registered Sale Deed needs to be executed, in the absence of which you will not get a valid title to the property.

“Other documents that should be checked carefully include Encumbrance Certificate, Release Certificate, Surveyor's Report and finally if the owner is an NRI or is not present, then the Power of Attorney,” added Basu.

The property buyer can also file an application to the PRO of the authority in order to verify the land title, approved building plan and the Completion Certificate of the property.

The Guru advised that precautionary steps, to protect against delay in completion of the project, have to be taken in the beginning at the time of execution of the Sale Agreement.

“All terms, conditions and stipulations pertaining to the agreement, including the delivery schedule, should be mentioned in the Sale Agreement. It must be ensured that at the time of handing over possession of the property, compensation for delay in possession, recourse to legal remedy, all are clearly mentioned. All future steps have to be taken in accordance with the same,” Basu said.

Therefore, it is imperative that clauses pertaining to delays are included in the agreement. Please make all checks before signing on the dotted line. Then when the builder misses a milestone, you can write a complaint letter to the builder reminding him of the delay and demand for immediate delivery. The Guru also advices to first send a notice to the builder, giving him sufficient time to address the issue. In case there is no action/response taken, you can knock the door of the consumer court. Maintain a file of all communications.

Source:http://content.magicbricks.com/industry-news/delhi-ncr-real-estate-news/how-to-make-safe-real-estate-investments/79779.html