Owning
a house is an important thing in ones life. However, one needs to be careful
while buying land/house to avoid falling into legal hassles. A lot of care is
needed from the beginning- right from site seeing till the registration
of the land. The legal status of the land is one of the first issues that
you should address before confirming a property. Don't give any advance
before getting confirmation about the legal status of the property.
Before buying a land, a
number of checks needs to be done to confirm that the land has a clear and
marketable title. The first thing is to find out the tenure, legal right of the holder of the land in government
records. The tenure or possession right could be freehold, leasehold or
may be held under a government grant or 'sanad'. Freehold land is always most
preferable. The seller should provide all the necessary documents to the buyer.
Title deeds
The first step is to see the
title deed of the land which you are going to buy. Confirm whether the land is
in the name of the seller and that the full right to sell the land lies with
only him and no other person. Don't be satisfied with the Xerox copy of the
title deed. Insist on seeing the Original Deed. Sometimes the seller may have
taken a loan by pledging the original deed. It also needs checking whether the
seller has permitted any entry/access to others through this land and whether
any other fact has been suppressed/left undisclosed by the owner of the land.
It is better to get the original deed examined by a lawyer. Along with the
title deed, the buyer can also demand to see the previous deeds of the land
available with the seller.
Tax receipt and bills
Property taxes which are due
to the government or municipality are a first charge on the property and,
therefore, enquiries must next be made in government and municipal offices to
ascertain whether all taxes have been paid up to date. The owner should also
possess the latest tax paid receipts, which you may inspect. Enquiries should
also be made in various departments of the municipality to ascertain whether
any notices or requisitions relating to the property have been issued and are
outstanding and not yet complied with.
While inspecting the
property tax receipt, it can be noted that there are two columns in the tax
receipt. Make sure that the name entered in the owner's column is
correct. The second column will be for the name of the one who paid the
tax. Sometime the owner may not have the tax receipt with him, in such cases,
contact the village office with the survey no. of the land and confirm the
original owner of the land. If you are buying a house along with the
property, then the house tax receipt should also be checked. Also ensure that
the electricity and water bills are up-to-date and if there any is balance
payment to be made, ensure that it is made by the seller.
Encumbrance Certificate
Before buying any land or
house, it is important to confirm that the land does not have any legal dues.
It is available as a certificate called encumbrance from the sub registrar
office where the deed has been registered, stating that the said land does not
have any legal dues and complaints. The encumbrance certificate for the
past thirteen years should be taken or for more clarification, you could demand
30 years encumbrance certificate to be checked. If you still have anymore
doubts, you can take a Possession Certificate of the ownership of the
particular land, which is available from the village office.
Pledged land
Some people may have taken
loan from the bank by pledging their land. Ensure that the seller has paid back
all the amounts due. Don't get satisfied with the receipt of the payment
made. A release certificate from the bank is necessary to release all the
debts over the land legally. You could buy a land without the release
certificate. But if you want to take a loan in future, the release certificate
is a must.
Measuring the land
It is advisable to measure
the land before registering the land in your name. Ensure that the
measurements of the plot and its borders are accurate. You can do this with the
help of a recognized surveyor. This will avoid a lots of problems in the
future. You could also take the Survey Sketch of the land from the Survey
Department and compare for accuracy.
More than one owner
In some cases, the land will
be owned by more than one people. So before registering, check if there is more
than one owner, and if there is, get release certificate from the other
people involved.
Buying land from NRI land owners
A person staying abroad can
also sell his land in India by giving a Power of Attorney to a third person
authorising him the right to sell the land on his behalf. But in such cases,
the power of attorney should be witnessed and duly signed by an officer in the
Indian embassy in his province. There is no legal support for Power of attorney
signed by a notary public.
Agreement
Once all the matters,
financial/otherwise are settled between the parties, it is better to give an
advance and write an agreement. This ensures that the owner does not change his
word regarding the cost as well as make a sale to someone else who offers more
money. The agreement should be written in 50 Rs stamp paper. The agreement
should state the actual cost, the advance amount, the time span within which
the actual sale should take place and how to proceed in case of any default
from either parties, to cover the loss. The agreement can be prepared by a
lawyer and should be signed by both the parties and two witnesses. After
signing the agreement if one of the parties make a default, the other party can
take legal action against him.
Registration
The land can be registered
in a sub registrar office, after preparing the title deed including all the
relevant information. You could get the title deed written by a government
licensed Document writer. Even lawyers can prepare the deed, but the document
can only be computer printed or typed, not handwritten. Handwritten documents
can be prepared by only those who hold the scribe license.
A draft should be prepared
before actually writing the document in stamp paper. Make sure all the details
mentioned are accurate. If there is incorrectness in the document after
registering, a secondary document with the correct details has to be registered
and depending on the incorrectness, the registration expenses will be repeated.
Make sure that the deed is
registered within the time limit mentioned in the agreement. Original title
deed, Previous deeds, Property/House Tax receipts, Torence Plan (optional) etc
plus two witnesses are needed for registering the property. Torence plan is a
detailed plan of the property prepared by a licensed Surveyor which will have
accurate details of the measurements including width, length, borders etc. This
plan is needed only in some specific areas. For land costing more than
five lakhs, the seller should submit either his Pan card or Form Number 16
during registration.
The expenses involved during
registration include Stamp Duty, registration fees, Document writers/ lawyers
fees etc. The stamp duty will depend on the cost of the property and
varies from Municipality to Corporation to Panchayat. In Panchayat the
stamp duty will be 4% of the cost of the land whereas in Municipality it is 5%
and in Corporation 6%. Two percentage will be charged as the registration
fees. Document writers fees also depend on the cost of the property and varies
with individuals. There is a percentage prescribed by the government as
Document writers fee and they cannot charge more than the prescribed
limit. After registration, the registered document will be
received after 2-3 weeks, from the registrar office.
