Thursday, 12 March 2015

Buying a property? Check the legal status

With many projects facing delays and many getting stuck in court for various reasons, investing in a property with clear legal status is a matter of prime importance on a consumer’s mind. However, most of us are unaware of what kind of legalities should be checked before buying a property. To help and consult such consumers, a live chat session was organized with Sadhawa N. Mishra, partner- real estate, SNG Partners. The topic of the discussion was - “How to check the legal status of your property?".

While explaining, the legal checks that should be made while buying an apartment, Mishra, says, “You need to verify the original title deeds along with building approvals/occupancy certificate. Further, you also need to ensure that all the documents for sale are adequately stamped and registered.”

In case of a resale property, Mishra advised, “Apart from the above mentioned documents, please check the transfer deeds, share certificate”.

Do the legalities differ for plots? To this question Mishra answered, “In case of plots, you need to additionally check the Property card/7/12 extract apart from the above mentioned documents.”

Questions around bank approved projects were asked in abundance by the participants. Does bank approval mean that the property has all the legal approvals? Mishra opined, “It is not necessary. However, presumption can be made that once the project is approved, it has got all the legal approvals.”

Mishra advised participants to avoid paying cash to the builders even if they ask for it. He said, “You should not give in cash. However, if the builder is not ready to listen and you want to go ahead with the deal, then you can do so at the time of registration of your agreement. However, cash transaction is not advisable and you should avoid as much as you can.”

To people who buy or has bought properties through brokers, Mishra counselled them to check the legality of property. He asked them to get a sub-registrar search done to ensure that the property is not encumbered and the relevant agreement for sale is registered with the sub-registrar of assurances.

Considering there are many buyers who avoid vetting documents through lawyer and prefer brokers do the job for them, Mishra strongly recommended them to visiting lawyers to get the documents verified.

In case, the final product differs from the product showed in brochures, Mishra says that one can claim the compensation if the same is a part of the MOFA agreement.

Understanding the Legal Jargons:

What are stamp duty charges and why are we supposed to pay it? Mishra defined, “Stamp duty payment is mandatory by law. All the documents related to property or otherwise need to be stamped as per the relevant stamp act.”

Readers also asked about the importance of getting an Encumbrance certificate? Encumbrance certificate is issued by the concerned Sub-Registrar which mentions details of all transactions related to a property. This is important because if there is any sale/mortgage over the property, then the same can be identified.

Mishra also answered questions on the importance of obtaining NOC from society before selling the property. “Yes, it is important to obtain NOC from the society, though it’s not a mandatory requirement. Societies cannot deny issuing NOC unless there is a dispute over the property with respect to payment to be made to society or Municipal Corporation”.

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