“The ache for home lives in all of us, the safe place where we can go as we are and not be questioned.”
Maya Angelou
This urge to own immovable property whether as a home or as an investment translates to purchasing it either in the form of a flat or land. Purchasing a flat entail an investment of time, efforts and money by the buyer. The buyer’s failure to adopt certain precautions may result into disputes or even a nullification the transaction. Therefore, one should understand basic documents and checks involved in such transactions to form a primary opinion before entering into it. As this is a vast area, this article deals with the preliminary checks which the buyer should verify before buying an existing flat.
- Original Title Documents
- This refers to the first set of documents such as Sale Deed, Certificate of Sale, Agreement for Sale, Transfer Deed, Gift Deed, Release Deed etc. which show the transfer of the flat to the present seller from the date when it was first acquired. The buyer should check every document from the first transfer to every subsequent transfer of the flat. The buyer should pay special attention to the registration and stamp duty receipts of these documents.
- The buyer must enquire about the Conveyance Deed of the land on which such building is constructed. If the land has been conveyed by the promoter in favour of the society, the buyer should obtain a copy thereof from the seller.
- The buyer should ensure compliance of personal laws, especially in respect of matters related to inheritance, succession etc.
- In case any of these original deeds are lost by the seller, the buyer may insist on a copy of police complaint lodged and public notice published in newspapers along with a letter from the Advocate issuing such public notice certifying that no claims were received in pursuance thereof.
- Original Share Certificate
- The Share Certificates are proof of membership to the society in which such flat exists. Therefore, Share Certificates should reflect the name of the present seller as the current member and owner of shares in the society associated with the flat.
- As a nominee of a flat is merely a holder of the property and not its owner, the buyer should pay special attention to the status or capacity of the present seller as mentioned on the Share Certificate.
- Occupation Certificate – Completion Certificate
- This is a certificate issued by the local municipal authority certifying that the entire building (full occupation certificate) or any specific floor/s (part occupation certificate) have been constructed in accordance with approved plans and can thus be legally occupied. The permission in respect of building floor on which the flat is situated should be verified in the Certificate.
- If the flat is situated in an old building and such certificate is unavailable, it is advisable that the buyer obtain a copy of the sanctioned plans for such construction as well as the commencement certificate at least up to the floor on which the flat is situated from the seller and get the same verified by a certified architect/engineer to confirm that the construction is in accordance with the approved plans.
- Consideration Receipt and Utility Bills
- The buyer must obtain an authentic signed receipt from the seller for any consideration paid by them in respect of the flat.
- Further, it is prudent to verify that recent utility bills such as maintenance, electricity, gas and telephone associated with the flat bear the name of the present seller.
- A glance of latest utility bills and property tax bills and receipts provide the buyer with a confirmation that there are no such arrears pending in respect of the flat.
- Miscellaneous Documents
- These documents may differ from one transaction to another and additional aspects will have to be taken into consideration as the case may be.
- ‘No Objection Certificates’ from appropriate authorities like Collector, MHADA, SRA, CIDCO, MIDC; if the building is constructed on land owned by these government entities.
- A copy of the ‘Probate’ or ‘Letters of Administration’ obtained from the appropriate Court where interest of a deceased person(s) is involved in the property.
- If there was prior litigation on the flat, a copy of the final order passed in the matter.
- If there was a prior mortgage on the flat, a copy of the ‘No Dues No Charge Certificate’ issued by the Mortgagee Institution on repayment of loan by the seller.
Though the basics remain identical as above, each transaction being based on different facts requires a tailored inquiry. Thus, the above list is indicative and not exhaustive. In addition to it, as the law puts the responsibility of prudence on the buyer[1] of the property, he must conduct a search in the registration offices within whose authority the flat is located to ensure that no other agreements have been registered in respect of the same flat. The buyer should also read the title report issued by an advocate certifying a clear title of the underneath land/project, generally annexed to the first agreement to form his opinion. The buyer may also engage an advocate to obtain an updated title report. The buyer should seek legal opinion for an extensive due diligence before entering into such transactions to prevent and mitigate the occurrence of litigation.
EndNote:
[1] Transfer of Property Act, § 3, No. 4, Acts of Parliament, 1882 (India).