Check Out This Practical Legal Guide to Real Estate Transactions Before Buying a Home

Before purchasing a home please ensure that all legal paperwork is thoroughly reviewed, since even the smallest error might jeopardize your house acquisition.

Purchasing real estate can be a messy and difficult process, particularly for first-time buyers. Therefore, it is vital that you do an independent review of the property's title and development elements.

Experts recommend doing a full legal due diligence, ideally with the aid of a legal practitioner. Here is a list of crucial papers that you should review before to signing on the dotted line.

In the event of a house that is ready to move in, the majority of buyers believe that the developer has reviewed the land's title and that the only remaining task is the completion of the project.

However, the aforementioned developer inspection is subjective and dependent on the developer's risk tolerance. The following are the top four papers that a prospective property buyer should review prior to making a purchase.

A current title certificate issued by an attorney together with a search report:

Ideally, the purchaser should hire a lawyer to do independent title due diligence on the project. In the majority of instances, however, buyers skip such independent inspections, in which case they contact the developer for an updated title certificate. A purchaser may then request clarification from the developer or take appropriate corrective action based on an examination of the defects listed in the title certificate. A purchaser should also ensure that searches are conducted in the records of the relevant sub-registrar of assurances to determine whether or not papers affecting the apartment have been previously registered.

Disputes revealed on the RERA website:

Every promoter (developer) of an RERA-registered project is obligated to declare any pending lawsuit concerning the project. Before making a purchase, a buyer should review such litigations posted on the RERA site and evaluate their overall effect on the project.

Encumbrances declared on the RERA site and the lender's NOC:

A promoter must also report on the RERA site any encumbrances impacting the project, such mortgages on the land/development rights or hypothecation of project receivables, made by the developer to ensure repayment of loans obtained from lenders. In such instances, the developer's sale of units would need approval from the relevant lender. The purchaser must guarantee that the developer obtains such authorization from the lender and that the consent is not packaged with terms that impact the purchaser's rights or the sale of the apartment.

Permissions and approvals, including the Occupancy Certificate (OC):

The most significant document to verify for ready-to-occupy apartments is that such units are approved to be inhabited by the relevant planning authority, as demonstrated by the authority's Occupancy Certificate.

The Occupancy certificate may be given for a portion of the project; consequently, a buyer must confirm that the apartment intended for purchase is covered by the certificate.

In the case of a resale apartment, one of the first things a buyer should verify is if the seller has taken out a loan using the flat as collateral; if so, it is crucial to determine whether the seller has returned the whole amount.

In addition, a society-issued no-objection certificate is required for the selling of the apartment.

Additionally, the following additional checks should be conducted:
The property for sale might have been obtained in a variety of ways, including purchase, gift, inheritance, or bequest. A sensible purchaser should examine ownership documentation for at least the previous 30 years.

At the time of registration of the sale deed of the property at the office of the jurisdictional sub-registrar/Registrar of Assurance, an extract of municipal/revenue/panchayat records is required to assure the effective completion of the transaction.

The paperwork indicating the location of the property for resale would aid you in establishing your claim to possession and ownership of the property for resale in the event of future ownership issues.

Moreover, if there are limits on building operations on the resold property owing to its proximity to bodies of water, rivers, or military airbases, then the location documentation will be important.

ACCESS

It is quite common for the access road to a layout or project where the resale property is located to cross private properties or projects. Initially, the owner of such private property may allow access to the resale property through their property, but later, for a variety of reasons, they may simply deny access, resulting in the resale property becoming landlocked and unusable. A basic precaution of ensuring that you possess a document confirming the right of access, particularly via private property, may prevent you from being burdened with a landlocked parcel.

In the event of a building project, only reputable developers with an impeccable track record of meeting deadlines should be trusted.

The following documents are crucial for making a legally sound and technically accurate property purchase decision:

TITLE REPORT:
Typically, a title certificate or report would include the following:

a. Flow of title pertaining to the land

b. The liens/charges that affect the project/land

c. Objections, if any, submitted in response to the public notice made for checking the promoter's land titled.

d. Third-party rights generated by the promoter or claims against the promoter over the property or construction area

e. Litigations

f. The land/project development-related authorizations and approvals. The buyer will be in a better position to analyze the risks involved and make an educated choice after seeing this certificate.

SANCTIONED PLANS:

One must collect the floor plans of the floor where the proposed apartment or unit is situated and determine whether or not they are authorized by the authorities. In addition, we recommend that the prospective buyer examine the drawings for the podium and confirm that the parking spots offered by the promoter are authorized and approved by the appropriate authorities. In order to have a comprehensive understanding of the whole project, including the authorized construction of common spaces and common facilities, it is essential to examine the approved layout plan of the entire property on which buildings will be erected. One might also attempt to determine if the structure is being constructed in accordance with the approved designs. Additionally, one must examine the commencement certificate issued by the planning authority and the endorsements made thereon to ensure that the promoter constructing the building has been granted permission to construct the new building at least up to the floor where the proposed flat/unit is located.

RERA CERTIFICATE OF REGISTRATION FOR THE PROJECT:

After the Real Estate (Regulation and Development) Act of 2016 went into effect, every under-construction project must be registered with the Real Estate Regulatory Authority of the relevant state (RERA). Several papers and details/information about the under-construction project must be supplied and uploaded to RERA by the promoter throughout the registration process. RERA gives a registration certificate to the promoter including, among other things, the registration number of the project and the date up to which registration is effective, i.e. the date by which the project must be finished in all respects. The promoter is obligated to periodically update the information posted on the RERA website for the relevant project. The aforementioned RERA registration certificate and details/documents should be reviewed by the purchaser of a flat in a project that is still under construction in order to evaluate the project and promoter team's promises at the time of marketing and selling.

CONTRACT OF SALE:

In accordance with the regulations of RERA, an Agreement for Sale (AFS) must be completed and registered with all allottees prior to taking more than 10% of the total purchase price for a flat.

The purchaser must request that the AFS draught be completed.

Among the essential topics addressed in the AFS are:

THE PLAN UNDER WHICH THE PROMOTER WILL DEVELOP LAND;

The duties that must be met by the promoter, such as building and rehabilitation of tenants/slum dwellers, and the promoter's corresponding right to sell units in the selling components of the project;

THE COMPLETE CONSIDERATION AND PAYMENT PHASES;

Other fees must be paid by the purchaser, such as clubhouse fees, construction fees, and legal fees, in addition to the purchase price of the proposed apartment;

Commitment to the establishment of a housing society;

Commitment to the transfer of land and structures.