Buying a property (home/plot/flat) is one of the most important decisions that you will ever make. It involves a lot of money and is a serious money decision. It is an emotional one too!
Whether you are a first-time property buyer or an experienced owner, buying a real estate property in India is not an easy task. It requires good amount of homework from your side and you need to verify a lot of important property documents.
While requirements may vary depending on your state, there are a few general and important documents that you’ll definitely need to make a property purchase decision.
Checklist of Important Property documents
Below are the most important property documents for buying a property in India;
- Title Deed
- Encumbrance Certificate
- Patta / Khatha / Mutation (Certificate / Extract)
- Property Tax Receipts
- Layout Map / Location Map
- Conversion Order
- Building Sanction Plan
- Occupancy Certificate
Verifying the title of the seller is a very important and first task in your search for a property. Title is the legal way of saying you own a right to something. For real estate purposes, Title refers to ownership of the property, meaning that you have the rights to use that property. Deeds, on the other hand, are actually the legal documents that transfer title from one person to another.
Title deeds are paper documents showing the chain of ownership for land and property. The seller or owner of the property may have acquired his/her title either by purchase, inheritance, partition, by way of Gift, by settlement etc., So, the different types of Title Deeds can be namely – Sale deed / Purchase Deed, Deed of Partition, Gift Deed, Settlement Deed, Release deed etc.,
- If you are planning to buy a property from a seller who inherited this property from his parents then you need to check for ‘entries in Revenue records’ (local civic body offices like municipality, panchayat or corporation) and predecessor’s title.
- In case, the seller had purchased the property from a previous owner then you need to verify the Title through a Sale deed.
- In case, the current owner has received the property as a gift from his parents then you can ask for a Gift Deed.
If there were multiple transactions happened on the concerned property then you need to check all the Link Deeds and Mother Deed as well. Mother Deed, otherwise known as parent document, acts as the main document for proving ownership of the property. For tracing the ownership of a property, you need to begin the process with inspection of the earliest document i.e., Mother deed and then all the link deeds till the latest Sale deed (which is in the name of current seller/owner).
(Related article : ‘Types of Title Deeds |5 ways of transferring your Immovable (or) Real Estate Property‘)
Encumbrance Certificate (EC)
One of the important property documents that you need to apply and verify is ‘Encumbrance Certificate’ or popularly known as the EC.
The dictionary meaning of the word encumbrance is, ‘a claim on property or assets’ or ‘a mortgage’. An encumbrance is a legal claim on a property that affects the owner’s ability to transfer the ownership of the property. Encumbrance means whether the properties have any lien on them, whether attached by the court, whether mortgaged or sold etc. by the owner of the said properties.
An encumbrance certificate is evidence that the property in question is free from any monetary and legal liabilities. An encumbrance certificate contains details of all transactions done on the specific property.
For example – If the property in question has a home loan on it then you can find this information when you take EC. If the current owner has acquired the property through a Gift Deed, you can verify these details in EC.
Encumbrance Certificate can be obtained from the sub-registrar’s office where the deed has been registered. (In some of the States an EC can be obtained online too). It is advisable to apply for Encumbrance Certificate from date of purchase till date.
Important details that you need to check in EC statement
I have downloaded an online EC statement for one of my properties located in Andhra Pradesh. This property has been gifted to me by my Grandmother. Here, you can notice that the ‘Gift deed’ transaction details have been captured and recorded in EC.
Once you get the EC for the property, it is advisable to cross-check or verify some of the important details as below. Kindly note that EC format can vary from State to State, but the basic details may remain the same. (You may click on the image to open it in a new browser window.)
- You can get to know who has applied for the EC statement. If you have applied for it, you will find your name here.
- The property details that you have provided in the Form 22 (EC application form) will be mentioned here.
- You can notice the number of years for which the EC has been sought. I have searched for the encumbrances for the last 33 years.
- EC will give you the complete property description as recorded in the Sale Deeds which are registered and recorded in the books of Sub-Registrar office.
- You can get to know how many transactions have been done on the said property. The transactions are listed in a chronological order (date-wise). In this example, there were two transactions done. (R, E & P stand for Registration Date, Executed on, Presented on respectively)
- In 1984, my grandmother bought this plot. In 2007, she has executed Gift Deed in my name. Like wise, if you are buying a property which has home loan on it (home loan taken by current owner), you can find ‘mortgage’ details instead of ‘gift settlement’ in this column. Another example can be – let’s say if partners of a firm mutually purchased the property and one of the partner wants to release his share from the property then in that case, Release Deed can be executed and registered. In this case, you can find ‘Release Deed’ details in EC.
- You can find the name(s) of the buyer and the seller (E – Executor/Seller & C – Claimant/Receiver/Buyer). If the property is a jointly held one, you can find multiple owners.
- If there are multiple transactions done, all of them will be inter-linked in the Registration Dept’s database. For example– the first transaction has a Registered document number as 44/1984 and the same is linked to the second transaction (Gift settlement). So, if you see these kind of links in your EC, you can request for the copies of all Link Documents (including the Mother Deed) from your Seller/Builder. In this way, you can establish the continuity of parent documents with child documents.
An encumbrance certificate is important not only while buying a property but also when you are applying for a home loan or going in for a loan against the property.
Patta / Khatha / Mutation (Certificate / Extract)
Mutation is the change of title ownership from one person to another when the property is sold or transferred. By mutating a property, the new owner gets the title of the property recorded on his/her name in the land revenue department and the government is able to charge property tax from the rightful owner.
One needs to get mutation done and get the new owner details updated in the revenue records maintained by civic bodies like Municipalities, Panchayats or Municipal Corporations.
(Kindly note that the registration of property and mutation of property are two different things. Mutation of property happens after the registration of property.)
In case of Agricultural lands, mutation is must. Without mutation, the land title will not pass to the new owner. Mutation should be entered in the revenue records. The owner’s name which is recorded in the revenue records is referred as ‘Pattadhar’.
In case of non-agricultural lands, failure to mutate does not take away your right in the sale deed. That is even though the mutation has not done, the purchaser’s title will not be affected. He/she will remain the owner of the property. But the only problem of not mutating is that you may not get electricity connection, water connection and you cannot pay municipal tax.
In case, the property you are going to purchase has been inherited or acquired by way of gift by the current owner then mutation certificate is an important document to ask for ;
Sample mutation certificate:
- Below is a sample Khata certificate issued by BBMP (Bruhat Bengaluru Mahanagara Palike) (Click on the image to open them in new browser window)
If you would like to check if a property has free title/ownership (or) whether it is mortgaged or not, you have to apply for Encumbrance Certificate. You can also cross-check these ownership details by taking a Mutation Extract.
(Mutation Extract is an extract from the mutation register maintained by the Village Panchayat Accountant or local civic body office. It records the transfer of land and the mode of such transfer, recommendations of the inquiry /Assessing Officer for such transfer, date of entry of transfer and the record of rights.)
Once your name is updated in the revenue records, you may apply for Patta extract or Khata Extract or mutation extract to verify the details. Below is a sample Khata or Mutation Extract (of a property located in Bengaluru, Karnataka).
Property Tax receipts
If the property has been mutated and recorded in the local revenue records then the current owner might be paying applicable property taxes, betterment charges etc., to the local civic body (municipality/panchayat/corporation). You can request for the last paid Tax receipt from the seller. Kindly make sure that there are no arrears and all tax dues (if any) till date of registration are cleared.
Layout Map/Location Map
If you are buying a property (plot/flat/home) in a layout, you can ask for a copy of approved layout plan of the entire project.
One of my friends has recently bought a vacant residential plot in a layout. He later came to know that this plot has been ear-marked for an open space (park) as per the layout plan. He has been requesting the builder to cancel the registration and refund the monies.
So, it is very important for you to check the entire layout map before buying a property.
Most of the properties in densely populated areas and in prime locations have become unaffordable to buy. Hence, we see that many real estate ventures come up in sub-urban areas. In most of these cases, the builders buy agricultural lands and then convert them into residential or commercial layouts.
Kindly note that the property owner must obtain legal permission or conversion order to change the use of land from agriculture to non-agriculture purpose.
Besides the conversion order, the builder should have got approval from the local competent authority as well. For example : Any layout on the outskirts of Bangalore requires the approval of Bangalore Metropolitan Regional Development Authority (BMRDA).
Building Sanction Plan (For flats/independent homes)
In case you are buying an under-construction flat or home, you need to check whether there is any building sanction plan or not. If it is available then it should have the seal /approval of local sanctioning authority (for ex: municipality office).
Upon the completion of the building construction, the builder or the developer of the apartment has to apply for the ‘building completion certificate’ with the local authorities (like BDA or BBMP in Bangalore or PMC in Pune).
If the building construction is completed as per the building approval plan and if it also meets other building standards like distance from road, height of the building, if rain water harvesting system is in place etc., the civic authorities will issue CC (in case of Apartments).
Besides CC, you need to know if the project has received all the required NoCs from all the concerned authorities (for example : Fire dept, Electricity dept, Airport authority, National Green Tribunal etc.,)
Occupancy Certificate (for Flats)
Once the builder receives the Completion Certificate, they have to obtain Occupation Certificate from the civic bodies.
OC certifies that the building has complied with all the required building standards, local laws and it is safe to occupy. Occupancy certificate is issued by local municipal authorities or building proposal department that provides no objection to occupy the building under reference for its specified use. The OC is issued only once the building has been completed in all respects and can be occupied.
The legal possession of the Flat by the Owner is valid only with the Occupancy Certificate.
When there are blocks or phases of large projects to be developed with varying completion dates, the concerned authority can grant a partial occupancy certificate for the completed phases/blocks. After the completion of entire project, Partial OCs are replaced by final OC (Consolidated document). Do note that it can be a tough task to get a home loan with a Partial OC.
My personal suggestion is not to buy a flat which does not have an occupancy certificate.
Other Revenue records (RR/RTC/IL)
The property that you are intending to buy is say a Revenue land, in Panchayat area or a converted land (agri to non-agri purpose) then it is prudent to check different land and revenue records as below ;
- Pahani (RTC) is a very important revenue record, as it contains details of land such as owners’ details, area, assessment, water rate, soil type, nature of possession of the Land, Liabilities, Tenancy and Crops grown, etc. RTC stands for Record of Rights, Tenancy and Crops (RTC).
- RR stands for Record of rights. Issued by Asst. Tahsildar, RR or Record of Rights contains the details of the property, owners of the property along with the nature of the possession (acquisition of land).
- IL stands for Index of Land. It contains details regarding the owners of the land and details about the land.
Important Documents Checklist when buying a Property in India
I have tried to list down the most important documents that you need to check when buying a property. The below list is based on the type of the property (Vacant plot/Flat/House).
Other Important Documents (or) points to ponder over when buying a property in India :
- Check the antecedents of the Seller(s) : We all verify title deeds and all connected documents before buying the property. But we fail to verify the antecedents of the Seller. It is better to verify the character and antecedents of the owner beforehand. If the seller(s) are habitual offenders and involved in the real-estate offences or other crimes, then it is better to drop the idea of buying the property from them not withstanding whether the title is perfect or not. If the seller has good background and his character and reputation are unquestionable, then the transaction will be very smooth.
- Property Inspection & Land surveying : Buyer beware is the golden mantra in the immovable property transactions. Therefore, the entire onus lies on the purchaser in verifying the title, ownership and possession of the property. You must take all reasonable steps to ensure that you are purchasing the property from a right person and also a right property. The most important precaution is undertaking a personal inspection of the property under the sale. You can inquire with the property neighbors (if available) regarding the ownership of the property, any disputes etc., You can also take the help of a local land surveyor to know the exact boundaries of the property.
- Ancestral/ Inherited Property : You need to be extra cautious if you are buying an ancestral property. You can ask for ‘Family Tree’ certificate issued by the revenue authorities from the seller. Request for Death certificate of previous owner(s) in case of inherited properties.
- RERA Approval : If the property is eligible to get an approval from RERA then you can try checking with the builder for a copy of the RERA approval order for the concerned project. (Read : ‘Real Estate Regulations & Development Act (RERA) | Key points & Review‘)
- GST Compliant : In case, you are buying an under-construction property, kindly check if the builder is GST compliant or not. If they charge GST on your payments then ideally they should issue the payment receipts with a valid GSTIN. (Read : ‘How to identify fake GST Bill?‘)
- Documents from Society/Housing Boards : In case, you are buying a property allotted by a Housing board/society (or) by a Development Authority then you can request for the Allotment Letter and NOCs from the concerned Society regarding ‘no dues’ and ‘transfer of share in the property’.
- Mortgaged Property : If the property has been mortgaged or there is a loan on it then the Seller has to arrange for the Release Deed (if loan is repaid) or NoC from the concerned bank/lender.
- Property Valuation : You can inquire about the prevailing property prices in and around the shortlisted property location. You can get this information from local Document Writers (at Sub-Registrar offices), local residents, Real-estate agents, property neighbors, authorized property valuers etc.,
- Minor as Seller : In order to sell property where the minor has a right, the seller (Minor’s guarding/parent) must seek permission of the court. Without such approval the sale can be challenged by the minor after becoming a major.
- Online Facilities : Most of the State Registration Departments are now offering online provisions where-in the citizens can apply and get the basic and most important property documents (like EC, Certified Copy of Deed, Search Report etc.,) online.
- In case, you are buying a large piece of land (especially in the outskirts of a city/town/village), kindly check with the local civic authorities whether the property in question is in Green belt (based on Zonal regulation map or CDP – City/town Development Plan). Also, check whether the property is not reserved/assigned for any specific caste(s).
- Last but not the least, hire a good legal consultant / Lawyer and get their legal opinion on the property.
Continue reading :
- All you need to know about Property Encumbrance Certificate (EC)
- Lost your Property Documents? How to apply for Certified Copy of lost Sale Deed?
- What is Mutation of Property? How to apply for Mutation of Property?
- Occupancy Certificate, Possession Certificate & Completion Certificate – Meaning & Importance
- What is an Ancestral Property? | Definition & Important Legal Rules
- How Home Buyers can file complaints against Real estate Builders online? | RERA Act
- Top & Best Home Insurance Plans – Details, Comparison & FAQs
(Kindly note that the above checklist is not an exhaustive one, there might be some documents specific to the legal scenario of the land you are purchasing / may vary from State to State. Kindly get an unbiased and thorough property evaluation done through a Civil lawyer/legal consultant/real-estate agent.)
(Image courtesy of solargaria at FreeDigitalPhotos.net) (Post published on : 06-March-2018)