Documents Required While Buying Property

We are presently Market Trends about prevalent rates of property in the vicinity and last known transactions.

Identify the property you wish to purchase.

Formulate commercial terms.

Distinguish between terms and conditions of the contract, which are negotiable, and those, which are fixed e.g. price, payment schedule, time of completion etc.

Ask for photocopies of the all deeds of title related to the property to be purchased.

Examine the deeds to establish the ownership of the property by seller, preferably through an advocate. Ascertain the survey number, village and registration district of the property as these details are required for registration of the sale. Previous encumbrances and loans, if any, on the property must be cleared before completion of purchase of the property. The title of the Vendor to the property must be clear and marketable.

Finalize commercial terms of purchase of the property. Ascertain transfer fees, stamp duty and registration charges to be paid on purchase of the property.

Ascertain outgoings to be paid for the property i.e. property tax, water and electricity charges, society charges, maintenance charges.

Request Vendor to obtain, if applicable, consent, permission, sanction, no objection certificate of various authorities such as the (a) society (b) the income tax authority (c) Municipal Corporation (d) the competent authority under the Urban Land Ceiling and Regulation Act (e) any other authority.

Will you require a loan for making payment of the consideration amount. Ask for a pre-approval letter from the lending institution.

Permanent Account Number of Vendor and Purchaser under Income Tax laws Payment of stamp duty on the formal agreement or document for transfer of the property, signing by both the Vendor and Purchaser and registration.

After payment of the entire sale price, take over legal possession of the property alongwith documents of title in original from the Vendor of the property.

Change name of the holder of the property to the purchaser in the records of the society, electricity Department, Municipal Corporation etc.

Stamp Duty:

Stamp Duty is a tax, similar to sales tax and income tax collected by the government, and must be paid in full and on time. A stamp duty paid instrument/document is considered a proper and legal instrument/document. The liability of paying stamp duty is that of the buyer unless there is an agreement to the contrary.

Market value of the property and is Stamp Duty payable on the market value:

Market value means the price at which a property could be bought in the open market on the date of execution of such instrument. The Stamp Duty is payable on the agreement value of the property or the market value, whichever is higher.

Formalities to be completed:

The formalities and forms may vary from State to State depending on where the property is situated.

Every State has its set forms under the Registration Rules that are required to be filled and filed along with and at the time of Registration of Sale Deed/Transfer Deed.

Under the provisions of the Income Tax Act and Rules for a transaction of sale, it is now compulsory for the Purchaser and Seller to give their Permanent Account Number and in the event of either the Seller and/ or the Purchaser would be required to fill Form 60 of the Income-Tax Rules.

In case of either the Purchaser or the Seller being a Non-Resident Indian, not assessed to tax in India, such a Party would be required to file Form 60 of the Income-Tax Rules.

Permission and papers that one should check with the builder when buying a flat in a building, which is under construction:

Approved plan of the  building along with the number of floors.

Whether the floor that  you are buying is approved.

Whether the land on  which the builder is building is his or he has undertaken an agreement      with a landlord. If so, check the title of the land ownership with the      help of an advocate.

The building byelaws   as applicable in that area and ensure that the builder is building without  any violation of front setback, side setbacks, height, etc.

Check if the specifications  given in the agreement to sell of the sale brochure match on the ground or  not?

Whether urban land  ceiling NOC (if applicable) has been obtained or not.

NOC from water,  electricity and lift authorities has been obtained.

Appropriate authority  for knowing the market value of the property:

The Sub-Registrar of      the area, in whose jurisdiction the property is located, is the      appropriate authority for knowing the market value of the property.

Within time period should an agreement/deed have to be registered?

The property agreement should be registered with the Sub-registrar of assurances under the provisions of the Indian Registration Act within four months of the date of its execution.

Completion of the sale:

The transfer of a flat is concluded when you have a sale deed/ agreement for sale coupled with actual possession. Generally, in all cases the entire amount is paid simultaneously with the handing over of physical possession and signing of the transfer documents.

Formalities by foreign citizens of Indian origin for purchasing residential immovable property in India under the general permission:

They are required to file a declaration in for IPI and with the central office of Reserve Bank at Mumbai within 90 days from the date of purchase of immovable property or final payment of purchase consideration, along with a certified copy of the document evidencing the transaction and the bank certificate regarding the consideration paid.

Precautions:

It was found that on the basis of advertisements issued in the newspapers or on the basis of brochures issued by the Builders and Developers copies of which are sent abroad, non–resident Indians used to purchase immovable property or flats. Subsequently, it was found that the Builders did not have a marketable title to the property and / or it was found that the plans were not approved by the Municipal authorities and / or the Builders do not have the necessary funds for making the construction, etc.

Some of the precautions that the purchaser has to take before buying the flat are:

He should see that the promoter has made full and true disclosure of the nature of the title of the land on which the flats are to be constructed.

He should see that an Attorney of Law or Advocate issues a proper certificate with a standing of not less than 3 years.

He should see that promoter has made full and true disclosure of all encumbrances on such land including the right title or interest, claim of any party on such land.

He should see that promoter has given plan and specification of the building built or to be built on the land. It should be ascertained that such a plan or specification has been approved by the local authority as per the provisions of the law for the time being in force.

He should see that the promoter has made disclosure as to the nature of fittings, amenities (including the provision for one or more lifts) that are to be provided.

He should call upon the promoter on reasonable notice if the promoter himself is the builder to disclose the description of the materials to be used in the construction of the building and, if the promoter is not himself the builder call upon him to disclose on such a notice the terms of agreement entered into by him with architect and contractor regarding the description or the material used in the construction of the building.

He should call upon the promoter to specify the date on which the possession of the flat is to be handed over.

He should call upon him to disclose the list of the members of the purchasers of the flat and the price charged for every flat and / or agreed to be charged.

He should call upon the promoter to state in writing the addresses, nature of the organisation of the persons to be constituted to which title is to be passed on. Such organisation may be a Co-operative Society or private limited company etc.

He should see that before taking possession the completion / the local authority as required has granted occupation certificate under the law.

He can call upon the promoter to make full and true disclosure of all out goings such as municipal and other local taxes, taxes on income, water charges, electrical charges etc.

The purchaser of the flat should call upon the promoter to make full and true disclosure of other information and documents in such a manner as may be prescribed under the law.

What if the documents submitted by the seller are incomplete?

In case required property documents are missing/in complete, seller would be responsible for procuring these documents & would be responsible to bear the expenses incurred in the process of procuring these documents. Sale deed registration process differs from state to state within the country.

Following are the few common steps that are followed at the time of sale deed registration:

Convenient date for registration will be fixed after checking with the seller & buyer / POA holder (in case if is it issued)

Coordination with the sub-registrar office in terms of the documentation requirement for registration, and intimation of the same to the seller and buyer or POA holder.

Registration time will also be checked and intimated to the seller / buyer or POA holder.

Registration cost - stamp duty, service tax, etc will be calculated well in advance and an equivalent draft / banker's cheque will be made ready. Mode of payment will be discussed and the payments have to made by the buyer / POA holder at the time of registration.

The above details are provided for the purpose of reference only. The process & requirements for registration are subjected to change in government policies.

The documents required at the time of registration & registration fees?

The list of document & fee required to complete the sale registration process differs from state to state and will vary based on the regulations issued from time to time. Registration fee too keeps varying from place to place and regulations issued from time to time from respective government authorities.

Buying with someone else:

You may choose to buy your property jointly with someone else, such as your husband, wife, civil partner, partner, relative or friend. If you buy your property with someone else, you can choose to do this in one of two ways, as either: beneficial joint tenants, or tenants in common. This is the case whether you own the freehold or leasehold of the property. If you are thinking about buying a property with someone else, you should get legal advice on the best type of ownership for you.

Beneficial joint tenants:

If you own your property as a beneficial joint tenant, this means that it belongs to you and the other owner(s) jointly. You can't re-mortgage or sell the property without the agreement of all the other owner(s). However if there is a dispute, an owner can apply for a court order.

As a beneficial joint tenant, you don't own specific shares in the property and you can't give away a share of the property in a will. If you die, your interest in the property passes automatically to the other owner(s).

Tenants in common:

If you own your property as tenants in common, this means that it belongs to you and the other owner(s)jointly, but that you all also own a specific share of its value. It is up to you to decide how much each share will be. You can give away, sell or mortgage your share. If you die, your share of the property does not pass automatically to the other owner(s). You can leave your share to whoever you like in your will.

For more information about owning your property jointly, see the Land Registry.

Final payment to the seller:

Normally the final payment to the seller is paid in the form of a draft at the sub-registrar's office at the time of registration. However, it also depends on the terms and conditions of the sale agreement between you and the seller.