DOCUMENTS TO BE CHECKED BEFORE BUYING HOME: AN OVERVIEW PURCHASING A PROPERTY:

PRE-REQUISITES Real Estate Laws in India are governed by both State-specific laws and Central laws.
This is because, according to the Constitution of India, ‘Land’ falls under the State List while ‘Transfer
of property and registration of deeds and documents’ falls under the Concurrent List. Due to this, the
process of buying and registering a property can seem complicated. The Real Estate (Regulation and
Development) Act, 2016, and the Real Estate Regulatory Authority or RERA governs the
development, marketing, and sale of real estate projects.1 It was established with the aim to protect
the interests of the consumers in the real estate sector. It established a mechanism for speedy
dispute redressal through the Real Estate Regulatory Authority and the Appellate Tribunal.2 It also
mandates the compulsory registration of projects and key players in the real estate sector. Indian real
estate law does not envisage a system of land registration. Rather, the concept of registration is
related to the documents under which the title is transferred from buyer to seller. Any instruments
and documents relating to land are required to be registered in accordance with the Registration Act,
19083 . The system of registration of documents is well defined in India with robust government
machinery that registers and maintains these documents. The Indian Stamp Act, 1899 governs the
payment of stamp duty relating to land4 . It forms a major component of costs involved in property
registration and is to be paid to the state governments by the buyer. Since it is collected by the state
government, the rates vary from state to state. The other act that comes into play in buying and
selling of property is the Transfer of Property Act, 1882. As per the Transfer of Property Act, a ‘sale’ is
the transfer of ownership in exchange for a price paid or promised or a price part-paid and part-
promised5 . In the case of tangible immovable property, the transfer can only be made by registered
documents, as enumerated in the Registration Act, 1908 which is mentioned above.6 Under Section
55 of the Act, the seller has a duty to disclose to the buyer any material defect in the property or in
the seller’s title of which the seller is, and the buyer is not aware and which the buyer could not, with
reasonable care, discover. Misrepresentation gives the buyer the right to compensation or 1 The Real
Estate (Regulation and Development) Act, 2016, No. 16, Acts of Parliament, 2016 (India). 2 Pratik
Balasaria, Real Estate laws in India: Everything you need to know, PS GROUP (Last accessed
November 13, 2022). 3 The Registration Act, 1908, No. 16, Acts of Parliament, 1908 (India). 4 The
Indian Stamp Act, 1899, No. 2, Acts of Parliament, 1899 (India). 5 The Transfer of Property Act, 1882,
No. 4, Acts of Parliament, 1882 (India). 6 Legal Documents to Check Before Buying Property,
VakilSearch, (Last accessed November 13, 2022). indemnity from the seller. Though the seller
discloses all information about the property as well as his title, the buyer should exercise due
diligence and check the title of the seller. LEGAL ASPECTS TO CONSIDER BEFORE BUYING A PROPERTY
In India, buying property is a particularly demanding task with several possible hurdles along the way
such as inexperienced brokers, title defects, complicated tenancy laws, the condition of the property
itself, and financing, to name just a few. It is therefore important that the entire procedure is dealt
with systematically to reduce the hassles that accompany it7 . The exact laws governing the sale of
the property might be slightly different in different states, but there are a few permissions and
documents a builder or promoter must have if they are selling flats. Following are the legal
documents that one should check when buying a flat from a builder: 1. Title Deed: 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., 2. Completion/Occupancy
Certificate: A Completion Certificate (CC) is issued by municipal authorities on the completion of the
project. This document is required for receiving loans from banks and for applying for water and
electricity connections. ) A completion certificate means the completion certificate, or such other
certificate, by whatever name called, issued by the competent authority certifying that the real
estate project has been developed according to the sanctioned plan, layout plan and specifications,
as approved by the competent authority under the local laws. 8 3. Occupancy Certificate: OC is
issued by a local government agency once a project is completed and is deemed fit for occupancy,
meaning that it has been built in accordance with the applicable 7 Legal Documents to Check Before
Buying Property, LEGODESK (Last accessed on November 14, 2022). 8 The Real Estate (Regulation and
Development) Act, 2016, § 2(q), No. 16, Acts of Parliament, 2016 (India). codes. This document is
required for receiving loans from banks and for applying for water and electricity connections.
Occupancy certificate means the occupancy certificate, or such other certificate, by whatever name
called, issued by the competent authority permitting occupation of any building, as provided under
local laws, which has provision for civic infrastructure such as water, sanitation and electricity. 9 4.
Building Plan: A building or site plan contains a blueprint of the project with the layout of the
housing spaces and utilities. Due diligence must be done by the buyer to ensure that the plan has
been fully approved by the local municipal authority. As per the Real Estate (Regulation and
Development) Act, 2016, sanctioned plan means the site plan, building plan, service plan, parking
and circulation plan, landscape plan, layout plan, zoning plan and such other plan and includes
structural designs, if applicable, permissions such as environment permission and such other
permissions, which are approved by the competent authority prior to start of a real estate project. 10
5. Encumbrance Certificate: Encumbrance certificate can be obtained from the sub-registrar’s office
where the property is registered. It mentions that the property has no current monetary and legal
liabilities. It is important to verify that there are no dues on the property (such as property or other
taxes, electricity bills, and water bills), that the legal ownership is in the name of the seller, and that
they are authorized to sell you the property. An encumbrance certificate contains details of all
transactions done on the specific property. Encumbrance Certificate can be obtained from the
subregistrar’s office where the deed has been registered.11 It is advisable to apply for an
Encumbrance Certificate from the date of purchase till date. 6. No objection certificate can be
obtained from society, even though it is not legally required. 7. Patta / Khatha / Mutation: Mutation
is the change of title ownership from one person to another when the property is sold or
transferred.12 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 9 The Real Estate
(Regulation and Development) Act, 2016, § 2(zf), No. 16, Acts of Parliament, 2016 (India). 10 The
Real Estate (Regulation and Development) Act, 2016, § 2(zq), No. 16, Acts of Parliament, 2016 (India).
11 Sreekanth Reddy, Checklist of Important Property Documents in India | Legal Checklist for
Property Purchase, RELAKHS (Jan 20, 2020) (Last accessed Nov 14, 2022). 12 Important Documents
To Check Before Home Buying, THE PROPERTIST (Oct 07, 022) (Last accessed Nov 14, 2022). owner
details updated in the revenue records maintained by civic bodies like Municipalities, Panchayats or
Municipal Corporations.13 CONCLUSION All of these documents are essential components in the
chain of documentation required to purchase a home. If any of these documents are missing or the
seller is unable to present them, it is recommended that one should not purchase the apartment
since they may have issues selling the property. If the property is eligible to get an approval from
RERA then one can try checking with the builder for a copy of the RERA approval order for the
concerned project. Owning a house is often a dream for many. Buying a property, wherever it may
be, is a long-drawn-out process. There are several hurdles that prospective homeowners need to
cross, including having to deal with brokers, tenancy laws and even property conditions, not to
mention financing. Every document and procedure should be double-checked as even the slightest of
errors can put you in trouble. The only way is to be extra cautious with the papers that you have to
submit. Therefore, the entire onus lies on the purchaser in verifying the title, ownership and
possession of the property. 13 Sreekanth Reddy, Checklist of Important Property Documents in India
| Legal Checklist for Property Purchase, RELAKHS (Jan 20, 2020) (Last accessed Nov 14, 2022).