Planning to buy a property? Well, get ready for a major paperwork as the process involves providing (to authorities and the bank in case you are taking a home loan) and acquiring several documents (this ensures your ownership over the property).
Homebuyers are often unaware of the documents involved in a resale property transaction. Further, misleading inputs from realtors, relatives and consultants may leave a buyer baffled. Legal Assure shares a document checklist to peruse before buying a resale property, and a list of documents that are often overlooked but shouldn’t be.
Benefits of Buying Resale Property
- Compared to buying a brand new piece of property, the resale market can offer dramatically cheaper rates
- There are no marketing extravaganzas and hidden features or costs in play. Whatever you see is what you get
What should one ensure while buying a resale property?
Experts recommend that prospective homebuyers should be well acquainted with certain procedures and norms while finalising their purchase decisions. All property buyers must cross-check the paperwork involved in the property buying process and ensure that the property has a clear title of ownership and has received all necessary government approvals.
What are the documents required for purchasing a resale property?
You need to have the entire chain of documents and agreements related to the property. You should also acquire and verify all other agreements and papers pertaining to the buying and selling of the flat till date. Here is the list of the documents that you need to check before purchasing a resale flat:
Title Report
You should ideally conduct a Title Search at the Registrar’s office in order to retrieve the chain of documents that reflect the history of the flat. Once done you will be provided with a written analysis of the flat in the form of the Title Report containing its description and other information related to its tax rate, title holder’s name, joint encumbrances along with details of property tax, liens, and mortgages associated with it.
NOC from Bank
It is vital to check if the flat is mortgaged against a loan. If there is any loan on the flat check its debt status. In order to ensure that all the pending dues have been paid back to the bank, ask the seller to get a No Dues Certificate from the concerned bank. This certificate assures that the bank has received all the dues from the seller and there are no more dues related to the flat and you can buy it without any worry.
Building Approval Certificate
An illegal construction can give you trouble later. Hence, you should verify whether the flat is built following a building plan approved by the local municipal authority or not. This plan will reflect the blueprint of the flat, its layout, utilities, and other equipment. If any extra unapproved construction has been carried out there is a risk that the flat can be demolished or declared unfit for occupancy in the long run.
Completion/Occupancy Certificate
The Completion Certificate is issued by the municipal authorities on the completion of a project and an Occupancy Certificate is issued by a local government agency after the project is declared suitable for occupancy. Thus, it is important to collect both documents in the previous owner’s name in order to verify that the flat is constructed following the approved plans and other legal guidelines of the authorities and is fit to be occupied. You will be asked to provide these at the time of its legal verification.
Encumbrance Certificate
Make sure to check the Encumbrance Certificate (EC) which ensures that the property has no dues, the title of the property is clear and marketable, and it is not partially sold to some other person. It will also inform you about the legal issues associated with the property or any other complaints. Moreover, all the transactions related to the flat that you are going to purchase will be displayed on this certificate.
Utility Bills
Checking the utility bills such as water bills, electricity bills, gas bills, etc. is an important part of property verification. It will let you know if all the bills have been paid on time or if there is anything that is yet to be paid. You should also make sure that the bills that the seller has produced against the flat is in the name of the owner.
Latest Tax Paid Receipts
You should check all the latest tax receipts before buying a resale flat. This will ensure that there are no outstanding dues attached to the property. This will also ensure that the previous owner had been paying the taxes on time and there is no involvement of any fraudulent activity.
No Objection Certificate (NOC)
Don’t make any payment towards the resale flat before checking the No Objection Certificates (NOCs) from the competent authorities. NOCs are given out by different establishments such as gas, water board, electricity, safety, sanitation, etc. A seller can’t legally sell a property without providing NOCs to the buyer. Hence, if the seller is not able to provide you NOCs for the flat, it will be wise not to buy it.
No Dues Certificate from Society
If you are buying a flat in a Co-operative Housing Society it is vital to get NOCs or No Dues Certificates from the society. These documents certify that the seller has abided by all the society rules and is not liable to pay any dues. You also need to procure letters from the society stating the year of construction of the building, the built-up area, and the number of floors and lifts. The NOC also signifies that the society has no objection to transfer the Share Certificate to the buyer.
Title Deed
Make sure to procure the original Title Deed of the flat which signifies the sale and transfer of property ownership from the seller to the buyer. It will contain the seller's name, details of the loans, if there are any, and other information pertaining to the property. This verifies that the flat has a marketable title and ensures that the seller has clear ownership of it. Once the title is transferred to your name make sure to collect the Immediate Title Deed as it will be the primary proof of your ownership.
Sale Deed
The Sale Deed is a document which acts as the chief proof of ownership for the sale of a property in the future. It must be registered in the Registrar's office after the purchase of the flat. It is the most important document that you have to acquire after the title of the flat is transferred to you by the seller in the form of Title Deed. It is essential to go through all the terms and conditions before signing this core legal document.
Possession Certificate
The certificate is required while purchasing a privately built resale flat. This document is handed over to the buyer after he/she has physical possession of the property. It is issued by the builder of a flat to its first owner. Hence, when you are buying a resale flat it is important that you obtain the possession paper from the seller. It will not be reissued to you at the time of selling the property, rather it will be handed over to you by the seller after you get the ownership in the form of Sale Deed.
Share Certificate
While buying a resale flat in a cooperative group housing society, you need to get it transferred to you by means of a new Share Certificate issued by the society. It will contain the name of all the previous owners. Thus, once you receive the Sale Deed, collect the original Share Certificate from the seller which has to be submitted to the Society along with a transfer form mutually signed by you and the seller. After you submit the document, a new Share Certificate will be issued to you by the Society entitling you as the new owner.
Which are the commonly overlooked documents while buying resale property?
- A homebuyer must check mutation deed and attain a copy of all previously registered agreements in case of resale property.
- Home loan clearance document must be verified. Another important document to cross check while buying a resale unit is the latest statement from the financial creditors, including banks.
- No objection certificates (NOCs) must be acquired from all respective departments such as electricity or water board.
- Possession certificate is issued by the builder to the first owner. You must also attain possession papers if you are planning to buy a resale unit. This document is not re-issued at the time of resale; however, the seller would hand over to the buyer.
- A conversion order is a certification acquired to change the property status from an agricultural land use to a residential use or commercial use. This document should also be verified to avoid any legal hassles in future.
- A share certificate is issued by the cooperative group housing society containing information about all the previous owners. When you buy a resale flat, make sure to collect the original share certificate from the seller along with the sale deed. This has to be submitted to the society along with a transfer form mutually signed by you and the seller. After you submit the document, a new share certificate will be issued to you, entitling you as the new owner.
FAQs on Documents to check before buying resale flat
It is not compulsory to get your name mutated while purchasing a residential resale flat. Since mutation is not the proof of ownership you can buy the flat without it. However, the mutation is important to get the property recorded in your name in the land revenue department. It is also required during the transfer of ownership from one individual to another during the sale/transfer of the property. Hence, you must get your name mutated in the revenue record within 6 months of the purchase.
Yes, you can apply for a home loan to buy a resale flat. Legal Assure offers a wide range of housing loans to cater to the varied needs of different sets of consumers. Our diversified portfolio of loan offerings includes loans for purchase of a new apartment from a developer or a development authority as well as for purchase of resale properties. Legal Assure provide home loans with speedy sanctions and transparent processes. Enjoy the lowest rates with minimum documentation and verification. You can easily avail home loans at affordable interest rates at Legal Assure.
Yes, it is very important to check all the latest tax paid receipts while you are purchasing a resale property. This will enable you to know whether the property has any outstanding dues or not. If there are any outstanding dues attached to the property you should at first, ask the seller to settle the dues before selling the property. You should also ensure that the seller doesn't have any other dues owed to the building or society.
To purchase a resale property, you need to present sale deed, building plan, completion/occupancy certificate, encumbrance certificate, and paid tax receipts, among others.
In case you are planning to buy a mortgaged flat at first ask the seller to obtain a release certificate from the bank stating that it is ready to provide the property documents to the buyer once the full payment of the loan is done. In this case, the seller must give an undertaking to the bank that he/she has agreed to give property documents to the buyer after closing the loan. Upon receiving the document, you can transfer the purchase money to the bank account of the seller either in cash or by means of a home loan. The bank will immediately release the original property documents together with a Non-Dues Certificate or NOC.
It is critical to verify whether the seller is the actual owner of the property before purchasing a resale flat. In the case of properties that have been sold and purchased multiple times, you should request a clear ownership history to confirm the seller's ownership. The administrative officer who registered the property can verify the authenticity of the documents. We can assist you with all aspects of your purchase/sale of a property – right from the drafting of the agreement to sell, up to the registration.
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