To be a bonafide purchaser of immovable property, a purchaser has to prove that he had acted in a prudent manner prior to purchasing the immovable property and has paid the entire consideration, which was agreed upon, to the seller. In India, it is necessary to do a Property Title Verification before purchaseing. One must do it to verify that property to be purchased carries an impeccable title and is free from all kinds of charges. Considering the high property purchase budget, we suggest the propertypurchasers to get the property title search done by a qualified lawyer or expert.
What is a Title Search?
The title is a term that determines the ownership right of property and acts as evidence to claim the right over a property. It is presumed by creating relevant deeds and documents while transferring property.
The title verification is a crucial step to take before making any property-related transaction. Before digitization of land records, the property-related documentation was obtained from the public records that are maintained at the sub-registrar office, municipal corporation.
Various Aspects of Title Search
There are various aspects to title search and can be varied from one property to another property, i.e, ready to purchase, resale, under construction, redeveloped properties etc.
There are many acts which come into force while selling or purchase of the property such as, Registration Act, 1908 Transfer Of Property Act, 1882, and respective state laws (for example in Maharashtra, The Maharashtra Co-Op Society Act, 1960, Maharashtra Apartment Ownership Act, 1970) etc.
Personal Laws also come under action in the case of the death of the owner and succession of the property. Here the due diligence process and the documentation review gets complicated by oneself. A layman may not be conscious of all these laws. Also, a transaction which looks easy can be invalid in the eyes of the law.
It is common for a property purchaser doing a property title verification to take opinion from people with entrusted interest. However, it is important to note that the opinion is based on the documentation review and thorough review of law and relevant regulations. A purchaser’s erroneous decisions are a threat to the property owner.
Not everything that looks fair and simple is actually that way. It shall be reliable with someone who has experience. There are many things from which a lawyer can protect you when dealing with property-related transactions.
Purpose for Title Search and due diligence is to get an answer on the following questions
1) Is the seller the authorized owner to sell the property?
2) Does he or she have the rights to sell the property?
3) Is the property free from all kinds of charges?
4) What are the restrictions on the usage of the property?
Types of Title Search
Depending on the transaction type, the property and the participants’ objectives, we can divide a title search into two categories:
Full Search: A full search is mainly done while giving a title certificate of the property in cases of sale, resale, long-term lease transactions and for transactions which involve procurement of financing by mortgaging the property. In a full search, the search concerning the status of ownership of the property is mainly conducted for a period preceding thirty years or more years from the date on which the seller in question came to obtain the property.
Full Search: A full search is mainly done while giving a title certificate of the property in cases of sale, resale, long-term lease transactions and for transactions which involve procurement of financing by mortgaging the property. In a full search, the search concerning the status of ownership of the property is mainly conducted for a period preceding thirty years or more years from the date on which the seller in question came to obtain the property.
It also includes a broad search of all features relating to the history of that property. Those include the status of disputes, status of encumbrances, the status of compliance of such applicable regulations.
These details must be related to the property in question.
Limited Search for Title Verification before purchase:
A limited search is basically conducted in the transactions where the property is taken on lease for a short term which is mainly under 13 years. In such cases, the time span for which the preceding owner of the property is traced is mainly restricted to fifteen years or less than that from the date on which the present owner of the property came to obtain the property.
So, to avoid all these problems, conduct the property title verification before purchase the property.
Chain of documents needs to be verified before Title Verification
The following are the different documents that we need to check for property title verification.
Check for the Clear Title
Any property must have a clear title, without any dispute. When purchase a property, one should clearly mention the land title with the seller name as ‘ owner of the property’.
Check for mother document:
After checking the Seller’s Title deed, verify the mother document. It is the document that shows the origin of the title. This document shows the foremost or true owner from whom the power devolves to the seller.
Ask For Bank Approvals:
If the bank is funding you, your half of the job is already done. Banks assess the property before they accept your loan. Many banks give on-site offers for an apartment project. It clearly indicates that the bank legally checked the property and it has all approvals in place.
Encumbrance Certificate:
An encumbrance certificate is a document that indicates that a property is legally free of any mortgage or loan outstanding. It also mentions the name of the preceding property owner.
The document provides following details about Title Verification before purchase:
- the previous owner had mortgaged the property when purchase a resale property and
- he/she paid all the dues.
Check the Approved Plan With Actual Site:
When purchasing a resale property ask the previous owner for property tax slips. It provides us details like whether the colony or the area is regularized or illegal. It also shares whether the previous owner registered the land and if left any duties pending with the municipal authority.
Check Out Property Tax Slips:
When purchasing a resale property ask the previous owner for property tax slips. It provides us details like whether the colony or the area is regularized or illegal. It also shares whether the previous owner registered the land and if left any duties pending with the municipal authority.
Conclusion
This article sheds lights on the document review and Property Documents Verification process. We recommend the purchaser to approach a lawyer or a legal expert to get the documentation verified and take the property title report to avoid any kind of ownership issues in the future.
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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