Here I have some precautions for you which will help you before buying real estate

There is an old English proverb, "Precaution is better than cure", which would be most appropriate when buying an immovable property.*Although there are several laws in place that protect a purchaser of property, self-help is the best help and one must do due diligence before buying property.Although the below mentioned list of precautions to be taken are not exhaustive, some of the important aspects one must look at are briefly as follows, though they may vary case to case:

Clear title to a property is one of the most important factors to be considered before purchase. There are various means to investigate the title such as:
(i) by studying the documents of title to ensure that the owner has proper ownership to the property. The documents of title should be studied very carefully as any shortfall may lead to a defective title.*
(ii) taking inspection of the original title deeds.
(iii) taking search of the land records and the records of the Sub-Registrar.(iv) taking search of the records of the society where the property is in a society.
(v) issuing public notice in newspapers calling for claims in respect of the property.

Sanctioned plans and commencement certificate by the concerned authority (should be inspected, especially for buildings under construction.If the building is not built in accordance with sanctioned plans, the completion certificate will not be granted. For buildings that are complete, occupation certificate/completion certificate should be verified.
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NOC and DuesAlthough no-objection of a society is not required for sale as per the new model bye-laws, it is preferable to obtain such a noobjection as well as a no dues letter from the society if the premises are in a society.*In case the building is not conveyed to the society by the builder, then noobjection of the builder should be obtained. It should be verified that the seller has paid all his dues such as property tax, service-tax, VAT and other outgoings to the society or the builder, as the case may be.

 

One may investigate whether there are any proceedings against the seller under section 281 of the Income-tax Act, 1961. Further if the seller is a nonresident of India, TDS may be deductible from the consideration paid unless certificate for non-deduction or lower deduction is obtained from the concerned Income-tax officer.

 

Permitted user and RestrictionsThis aspect should be verified as well. For example, one should see whether the property is residential or commercial as per the Development Control Regulations. Other factors such as heritage rules, set-back for road widening may apply to certain buildings, which should also be considered.

 

DocumentationProper documentation should be put in place for purchase of the property. The sale document should be properly stamped and registered and the original title deeds should be taken by the purchaser from the seller.

 

The burden on the buyer is set to increase with the recent hike in the Ready Reckoner (RR) rates. The Maharashtra government is on its way to increase the ready reckoner rates for properties between 5% and 30%, depending on the size and location in Mumbai and the rest of Maharashtra.*The Ready Reckoner is used to calculate the market value of flats for stamp duty and registration charges, which are major sources of revenue for the government after sales tax and value-added tax.According to Adv. Vinod Sampat, this will also impact property transactions making them costlier. He says, 'Redevelopment projects will be more affected and this will also impact capital gains tax for developers. The developer will pass the burden of the price hike to the buyer.*The stamp duty and registration charges are also calculated on the basis of these rates. As a result, the buyer will have to shell out more when he makes a property purchase.' In the current situation, where the market activity is sluggish, this move is bound to affect sentiment.

 

With all the legal requirements and possible risks, it is advisable to use a real estate attorney as suggested by JR Ewing above. There are just to many risks associated with buying a property and due to the high investment value you do not want to end-up spending unplanned additional money or face losing the right to the property and end-up with a costly court case.

 

This is great information. I am currently in the process of buying my first house. I completely overlooked the clear title aspect research. I am so glad I saw this.