Buying property in India is a significant investment, and while the market offers many opportunities, it can also be fraught with scams and legal issues. To protect yourself from potential fraud or legal complications, it’s crucial to stay informed and take precautionary steps throughout the property-buying process. Here are some key tips to avoid common scams or legal problems when purchasing property in India:
1. Verify Property Title and Ownership
- Check the title deed: Ensure that the seller has a clear, marketable title to the property. The seller should have the right to sell the property, and there should be no encumbrances, loans, or disputes attached to the title.
- Get a lawyer’s opinion: Consult a qualified real estate lawyer to conduct a thorough verification of the property’s title and check for any legal disputes or ownership issues.
- Ensure the property is free from litigation: Verify that the property is not involved in any ongoing legal cases or disputes. This includes disputes over land use, inheritance, or encroachments.
2. Check the Property’s Approved Layout and Plan
- Verify building approvals: Ensure that the property, especially if it’s an apartment or commercial unit, has received all necessary approvals from local authorities (like the municipal corporation, development authorities, etc.). This includes the building plan approval, occupation certificate (OC), and completion certificate (CC).
- Ensure compliance with zoning laws: The property must comply with local zoning laws. Ensure the property is legally zoned for its intended use (residential, commercial, etc.).
3. Investigate the Seller’s Credentials
- Seller’s identity verification: Confirm the seller’s identity and ensure they are the rightful owner or authorized representative. Verify their identity by checking their Aadhar card, PAN card, or passport.
- Check for power of attorney: If the seller is acting through a power of attorney (POA), ensure the POA is registered with the sub-registrar and is legally valid.
4. Scrutinize the Sale Agreement
- Read the sale deed carefully: The sale agreement should clearly outline the sale price, terms of payment, handover dates, and possession details. Ensure that all verbal commitments are included in writing.
- Cross-check the details: Verify that the details on the sale deed, such as the property’s description, seller’s information, and the agreed-upon price, match the original documents.
- Stamp duty and registration: Ensure the sale deed is properly executed with the payment of applicable stamp duty and is registered with the sub-registrar office to make the transfer legally binding.
5. Be Cautious of Unregistered Transactions
- Avoid verbal agreements or unregistered documents: Never rely on verbal agreements or deals that are not backed by legally binding, registered documents. Unregistered agreements may not hold up in court if a dispute arises.
- Beware of token advances: Be cautious when making token advances before a proper agreement is drafted and the property documents are verified.
6. Ensure Property is Free from Encumbrances
- Obtain an encumbrance certificate: This document proves that the property is free of loans or legal claims. You can obtain the encumbrance certificate from the local sub-registrar’s office. It’s essential to check for any existing mortgages, debts, or claims before proceeding with the purchase.
- Check property dues: Verify that all utility bills, including electricity, water, and property taxes, are paid up to date. Unpaid dues can become your responsibility after the property transfer.
7. Confirm the Land Use and Building Approvals
- Land title verification: For agricultural land or plots, check whether the property has been converted for non-agricultural use, especially if you’re buying land for residential or commercial purposes.
- Building permissions: If buying a flat or a property in a building, confirm that the building has all required permissions, such as building approval, occupation certificate (OC), and completion certificate (CC) from the local authorities. Without these, the building may not be legally recognized for habitation or sale.
8. Beware of Fake Property Listings
- Check property listings carefully: Be cautious of online property listings that seem too good to be true. Scammers often post fake listings to attract potential buyers and may require advance payment for properties that don’t exist or aren’t actually for sale.
- Verify with trusted sources: Always verify property listings with legitimate sources, such as well-established real estate agents, property consultants, or by visiting the property in person.
9. Ensure Proper Due Diligence for New Projects
- Verify developer credentials: Before purchasing property in a new development or under-construction project, check the developer’s reputation, financial stability, and past projects. Ensure the developer is registered with the Real Estate Regulatory Authority (RERA), which provides a mechanism for addressing grievances and ensures transparency in transactions.
- RERA registration: Check that the builder has registered the project under RERA, which ensures that the project meets all regulatory requirements and timelines.
- Completion timelines and penalties: Ensure that the developer has provided clear timelines for completion, along with penalties for delays, as stipulated by RERA.
10. Beware of Double Selling or Undivided Share Issues
- Avoid properties with undivided shares: When purchasing property in a building or a complex, ensure you are acquiring the undivided share (UDS) of land and not just a flat or unit. Some builders may try to sell the UDS to multiple buyers.
- Check for double-selling: Ensure the property is not being sold to multiple buyers. This can happen if the seller is involved in fraudulent practices or if the property has unclear ownership.
11. Don’t Skip the Property Verification Process
- Verify property documents: Always verify the original property documents (sale deed, title deed, agreement to sell, etc.) with the help of a lawyer before finalizing the purchase. Any discrepancy in documents can lead to legal complications later.
- Property history check: Get a complete history of the property, including ownership records, past transactions, and the legitimacy of all previous sales.
12. Understand Your Rights and Duties as a Buyer
- Know your rights: Be aware of your rights as a property buyer, such as the right to possession once full payment is made and the right to a transparent transaction under RERA.
- Understand tax liabilities: Be clear about your liabilities for property taxes, stamp duty, and registration charges. Make sure the seller has cleared any outstanding property taxes or dues before you complete the purchase.
Conclusion
Buying property in India requires caution, diligence, and careful legal verification to avoid scams and potential legal issues. By following these tips and consulting legal experts or real estate professionals, you can minimize your risk and ensure that your property purchase is smooth, secure, and free from complications. Always prioritize conducting due diligence, obtaining legal advice, and ensuring transparency in the transaction.