Legal checklist to follow before buying a property in India. Purchasing a property is one of the most significant investments one can make. However, to ensure a smooth and secure transaction, it is crucial to conduct thorough legal due diligence. A lack of proper verification can lead to complications, including disputes, fraud, or even the loss of the property.
1. Verify Property Title and Ownership
Ensure that the seller has a clear and marketable title to the property. The title should be free from disputes, encumbrances, or claims by third parties.
Key Documents to Check:
- Title deed (sale deed or gift deed)
- Mother deed (to trace the ownership history)
- Latest property tax receipts
Tip: Get the title verified by a legal expert to avoid future conflicts.
2. Confirm Property Approvals
Verify that the legal checklist before buying a property with all legal and regulatory requirements. This includes approvals from local municipal authorities and development corporations.
Key Approvals to Check:
- Building plan approval
- Land-use conversion certificate (for agricultural land converted to residential or commercial use)
- Environmental clearance (for large projects)
Tip: Cross-check approvals with the local authority to confirm their authenticity.
3. Check Encumbrance Certificate
An encumbrance certificate (EC) provides proof that the property is free from legal liabilities such as mortgages, loans, or other claims.
How to Obtain:
- Apply for the EC at the sub-registrar’s office where the property is registered.
- Verify details for at least 13-15 years (or longer if required).
4. Validate RERA Registration
Under the Real Estate (Regulation and Development) Act, 2016 (RERA), all developers must register their projects.
What to Check:
- Verify the project’s RERA registration number on the respective state RERA website.
- Review project details, such as timelines, legal disputes, and amenities.
Tip: Avoid properties that are not RERA-registered, as they may not meet legal requirements.
5. Confirm Land Use and Zoning Compliance
Ensure the property adheres to the zoning regulations established by the local planning authority.
Key Points to Check:
- Residential land cannot be used for commercial purposes without approval.
- Verify that the land is not designated as forest land or under acquisition by the government.
6. Inspect Sale Agreement
The sale agreement is a crucial document outlining the terms and conditions of the sale.
What to Review:
- Total sale consideration and payment terms
- Penalty clauses for default by either party
- Possession timeline and delivery terms
Tip: Engage a legal professional to ensure the agreement protects your interests.
7. Verify Tax and Utility Payments
Check whether the property has pending dues related to property taxes, utility bills, or maintenance charges.
Documents to Request:
- Latest property tax receipt
- Utility bill payment receipts (electricity, water, etc.)
Tip: Non-payment of these dues can lead to legal and financial complications.
8. Validate Property Measurements and Boundaries
Ensure that the actual property dimensions match those specified in legal documents.
Steps to Take:
- Conduct a physical site inspection.
- Compare with the property layout and approved building plan.
Tip: Use a licensed surveyor to verify boundaries and avoid disputes.
9. Confirm Legal Status of Builder or Seller
For new properties, verify the builder’s credentials and track record. For resale properties, confirm the seller’s legal ownership and identity.
What to Check:
- Builder’s RERA registration and past project reviews
- Seller’s identity proof (Aadhar, PAN card)
10. Ensure Loan Eligibility and Legal Assistance
If you plan to finance the purchase, ensure the property is eligible for a loan. Banks often conduct their own legal verification, which can be an additional layer of security.
Tip: Seek legal assistance to guide you through complex documents and negotiations.