Documents to Check Before Buying Property

When buying immovable properties, it is crucial to pay attention to several additional factors.

Mother Deed and Sale Deed:

The mother deed contains all details of the property ownership from the first owner to the current owner.

The sale deed transfers ownership with the consent of both parties and is registered at the sub-registrar's office. It is the legal document that records the transfer of title, rights, and ownership from the seller to the buyer.

In case of lost documents, the buyer can identify ownership details from the seller's previous documents. With a lawyer's help, one can verify that there are no encumbrances.

The previous document should have clear legal ownership transfers acknowledged by a court, government, or recognized institution.

The current owner, or seller, should be verified through a continuous sequence of legal transactions over the last 30 years.

If 30-year documentation is unavailable, the buyer should file a police complaint and publish a notice in newspapers, stating the lost documents and allowing time for any claims. If no claims arise, the property can be considered legally clear.

Encumbrance Certificate (EC):

This certificate confirms that the property is free from any monetary or legal liabilities. It is a crucial document for obtaining a bank loan.

The EC contains details of all transactions related to the property, helping to verify clear ownership.

Buyers should obtain this document, which can be computerized and accessed with the registration year and deed number. It can also be applied for in person using Form 22.

Legal Scrutiny Report:

Obtain a legal report from a lawyer specializing in real estate. If taking a loan, the bank’s legal representative will review the documents.

It is advisable to get a private legal report to ensure the property is free from legal issues.

Tax Receipts:

There are two types of taxes: revenue tax for land and property tax for houses and apartments. Revenue tax is paid to the revenue department, and property tax is paid to the Greater Chennai Corporation (GCC).

The developer/owner must pay revenue tax for apartments. After construction, the tax assessment officer will evaluate the tax, which must then be paid.

Verify tax receipts to ensure all taxes have been paid without arrears.

What to Check Before Buying a Residential Plot:

Layout Types/Plot Categories:

Plots can be approved or unapproved. Combined plots are called layouts.

Approved layouts have CMDA approval for sale and construction.

Approved layouts include designated areas for parks, roads, and open space reserves (OSR), which are handed over to the corporation via gift deeds. Unapproved layouts are considered irregular plots.

Avoid buying unapproved plots as they pose significant risks. Future constructions on these plots may lack proper infrastructure and approvals, making it difficult to get water or electricity connections.

Patta:

A patta is a legal document obtained from the Tehsildar's office in the name of the rightful owner of the land. It is a crucial record for claiming land ownership and is necessary for any land transaction.

The patta includes details like district, taluk, village name, patta number, owner’s name, survey number, subdivision, type of land (wet or dry), area, and tax details.

After property registration, the patta is automatically transferred to the new owner.

For apartments, multiple owners will share a joint patta as the land is shared.

Importance of Personal Inspection:

After verifying the mother deed, EC, and tax receipts, it is essential to inspect the property in person. Layouts or apartments should be CMDA-approved, as panchayat approvals are not adequate.

Due to common discrepancies in land measurement, it is advisable for the buyer to measure the land. “Corner plots may have parts taken for road construction, which buyers might not know if they do not inspect the land initially,” says Ramanujam.

Considerations Before Buying a House or Apartment:

Building Plan Approval:

In Chennai, the Greater Chennai Corporation (GCC) can approve buildings up to two floors (ground floor and first floor). For more than two floors, CMDA approval is required.

Developers must start construction only after obtaining building plan approval from the approving authority.

The Tamil Nadu Real Estate Regulatory Authority (TN RERA) Act, effective since 2017, mandates that properties with more than six units or over 500 square meters must be registered with TN RERA.

Details about the building plan, current status, and construction start date can be verified online.

If construction cannot proceed as planned, TN RERA can authorize another builder to complete the project.

For individual houses, approval documents can be obtained from the owner and verified by a lawyer.

For properties with less than six units or below 500 square meters, buyers should obtain building plan approval from the seller and verify it with a lawyer.

No Plan Deviations:

Buyers should compare the building plan document with the actual construction to check for any deviations. If deviations exist, they should be approved by CMDA through a revised plan.

The structural stability report ensures the strength and longevity of the building. For new apartments, the CMDA-approved building plan includes this information.

When buying an old property, it is advisable to get an engineer to assess the building and provide a structural stability report.

Completion Certificate:

The CMDA provides a completion certificate for buildings meeting standards like rainwater harvesting and sewage treatment (if over 500 square feet).

This certificate is mandatory to obtain government services like water and electricity connections.

Joint Development Agreement (JDA):

Many apartments in the city are built under a joint development agreement between the landowner and the developer.

The landowner provides the land, and the developer builds the apartment, allocating a certain number of units to the landowner.

Buyers should check all documents, including the mother deed, before proceeding with a JDA property.

Note that developers cannot legally charge buyers for parking space in JDA properties, although many do.

Undivided Share (UDS):

UDS refers to the ratio of the apartment area to the total land area. The combined UDS of all apartments should equal the total land area.

Buyers should verify the UDS before purchasing an apartment. In case of redevelopment, this measure determines compensation.

Handling Delays:

Construction projects in Chennai often face delays, but the Real Estate Regulatory and Development Act empowers buyers.

According to TN RERA rules, buyers can claim compensation for delays or take legal action against the builder.

The law specifies that if a developer fails to complete construction on time, buyers can claim compensation for rental costs.

If there are issues with land ownership, the developer must compensate the buyer accordingly.