ADVISE TO BUYERS OF PROPERTY IN INDIA

TIPS TO BUYERS Keeping in Mind the nature of complexity of issues involved with an immovable property. A certain protocol should always be followed before you actually buy it to determine every aspect and utilities of the same. A large number of issues are certain things which should never be ignored are mentioned below:

Determination of type of property: The Municipal Corporation divides every district in zonal category which is: residential, commercial, industrial, agricultural etc. There are certain restrictions or benefits of each type of property. Each district has

a) Residential: Plot or house or apartments falling under this cadre are demarcated areas which are permitted only for residential usages. You will never find a shop or a restaurant or factory in residential areas this is exceptional cases where this kind of activity is allowed with special permissions. Plots in residential areas have different FSI i.e. Floor Space Index compared to commercial plots. This often leads to difference of costs of residential lands and commercial lands even if they are geographically adjacent. b) Commercial: Plots or houses or constructed structures falling under this category have special permission by Municipal authorities for carrying out commercial activities in those premises. Which are further divided into different categories. Service and trading and different categories of uses. While sometimes this is predefined by authorities in some cases we can also request authorities for change of category as per bylaws of sanctioning authorities. Plots falling under this category can be exploited for a higher FSI by builders or developers as mentioned by Local authorities. c) Industrial: Lands, Plots or structures under this category are always found on the outskirts of the city while many cases there are areas which are clubbed and declared industrial zone even inside city premises, depending upon environmental pollution or noise levels consideration fixed by authorities. While each industrial plot or structure has special permission for certain activities, this should always be checked out by local authorities before further consideration. d) Agricultural: Agricultural lands spread across the countryside or outskirts or sub urban areas are of two types. Convertible and non convertible. While convertible lands can always be used for different purposes by taking permission of Land authorities. Sometimes zones are demarcated and termed as non convertible which are defined to be used only for agricultural purpose. e) Government Lands: This category of land can be found almost anywhere in prime locations in cities or sub urban areas. Local Bodies always acquire or reserve some lands, plots structures for further planning or development or issue to various other govt organizations for official usage or for social activities. Lands which are acquired by govt under land ceiling act now prevalent only in Maharashtra and west Bengal needs special permission from land ceiling authorities for transfer of rights or usage. Most of these huge masses of lands are converted by government by declaring Special Economic Zone (SEZ) or convert into residential zones at their discretion and planning. Government also converts these lands into leasehold lands, plots and structures which have rights of usage by common people. This type of lands can be transferred on lease of 33 years or 99 years etc and are called lease hold lands.

2) Title of the property: The term Title is the heading or the description of ownership of the property. We do find a number of times, a property is divided among brothers or partners or joint ventures of companies, even Government bodies. Special care has to be taken to ascertain all the persons or firm involved with the rights of ownership. Second step is assuring that even if this case occurs, then all the involved persons or firms or institutions are having a common conclusion and each one has his consent for sale of the same.

3) Type of ownership: Ownership is also of several kinds, leaseholder, freeholder Sub lease holder etc discussed above. This depends on the type of property which we have discussed above. Ownership type should be determined after you have cleared the concept regarding Title of the property.

4) Procession and Third Party interest: While determination of the property as freehold, leasehold and Title has been verified further the next step is to determine is type of procession with the property. Whether or not a third party has a procession with the property in or without the consent of the owner should be looked at. For e.g. a property may be clear titled and freehold but the owner has mortgaged the same or given any type of promissory note to anyone in which procession rights are held by another person temporarily might cause problems to you in future. While mortgage by banks and government agencies can be found out by Encumbrance certificates also known as Search report, which are issued by land record offices and sub registrars. Any local or unregistered mortgage cannot be found out by such reports. For this before buying or executing sale deed of any property a notice should be broadcasted in the local newspaper or national newspaper regarding your agreement with the owner and any claim for ownership or right with the property to be settled within a specified time limit say 15 days with the present owner and should be brought to your notice. If any claim after this kind of notices issued is brought to the attention of Land authorities or courts, you are legally on the safe side. Also, the stamp duty and registration fees payable to government and sub registrar should be taken into account and included in your budget before executing the sale deed.

5) Execution of sale deed and other formalities: Execution of sale deed and other formalities are normally carried out in two steps, first is Sale agreement or agreement to sale with the owner wit an initial token amount or percentage of the total fixed amount. And mention of the exact area and schedule of the property and under the right of ownership of the seller or available with land record departments. One should always ensure that a proper record is taken on the agreement about the payment made and the mode in which a payment is done and the terms and conditions to be fulfilled by the seller e.g. payment of all dues and taxes to authorities till the Date of execution of sale deed. During this period buyer should carry out all necessary inquires and confirm the required documents and procedures mentioned above to carry the registration of Sale deed or transfer deed. The registry of sale deed is executed at the sub registrar office where both parties are present personally or represented by authorized signatories or holder of power attorneys carry out the transfer process in presence of appointed lawyers by both the parties.

6) Post sale deed formalities: Buyer should always make sure that the registration of his sale deed is notified to various other land record offices and other concerned authorities like, municipal authorities for transfer of taxation and change of name in property card maintained by land record offices. Problems occur if this is not updated as there might be fear of nuisance use of documents where the name of previous owners is mentioned and not changed even after transfer of title.

Special cases of Builder & Developers: If the premises you are purchasing is newly constructed by any building or developing firm then kindly ensure that the building plan is sanctioned and executed as per the plan and has proper permission including yours is a legal premise and the builder has the proper right to execute the sale deed. Also, ensure before booking any kind of flats, bungalows, duplex etc in Townships that the total amount quoted by the builder for any premises always excludes the stamp duty, water meter, electricity meter and other amenities charges. Along with maintenance charges of the premise are also separate in most of the cases. Further all such amounts should be kept in mind and accommodated in your budget before you plan to book any premises before construction.

If you are planning to take a loan to purchase a flat or house, ensure you have a sanction letter in hand from the bank authorities mentioning the exact amount and mode of disbursement of loan amount to the builder from time to time during various construction stages. Also, remember that the interest charges levied on you are started to be calculated after first disbursement of amount to the builder.

Also, know beforehand as to how much time would be required for the construction and handing over of possession of the premise to you by the builder. Since, this is case specific and in some cases might take more than a year to handing over of possession. And in case you are on a loan it increases the cost incurred by you considerably.

During handing over of possession kindly check all the utilities and status of the premise built is according to the promises made by the builder in the initial brochure.

Also check the local authorities before booking of premises whether the ownership of land or construction rights are reserved with the builder or not. If not or partially then what shall be the future implication and possibilities.

Check the area handed over to you along with the schedule of property mentioned in the agreement; both should match or should be justified.

www.indianpropertygateway.com

About the Author

We are a team of organised professionals and consultants in Real Estate Business from the last 30 years. We are based in Central India and distinctively making a niche in every aspect of the real estate market. We are serving clients to find the best property available as per their criteria, also to get the best buyer for their property. Buyers, Sellers, Brokers, Developers, Tenants and Landlords can search and exchange information, even chat liv