In India 6 out of 10 pending court cases are related to property disputes. You can imagine the seriousness of problems related to property titles. Still less than 5% buyers take independent legal opinion before buying the property. Almost all of them rely on the opinion given by the empanelled lawyers of the bank, which gives them home loan. Is it safe to rely only on the legal opinion issued by the bank’s lawyer?
You should NOT rely only on the legal opinion issued by the bank’s lawyer. Reason being you do not know the credentials of the lawyer hired by the bank. With NPAs at historic highs & banks unable to answer the rationale behind assets quality & valuation you have every reason to doubt the credentials of people hired by the bank to perform due-diligence for your property. Worst part is the bank is not responsible if you find out any legal issues with the property later on. You still gotta pay EMI for the loan given to you by the bank.
Real Estate is the most expensive asset we ever buy & most of us buy it only once. So we should make sure that we buy a property with the right legal title i.e. free of any legal issues which can range from issues related to title to issues related to government agencies such as acquisition, approvals etc. Commoners don’t have required skills and capabilities to dig out necessary information to find out these complex legal issues. Hence we need the assistance of an able & experienced lawyer to validate the right title of the property.
Why an independent legal opinion is important & a must before you buy the property:
- Certify the title of property and / or identifies any defects in the title
- Verify the layout / building plan approval to identify whether the property has necessary approvals from the local civic agencies
- Identify whether the property is encumbered (mortgaged) or not
- Finds out any outstanding dues on the property such as property related taxes or payments to association etc
- Identify any third party claim on the property by publishing ads in local newspapers
- Finds out whether there are any ongoing court litigation related to the property
- Verify whether the property is under acquisition by any government agency
Benefits of hiring a good property lawyer is not just limited to above factors. It gives you peace of mind after acquiring the property. When we are ready to pay millions of rupees for buying our dream home we should not think twice before hiring a good lawyer by paying few thousands. Benefits of hiring a lawyer outweigh the cost of legal services by manifolds!