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Real Estate is probably the most expensive asset we ever buy in our lifetime. For most of us we buy it once. However we seldom do our homework of property screening and take legal opinion before we buy the property. There are few critical documents we should review / get reviewed before we buy the property:

Property Records

  1. Sale deed: It is a legal registered agreement which acts as a proof of transfer of ownership from the seller to the buyer. It is governed by the Registration Act and is an important document for both the buyer / transferee and the seller / transferor. It has all the personal details of buyers and sellers including their names, addresses, location of the property, and the consideration paid for the property.
  2. Mother deed: This is a critical document when you are buying a land. It helps you to trace the origin of the property i.e. original / first owner of the land. Usually ownership of a land changes hands through multiple transactions. Hence, when purchasing a land, it is not only important to know the details about the previous land owner but also about all previous owners who can be traced back.
  3. Khata Certificate: Khata means “account”. Khata Extract is basically an assessment of property that specifies certain details such as the owner’s name, property dimensions, built up area and tax details.
  4. Khata Extract: A Khata Extract is an extract taken from the assessment register giving details of the property concerned, such as the name of the property, its size, the use to which it is put (commercial purpose, residential), and its annual value, fixed when it was last assessed.
  5. Encumbrance Certificate: Encumbrance Certificate is a certificate issued by the local sub-registrar stating whether there is any mortgage on the property and the name & details of individual or institution to whom the property is mortgaged to. It is issued by the same sub-registrar office where the property is registered.
  6. Conversion Documents: These documents declares the “conversion status” of the land, which can be agricultural or non-agricultural (residential, commercial or industrial). If the land was converted from agricultural use to non-agricultural use there would be supporting documents issued by the competent local revenue authorities.
  7. Property Tax Paid Receipts: All the property owners have to pay property taxes on a yearly basis. These tax paid receipts tell you whether the owner of the property has paid the mandatory taxes or not.

Building approval

  1. Building Plan: Whether you buy an individual house, villa or an apartment you must check the availability of building approval plan and verify it to your satisfaction. It is a certified copy of individual unit (apartment or villa) plans as well as blocks of apartments in case of multiple towers of high-rise structures. In some case there would a layout plan or master plan of the project.
  2. NOCs: There are several NOCs required for any project such as those from Airport Authority of India, Fire Department, Water & Sewage Board, Electricity Board etc. There may be more depending upon the city. But without these NOCs no project will be deemed legally fit for purchase.
  3. Commencement Certificate: This certificate is issued to the developer to start the construction of its project. However, in many cased developers start the construction without getting commencement certificate, just to save time & later pay penalty to get it. This is not a critical document but should be followed up with the developer in case you bought early when it was not available.
  4. Completion Certificate: Once the property either apartment or individual houses are constructed and ready for occupation the owner or the builder has to apply for completion certificate from the local planning authority. This is required to apply for Occupancy Certificate (OC).
  5. Occupancy Certificate: OC is issued by the local planning authority after due inspection of the constructed property. Post OC the buyer is allowed to occupy the premises for self use.

The above list of forms are only a selection of most critical documents required for property screening. Buyers are advised to take professional legal help from competent lawyers before they buy a property. You won’t regret spending on it!

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