Documents to check before buying a flat

September 4, 2024

Introduction

Imagine moving into your dream flat, only to discover later there are outstanding dues on the property or legal disputes clouding the title. Often in the excitement of buying their dream house, people forget to verify or check documents before buying a flat. Another big mistake that people make is buying a flat or a house based on the face value of the seller or his reputation. Document verification is your shield against such nightmares. It ensures the property is clear of any encumbrances (financial or legal claims) and has all the necessary approvals, making your purchase legitimate and secure. However, people often aren’t aware of which documents they should check before buying a flat. Here is a comprehensive blog to protect you from common traps like hidden costs, missing documents, and vague explanations from the seller, and to educate you about the documents to check before buying a flat.

Essential Documents for Different Types of Purchases

The documents to check before buying a flat will vary slightly depending on whether you’re buying a ready-to-move-in flat, an under-construction flat, or a resale property. Here’s a breakdown:

Ready to Move In Flats:

Sale Deed: This document is the anchor of the transaction, transferring ownership rights from the seller to you. Verify this document carefully, especially details like property description, area, and any easements mentioned.
Mother Deed: This is the original ownership document of the land on which the building is constructed. It establishes the seller’s legal claim to the property. This piece of paper will help you understand whether the owner’s claims are true or not
Building Plan Approval: This ensures the building conforms to all sanctioned plans and safety regulations.
Occupancy Certificate (OC): This certificate is issued by the local municipal authority, indicating that the building has been inspected and deemed fit for occupancy. It confirms that the construction has been completed under the approved plan and local laws.
Completion Certificate (CC): This certificate is provided by the municipal authorities after verifying that the building adheres to the approved plan and has been constructed according to safety norms and regulations. It’s crucial to ensure that the project is legally fit for occupation.

Resale Flats:

Title Report: This document traces the ownership history of the property and reveals any legal disputes or barriers attached to it.
Encumbrance Certificate: Issued by the local registrar’s office, this confirms whether the property is free from any legal or financial claims like outstanding loans or mortgages.
Possession Certificate: This document verifies the seller’s right to occupy the flat and subsequently sell it to you.
Occupancy Certificate (OC): This certificate, issued by the local authority, confirms that the building complies with all legal and safety standards and is fit for occupancy.
Previous Ownership documents: This includes the mother deed, original sale deed and the payment receipts.
No Dues certificate: This should come from the society where the house is located.
Completion Certificate: This serves as a legal proof that the house has been constructed according to the approved plans.

Under-Construction Flats:

Title Deed: Verify the title deed to ensure the builder has clear ownership of the land. This document should be scrutinized for any disputes or claims.

Building Plan Approval: Ensure that the building plan has been approved by the local municipal authority, confirming that the construction is legal and follows all regulations.

No Objection Certificates (NOCs): These are required from lenders to ensure compliance with regulatory requirements.

Intimation of Disapproval (IOD): Issued by the local municipal authority, it is a list of conditions a builder has to fulfill to obtain subsequent approvals and begin construction.

Commencement Certificate: This certificate is issued by the local municipal authority, allowing the builder to begin construction. It confirms that all prerequisites for construction have been met.

RERA Registration: Check if the project is registered under the Real Estate Regulatory Authority (RERA). This provides transparency and assures that the project adheres to regulations.

Allotment Letter: This document is provided by the builder after the booking amount is paid and includes details like flat number, payment schedule, and extra charges.

Agreement for Sale Review this document for terms and conditions related to construction timelines, project specifications, and penalty clauses for delays.

Encumbrance Certificate: This certificate confirms that the property is free from any financial or legal liabilities, ensuring no pending loans or mortgages.

Land Ownership Agreement: If the builder does not own the land, verify the development agreement between the builder and the landowner.

Legal and Regulatory Documents

General:

No Objection Certificates (NOCs): Make sure to obtain NOCs from relevant authorities like the society, fire department, and electricity board. These ensure there are no outstanding dues or clearances needed before ownership transfer.
Property Tax Receipts: Verify that the seller has paid all property taxes up to date. Outstanding dues can become your liability after purchase.

Specific to Builders (Applicable to Ready-to-Move-in Flats):

Occupancy Certificate (OC): This crucial document is issued by the local municipal corporation which certifies that the building is structurally sound and meets all habitation standards. Without an OC, the flat is technically unfit for occupancy.
Completion Certificate: This is another important document to check before buying a flat which is issued by the builder, this confirms that the construction of the building is complete as per the approved plans.

Financial Documents

Loan Sanction Letter (If Applicable): If you’re financing the purchase with a home loan, ensure you have a sanction letter from the bank outlining the loan amount, interest rate, and repayment terms.
Payment Receipts: Maintain clear records of all payments made to the seller or builder, including receipts for booking amount, down payment, and any installments paid.
Maintenance Charge Receipts: For resale flats, ask for receipts of maintenance charges paid by the seller to the society. This ensures you’re not inheriting any outstanding dues.

By thoroughly checking these documents, you’ll be well on your way to a secure and happy homeownership journey. Remember, due diligence is key! Don’t hesitate to seek professional help from a lawyer or charted accountant if needed.

Property-Specific Checks

Builder Projects:

RERA Registration: The Real Estate (Regulation and Development) Act (RERA) is a game-changer for property buyers. By diligently conducting the following RERA-mandated checks, you can safeguard your investment and ensure a hassle-free property buying experience.

Essential RERA Checks

Project Registration: Verify that the project has been duly registered with the respective RERA authority. This confirms the project’s legality and adherence to RERA guidelines.
Builder’s Registration: Ensure the builder is registered with RERA. This is crucial as it indicates the builder’s compliance with regulatory standards and their commitment to consumer welfare.
Project Details: Scrutinize the project details as mentioned in the RERA registration, including carpet area, super built-up area, common areas, amenities, possession date, and other relevant information. Any discrepancies between the RERA-registered details and the builder’s claims should raise red flags.
Layout Plan and Carpet Area: Obtain and carefully examine the approved layout plan to understand the unit’s configuration, and dimensions, and share in common areas. Verify the carpet area as advertised against the RERA-registered carpet area.
Price Details: Ensure the project’s pricing is as per the RERA-mandated pricing structure. Scrutinize the breakdown of costs, including unit price, common area charges, car parking charges, and any other applicable fees.
Allotment Letter and Agreement of Sale: Thoroughly review the allotment letter and agreement of sale to understand the terms and conditions, payment schedule, possession timeline, penalty clauses, and dispute resolution mechanisms.
Bank Account Details: Verify that all project-related payments are made to the designated RERA-compliant bank account. This safeguards your investment by preventing funds from being misused.
Consumer Grievances: Check the RERA website for any complaints or disputes lodged against the builder. This information can provide valuable insights into the builder’s track record and reputation.
Site Visit and Construction Status: Visit the project site to assess the construction progress and verify its alignment with the RERA-approved plans.

Construction Agreements: Carefully review the construction agreement between the builder and the developer. This document outlines the specifications of the project, timelines for completion, and payment schedules. Ensure everything aligns with what was promised during the sale.

Resale Properties:

Chain of Ownership Documents: Trace the ownership history of the property by examining the chain of title documents. This includes sale deeds, inheritance certificates, or gift deeds. A complete chain will establish a clear lineage of ownership and reduce the risk of future disputes.

Agreement to Sell: This is a preliminary agreement between the buyer and seller outlining the sale price, payment terms, and possession date. Scrutinize it for any clauses that might disadvantage you, and ensure it complies with RERA regulations.

Innovative Angles and Gaps in Traditional Verification:

While documents are essential, a well-rounded approach goes beyond just paper. Consider these additional checks:

Physical Inspection: Nothing can beat a good old physical inspection of the property. Look for structural soundness, and any cracks or leakages, and ensure the overall condition matches the description.
Society/Resident Feedback: If it’s a flat in a housing society, talk to residents and the society committee. They can provide valuable insights about the builder’s reputation, maintenance quality, and any hidden issues within the community.
Locality Verification: Visit the surrounding area at different times of the day. Check for noise levels, traffic patterns, proximity to amenities, and any upcoming construction projects that might affect your living experience.

Checklist For Buying A Flat

Downloadable Document Checklists: Make informed decisions with downloadable checklists that provide a comprehensive list of documents to verify for both builder projects and resale properties. These can be easily found online or from realtor associations.
Templates for Legal Notices and Agreements: Having access to templates for legal notices (like delay in possession) or standard agreement formats can be helpful during the buying process. However, remember these are templates, and consulting a lawyer is crucial for any legal documents related to your property purchase.

Additional Considerations

Environmental Clearances: Ensure the property has the necessary environmental clearances, especially if it’s located in an industrial area or near a water body. Pollution or waste disposal issues can significantly impact your health and property value.
Locality and Infrastructure Checks: Research the surrounding infrastructure like schools, hospitals, public transport options, and proximity to essential amenities. Future development plans in the area can also influence property value and your living experience. Consider potential noise pollution or traffic congestion from upcoming projects.

Conclusion

By combining traditional document verification with these innovative approaches, you’ll be well-equipped to make an informed decision. Remember, buying a property is a significant investment, and taking the time for thorough due diligence can save you from financial and legal headaches in the future. Equipping yourself with knowledge is the key to a smooth and secure property purchase. This blog has covered the essential aspects of document verification, from understanding the difference between documents required for resale flat purchase and documents to check before buying a flat from a builder to exploring innovative tools and strategies.

Remember, a comprehensive Flat purchase checklist goes beyond just paperwork. Conduct thorough physical inspections, delve into the property’s history, and research the surrounding locality. Utilize downloadable resources and online portals, but never underestimate the importance of consulting a lawyer to ensure the validity of all house ownership documents. Don’t let the excitement cloud your judgment. Ask questions (no matter how small!) about things to check before buying a flat and what to check before buying a flat. A transparent and informed approach will safeguard your investment and pave the way for a happy homecoming.