Do's & Don't
Do's & Don't
Buying immovable property in India is tangled up with complications because of a combination of factors. A scrupulous planning from the investment stage simply by itself could possibly (blank) eliminate hassles afterwards. Some top pre-requisites suggested below will hugely assist NRIs.
Before buying immovable property:
Scrutinize all original transaction paperwork. The title of the property could possibly be sole or perhaps joint ownership basis. In the event of any issue, a certified copy can always be obtained from local sub-registrar’s office on payment of a nominal fee.
Refer the actual paperwork to a lawyer or attorney who can certify that clear title can be passed on to the buyer.
Secure ‘No-encumbrance certificate” for the past 30 years to make sure that no mortgage loan is unpaid on the property to be invested in. This will additionally make it possible for the buyer make sure that the actual title belongs to the rightful owner who would like to sell it off.
In the case of sale made by a 3rd party viz., real estate promoter, check out whether he or she is the absolute owner or retains a registered power of attorney to sell the house and property. It is advisable to buy from a well established developer having a unblemished track record.
Seek the counsel of a registered valuer to make certain selling price quoted is appropriate market value.
Agreement and Registration:
An agreement on the selling price to be agreed upon and payment conditions. Payment must invariably include a clause about payment of last instalment upon possession as well as registration
Sale deed or even Agreement to sell must be executed by the seller and buyer. This should include things like full details and origin to the title to the property, correct identification to the property through adjoining survey numbers, payment terms and payments made to date and cheque/ draft references. Also ensure that the buyer-builder contracts are fair and donot contain clauses which can be violative of your legal rights and interests.
Buyer should make sure that their right is not negated within the sale deed by means of undertaking additional construction in breach of the Apartment Ownership Act in case the municipal bye-laws permit it down the road.
The stamp duty differs from one state to another in India. Double check that the applicable stamp duty is remitted. It is levied on the land value of the apartment and in some it is on the whole.
The seller on completion of the project must execute the transfer of title to the buyer by getting it registered with the local sub-registrar of properties under whose jurisdiction the propertyu is situated.
While buyer’s presence is not needed who can authorise his / her representative to execute the document, the seller ( this need not be the real estate promoter) must be present and transfer the title by signing the transfer deeds and all appropriate documents.
The sale deed prepared earlier is merely a preliminary agreement. Prior to registration, the final deed is prepared on stamp papers of correct value which is to be the current fee of stamp duty in the respective states. This set of documents should be executed by the seller.
Remember that under Section 230 A of the income Tax act, 1961 all sale deeds demonstrating the prescribed value and above should be cleared by the Income Tax officer. Only after that, the Registrar will register the property.
Regardless of the value shown in the document, the Sub-Registrar will assess the market value of the property and the stamp duly.
In the case of purchase of flats, proportionate share of the land where the apartments are constructed are registered.
The purchase price indicated by the promoter need to be firm. In case the promoter wishes for escalation, it should be done in compliance with the procedure followed by the Government undertakings and really should form part of the Agreement.
The Agreement must accompany plans, drawings as well as specifications of each item of work.
The Agreement should specify the completion date and the terms of compensation in case of delay in delivering possession of the flat.
In case of dispute with Seller or Builder:
Regardless of all efforts if a buyer gets tricked, a complaint may be lodged under the Consumer Protection act.1986, which is a Central Act. Representation can also be made to the Monopolies and Restrictive Trade Practices Commission ( MRTPC ) for issuing instructions for indulging in unfair trade practices.
A number of states and union territories have established consumer protection councils. The redress machinery, which is quasi-judicial, has also been set-up in a number of states.
There are many more clauses in the Buyer Seller Agreement, apart from the few mentioned above. I have known many people, who invest and buy property availing funds through banks and financial institutions. Believe me, it is a nightmare for these buyers when the developer delays projects for one reason or the other. Sometimes, the buyers are left with no option but to continue living on rented accommodation, also repaying the banks or the financial institution against the home loan. The buyers are left hanging mid way, at the mercy of the developer. This leads to a financial stress on the buyers and should be strictly avoided.
Make sure to read between the lines, it is mandatory for a developer to sign a Buyer Seller Agreement the moment he accepts payments against the property. As a buyer you hold a right to view or demand a copy of all the approvals /sanctions obtained by the developer for undertaking such a project. If you cannot understand the clauses and their hidden meanings, mentioned in a Buyer Seller Agreement, it is advisable to take a legal opinion to understand the agreement and have it explained to you.
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