Looking to buy a house? Here’s a check-list of documents

Property purchases are fraught with risks and require you to exercise utmost caution. This is particularly because many of us put our life’s savings into buying that one dream home.

Going for a reputed builder can assuage many of your concerns on the authenticity of property documents, say experts. While this may entail a premium, it can be well worth it. Taking the trouble to make enquiries with people who have bought flats in other properties developed by the same builder can also help allay your concerns.

Here are a few basic checks that you can run when short-listing a property (flat or independent house).

The construction agreement and the sale deed for the UDS (undivided share in land) are the two basic documents that a property developer will provide to you as a buyer. This is the case in States such as Tamil Nadu and Karnataka. The construction agreement mentions the specifications of the flat and the rights and duties of both the seller and the buyer. The sale deed for the UDS entitles you to a share in the land (on which the building has been constructed) when you buy a flat. Both these documents have to be registered with the Sub-Registrar’s Office.

In many other States, on the other hand, there is no separate construction agreement. The builder provides you with a sale deed (agreement to sell) which contains both the construction and UDS details and has to be registered.

While these are the documents that establish your ownership over a flat or a house, they are by no means the only important documents related to property buying. Before you go on to the other documents, ensure that you are getting the right UDS as that affects the value of your flat. Check with the builder on how the UDS has been calculated.

The UDS is calculated as the proportionate share of your flat in the super built-up area of the property (the entire land on which the building has come up). Let’s take an example; say, the super built-up area of the property (the land on which the multi-storey building is built) is 4,000 sq ft.

Now, the building has four flats (including yours) each 1,000 sq ft, along with two more flats, each 500 sq ft. The UDS of the 1,000 sq ft flats will be 800 sq ft. For those with the 500 sq ft flat, the UDS will be 400 sq ft.

Sometimes, unscrupulous builders can give you less than the UDS that you are entitled to and retain some of it for themselves. This can, at a later date, give the builder the option to construct another floor (subsequent to a change in government norms on building) and apportion this UDS amongst the newly constructed flats.

Apart from the sale deed for the flat, here’s listing a few other documents that you must read through carefully.

One, always ask the property developer for all the original documents of title or what are known as the parent documents. This is to trace how the property title has devolved from the earlier owners to the present one. Also, check whether the title is clear or disputed.

For instance, the land on which the apartment building is being constructed could have originally belonged to someone who passed it on to his son who then sold it to the builder. So, the parent documents must include the sale deed in the name of the father, his death certificate, a legal heir certificate showing the son as the sole rightful owner of the property and the final sale deed in the name of the property developer.

Alternatively, if construction is being undertaken as a joint venture between the son (as the owner of the site) and the property developer, then the final sale deed will not be relevant.

Inspecting the original parent documents also serves another purpose. The fact that the builder has been able to produce all these documents means that the property is free from encumbrance and has not been mortgaged to anyone. This will ensure that you get clear ownership of your flat.

However, while any legal or financial claims on a property and whether they have been discharged can also be verified by asking the builder for what is called an encumbrance certificate (EC), that may not always suffice. This is because, as PT Asha, Partner, Sarvabhauman Associates, a legal firm in Chennai, points out, some mortgages in the old days were not registered. These will not get reflected in an EC and may create a problem later on.

Today, however, all mortgages are registered and will be reflected in the EC. The certificate can be obtained from the sub-registrar’s office where that property has been registered. Lawyers recommend that you go through an EC covering at least the last 30 years.

You also need to check whether the builder has all the necessary approvals for the project in place. You must ensure that the builder shows you the approved building plan (the one which has the seal of the corporation) and not just any plan, emphasises PT Asha.

Also, in case of joint property development (where a builder and the owner of a land site come together for a project), you must also check the Power of Attorney deed. This document lays out the extent of the authority granted by the owner to the builder for the purpose of developing the land. You need to check whether the owner has granted the builder the power to mortgage the property. This is because if the builder mortgages the property prior to your buying a flat then you too will be (as will the other flat owners) bound by that mortgage.

Additionally, in case of an independent house, you must also ask the seller for the permanent land register extract (patta) to check whether he actually owns the land on which the house has been built.

Finally, when you purchase an old flat or an independent house from someone (instead of a new one from a builder), you must also ask the seller for the latest property tax and water and electricity bill receipts. This can serve as an additional proof of ownership.

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