Home » News » Real Estate

Presents

Co-Sponsored by

In Association With

Source: Moneycontrol.com

How to do paperwork before property purchase

It must be noted that merely giving public notice and not receiving claims from any persons will not bind those who may be real claimant if they were not aware of the public notice. In case of dispute, such public notice will support the buyer’s contention that he is a bona fide purchaser for value without notice of such claim.

Kishor Pate
Amit Enterprises Housing

For the purchase or lease of real estate for self-occupation as a home or commercial premises, or as an investment, various factors need to be considered beyond the price and location. In the case of properties in new projects by reputed developers, there is no reason to be too stressed about this. However, it can and often does become necessary while purchasing a resale property. One of the most important aspects to verify is the title of such a property.

The title verification process should actually begin even before an actual check of documents. For instance, if a person or entity offers a property at a rate which is below the going market value, it is definitely a signal for caution. Owners of property with complicated or defective titles will attempt to pressurize interested parties to buy the asset at short notice by offering a very low price as enticement.

In all property transactions, it is essential to subject all related documents to rigorous scrutiny and verification by a qualified expert in order to ensure that the property has a clear and marketable title. To begin with, a prospective investor needs to establish whether the property on offer is leasehold or freehold, and whether it is fully or jointly owned. Next, the documents creating interest in the property – namely the title papers – must be reviewed.

Depending on the nature of the property or proposed transaction, these include the sale deed, lease deed, conveyance, development agreement and the documents establishing the chronological chain or ownership. The primary intention behind this search is to establish how the owner acquired the property and what kind of rights he or she has over it.

Other documents to be checked are the property card (if available), the 7/12 extract and the Index II. Further, a prospective investor needs to establish whether all the above documents are properly registered in government records, along with any encumbrances such as mortgage or pending litigation.

How a title search is conducted?

An advocate issues a Title Certificate after conducting a search on the title of the property that is intended for purchase. This search will encompass the chain of sale/conveyance agreement, property card, 7/12 extract, Index II and records in the sub registrar’s office. The title certificate states that the property is unencumbered and has a clear, marketable title.

Also to be included in a thorough title search are aspects indicating ‘right of adverse possession’, which means that any person physically holding the property without dispute from the true owner can claim the right of ownership. All this considered, it is advisable to conduct a 30-year title search, or at least a 12-year search.

Public Notice

Though it is not mandatory, there are sometimes reasons for doubt about a resale property or a piece of land with a long history of ownership. In such cases, the intending purchaser or his advocate often issues public notices in newspaper. The practice is to issue two public notices – one in English and the other in the local language of the state – stating that the purchaser or his client has agreed to purchase or negotiate for the purchase of a property from a named vendor. This invites counter-claims in the form of mortgage, charge, lease, lien, easement, gift, trust, etc. against the property to be notified to the buyer or his advocate within a specified time (normally 14 days) with supporting documents.

However, it must be noted that merely giving public notice and not receiving claims from any persons will not bind those who may be real claimant if they were not aware of the public notice. In case of dispute, such public notice will support the buyer’s contention that he is a bona fide purchaser for value without notice of such claim.

ADS BY GOOGLE

Ask the Experts

Get your Personal Finance queries answered

  • Q

    If I put Rs 2 lakh in PPF, how much tax rebate I will get?

    A

    As per the existing guidelines and rules a person cannot deposit more than 1.5 lacs in one PPF account. However you can deposit money in the...

  • Q

    Interest rates are going to go down. And all my fixed deposits will be maturing next year. I will have to renew my fixed deposits next year at lower rate of interest. What is the way out?

    A

    Interest rates keep fluctuating due to various micro- and macro- economic factors. There is never an ideal rate of interest. In a high inter...

  • Q

    I want to buy online term life insuance plan. Which is the best one? Should I go for single premium or regular premium policy?

    A

    Single premium term insurance policies don?t make much sense. Why pay such a large amount at one go when you have the option of paying in sm...

  • Q

    I want to invest some money with at least ten years view. I dont want share market risk. Can I invest in NSC? Is there any other investment option?

    A

    NSC or National Savings Certificate is a safe investment scheme offered by the Central Government. It is an ideal option for investors with ...

  • Q

    Is it a good idea to invest in asset allocation funds? if yes, please suggest some good fund to invest money. I am 35 years old and can invest Rs 10000 per month.

    A

    Asset Allocation Funds are for those investors who want to take an exposure into different asset classes but do not wish to create their own...

  • Q

    My CA says that I have to pay tax on interest accrued on my FD of Rs 20 lakh. I have submitted form 15H in all banks. Is it necessary to pay tax in this case?

    A

    In case of interest on fixed deposits which is taxable under the head ?Income from other Sources? a taxpayer has two choices. Either you can...

  • Q

    Please suggest a good investment option of land in South India. I want to buy a land parcel of around 2 acres.

    A

    If you take a look at the South Indian real estate market, Bangalore has emerged as a clear winner. Due to the strong presence of IT/ITeS an...

  • Q

    I want to invest Rs 20000 per month. I have identified Reliance Small Cap Fund and DSPBR Micro cap fund for investment. I can hold to investments for two years. Is it a good idea to invest in these schemes? How much returns I will be getting?

    A

    If you are an aggressive investor, you can consider investing in either of the 2 funds.DSPBR Micro Cap My suggestion is that if you are inve...

  • Q

    I want to save my money for retirment Please suggest a good insurance policy

    A

    For retirement it is advisable to use multiple investment instruments and not just life insurance policies. If you have 15 years or so for r...

  • Q

    IS IT a Good time to invest in GOLD ?

    A

    Currently the outlook for gold is bearish/negative. However if you are planning for a long-term investment in gold it is ideal to invest the...

  • Q

    I have retired from my job in November. I have got Rs 48 lakh from my employers, by way of epf, gratuity and other benefits. Should i invest in senior citizen scheme of LIC? How about pension plans from LIC?

    A

    1. You can invest Post office Senior Citizen Scheme. 2. You also should invest lumpsome in MIP in post office and get monthly interest. 3. K...

  • Q

    I want to save Rs 1 crore for my retirement when i turn 60. Now I am 42 years old and have fixed deposits worth Rs 18 lakh.What should I do to reach Rs 1 cr mark?

    A

    start investing a minimum 5000 per month in mutual fund and increase 10% to 20% every year....

  • Q

    I want to save on my utility bills and fuel expenses.Please suggest a good credit card for me.

    A

    Yes, you will be able to save on Utility bills and fuel expenses through the cash back schemes offered by some of the credit card companies....

  • Q

    Suggest couple of equity mutual funds for me. I am keen to invest Rs 25000 per month for next couple of years. I can remain invested for at least five years?

    A

    Asset Allocation Funds are for those investors who want to take an exposure into different asset classes but do not wish to create their own...

  • Q

    I am a senior citizen.I received interest of Rs .1,70,000/- on FD.I have duly filled 15G form.I have NO other source of income.Have I to pay Income tax on this interest or can it be excempted?

    A

    Sir, please note if you are less than 80 years but more than 60 years of age, your total income upto Rs 3,00,000 is exempt from tax, you are...

  • Q

    Please suggest a good money back policy for me. I am 27 years old and want to accumulate Rs 10lakh over 10 years.

    A

    If you are a fan of traditional money back policies, go in for the LIC New Money Back Policy of 20 or 25 years. I would suggest you go in fo...

  • Q

    I want to buy a life insurance for my brother Please suggest a good policy. He is 19 years old. he should get Rs 5 lakh when he turns 25 years.

    A

    Best to go in for a ULIP in case he is looking to grow the money also. Go in for a ULIP like HDFC Click 2 Invest which is very low on charge...

  • Q

    In 2013, I bought an Endowment policy from LIC. Premium for that is around 35K per year. Now i understand, this was a big mistake and i want to go for a term insurance policy. I have already paid two premiums in 2013 and 2014 and I want to make this policy paid-up. Can i pay one more premium this year and make that endowment policy paid-up ? Or is there any better alternative ? Please suggest.

    A

    Yes, you can convert to a paid-up policy after 3 years premiums have been paid. I would recommend that you surrender the plan and take back ...

  • Q

    Is zero depreciation cover a good option under auto insurance? I have plans to buy honda city in January

    A

    Zero depreciation is a good option to along with the standard car insurance plan. By paying a slightly increased premium you can ensure that...

  • Q

    I am 20 years old,I am getting 17+ % or returns from share in my portfolio consistently for the last 6 months.should i think about a career in stockbroking?

    A

    Its nice to note that your portfolio has been gaining such high returns, however it might be too early to take a call and make stockbroking ...

Explore Moneycontrol

Copyright © e-Eighteen.com Ltd. All rights reserved. Reproduction of news articles, photos, videos or any other content in whole or in part in any form or medium without express written permission of moneycontrol.com is prohibited.