Home is a place where a person gets a sense of security for oneself and one's family. People often spend their entire lifetime's savings and take up additional liability of home loans for purchase of a house and to ensure that there is no threat to the solace and security of the house one should be aware and diligent of certain aspects while purchasing a house.

  • Due Diligence

In purchasing a property, a thorough due diligence should be carried out prior to investment. In doing so one explores and finds out: (i) the seller's rights in the property, (ii) the nature of the property – freehold or leasehold, (iii) whether there are any charges / mortgages or any litigation pending in respect of the property etc. and the due diligence process ensures that any undesirable surprises are kept at bay.

  • RERA Records

With the advent of the Real Estate (Regulation and Development) Act, 2016 ("RERA"), all new projects are required to be registered with the RERA Authority established for the State. Pursuant to RERA builders / developers are required to disclose project related documents including title, plans, permissions, pending litigations, rights of the developer, number of flats / units sold, stage of constructions, the proposed completion date etc. Therefore, if a residential property is being purchased in a new project, the first thing one must do is visit the RERA registration page in respect of the project and ascertain as many details about the project therefrom. In addition to this, the offices of Sub-Registrar in many States also provide an Encumbrance Certificates, which records details of the documents registered in relation to a property. Review of these gives a fair idea of any title related matters.

  • Precautions to be taken if property is being purchased from an individual:

If you are purchasing a property from an individual, who is claiming rights though a person who has died, then it is advisable to first obtain the family tree of the person in whose favour the property belonged and ascertain who his heirs are and whether the seller is actually entitled to sell the property or not. If the person has died leaving a Will, then whether such Will is probated by the court having competent jurisdiction or not. If there is no Will, then his heirs would have a right in the property and no single person, in his individual capacity will be able to sell the entire property without the other heirs agreeing to such sale.

  • Society and Government Dues:

If the property is a flat, located in a Society, then the society's records including whether its dues have been paid or not, share certificates are in place and duly updated, the age of the building and its structural stability etc. should be ascertained. This can be ascertained by obtaining a certificate or letter from the Society or as a part of the NoC of Society. It is equally important to ascertain whether all property taxes have been paid by the seller or not.

  • Looking for a home loan? Ensure the below mentioned:

If the buyer intends to take a home loan, then it should be ascertained whether the project (in case of new development) is approved by any particular bank. Disbursal process is smoother if the project is already approved by a bank. Also, once the loan is availed, purchaser/borrower may consider obtaining additional life insurance at least for the amount of loan so that in an unfortunate event of demise of the bread earner of the family who is responsible for the loan repayment, the survivors are not burdened with the loan and the family can use the claim amount for repayment of the loan and securing the house for themselves.

While the aforesaid can be taken care of by the buyers by themselves, there are multiple other aspects that may need consideration and it is always advisable to seek a professional service of a real estate advocate while purchasing a house who in addition to the aforesaid aspects, could also advise on the draft of the document and the requirements of any additional NoC from authorities (depending on the location of property), stamp duty, registration, taxation etc..

Originally Published by MoneyControl

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.