Guide to Buying a Property in Bangalore from a Legal Perspective
This a guest post from Mr. Satish of dbs Legal Solutions in Bangalore.
“BE DELIGENT BEFORE BECOMING A LITIGANT”
Once you decide to buy your dream house or any commercial property, there are many documents you need to look into thoroughly before closing the deal. If you ignore this, you may be in for an enduring trouble.
People in the real estate business narrate many such stories from their vast experience. However, they also add that after the technological improvements brought about by successive governments in the registration process (the encumbrance certificate will have the photographs and thumb impressions of the sellers and the buyers each time the property changes hands), such experiences are on the ebb. Yet, some gullible persons could fall prey to the machinations of others, they point out.
If you are the kind of person who hates to encounter unsavoury incidents and loves to lead a peaceful life, the advice from experts is to verify or scrutinise documents in the initial stages itself.
It is always advisable that property buyers must insist on seeing the original documents of the house before making the advance payment. It is prudent on your part to make a huge advance payment only when you are satisfied with the authenticity of the documents. Once you make a hefty payment while signing the sale agreement and later encounter problems, you and your family may feel insecure till you get back the amount.
Eventually, he will return your money. Suppose, if he returns that money in instalments, then your plans of buying another property will go awry. Hence, ensure that all the documents are in order.
One of my client narrates the experience of his friend who had made a hefty advance payment while signing the sale agreement. He says his friend, who had full trust in his real estate agent, paid Rs.5 lakh as advance amount to a person who claimed to be the rightful owner of a property.
“The person came in a swanky car along with the agent and said that he is the owner of the property. My clients friend believed them and made the payment. After a few days, when my clients friend insisted on registering the property, both started acting smart. First, the agent said the person is not in station. Later, on one pretext or the other, both kept on postponing the process. Finally, my clients friend had to lodge a police complaint. The police had to trace the two persons and then recover the amount,” he explains. His advice: always approach the rightful owner of the property.
One of my client, a real estate agent, has an interesting story. A person who had two wives built two houses in different localities. Before his death, he had taken care to register the houses in their names separately. However, the documents of both the houses remained with the first wife. After his death, the second wife’s children tried to sell the house but in vain.
They obtained a copy of the document by claiming that the original was lost. Even then, when they attempted to dispose of the property, they could not do so as the first wife’s children always came in the way. The contention of the second wife’s children was that they had a share in the property. “Many buyers rejected the offer as they perceived it to be an insecure investment,” he says. He says that he takes extra care while dealing with an inherited property. He ensures that all the members of the family are present while signing the agreement and at the time of registration.
“A lot can happen between the time of signing the sale agreement and actual registration,” . Some peeved family members may not turn up at the time of registration or create a scene for a higher share, says that in his eagerness to help an aged person, he lost a few thousand rupees. “The person had bought the property in 1967. He wanted to sell the property and told me to look for a buyer.
He said that due to some personal problems he had not paid the property tax for a couple of years. He told me to pay the tax so that I can take it back once the property is sold. On the day of registration, another person showed up claiming that the property belongs to him too. The deal fell through. Later, the old man returned the customer’s money but I could not recover my money,” he said that in one deal, he had to obtain the signature of 17 persons. “Among them four were in the U.S.,” he chuckles.
All of them say that if anyone has an iota of doubt on the documents they are dealing with, they should release an advertisement in a newspaper.
It should be stated in it that they are interested in buying a particular property and if any other person had a claim on the property he/she should bring it to the notice of the advertiser.
Verify/scrutinise documents in the initial stages itself
Pay advance only after seeing the original documents.
Have them scrutinised by an advocate.
Always ensure that you are dealing with the right owner.
Have all the members of family of the owner present during registration.
Have a peace of mind to enjoy your property.
The improving infrastructure, the leading IT hub and the commercial advancements in Bangalore have made it witness a real boost in the real estate sector. The strategic location and the developing road map have seen a clear rise in the demand of purchase, selling and reselling of properties time and again. This adds to the complexity of the matter as you have to doubly ensure that you are not investing your lifetime savings into a fraudulent property. To prevent yourself from getting duped you can always take the help of a professionally qualified solicitor to get all your legal paperwork verified. For this reason, if you are planning to buy a property in Bangalore then refer to the below mentioned checklist, which should definitely come handy so that you can acquire a clear title. The paperwork required for authentication of the title varies from property to property and the region it falls in. The checklist needs to be verified before purchasing any property. Do not forget that the original documents of title like sale deed, partition deed, gift deed and will etc., are to be verified on a mandatory basis.
Purchasing a Flat/an Apartment in Bangalore
As the real estate market in Bangalore has become all the more dynamic due to the purchase, sale and resale of flats/apartments, it becomes all the more crucial for the buyer to handle the entire procedure very carefully. If you aspire to own a flat or an apartment in Bangalore and wondering where to start from then have a look at the following checklist and the information you must possess from the developer/promoter before you seal the purchase.
I. Purchasing a Residential Flat/Apartments:
Mother deed/ Sale deed: This is the most important document for tracing the ownership of the land. It gives details of the property as to how it was acquired at the initial stage and the subsequent series of transactions it has undergone. You should also check for the original sale agreement showing the builder/developer duly registered.
Khata certificate & up-to-date tax paid receipts: In case of a joint venture, the Khata should be in the landowner’s name. If you purchase the property directly from the developer the Khata should be in the name of the developer/promoter.
Joint Development Agreement: The agreement should be examined thoroughly if it’s a joint development. You must clearly understand the ratio at which the build-up area is divided between the promoter and the landowner.
Encumbrance Certificate: A latest Encumbrance certificate having the details of last 30 years should be checked. It can be obtained from the sub registrar.
Approved Plan: Check for a copy of the approved building plan by the respective government authority and also for the portion of the apartment being purchased.
Sanction Plan: Verify whether the building plan of the apartment is sanctioned and also check the validity of the sanction plan. You must also check the commencement certificate and take a confirmation from the Municipal authorities if the building adheres to the norms of the laws.
NOCs: You should obtain NOCs under the provisions of Income-Tax Act and Urban Land Ceiling and Regulation Act if required.
Occupancy certificate: This is issued to the developer by the apartment corporation/BDA/CMC. A buyer should insist for this.
Besides the above steps to be followed you should also ensure that the developer has obtained approvals from the Municipal Corporation, Electricity Boards, Area Development Authorities and Water Supply and Sewage Boards. It is advisable for the apartment owners to file a joint declaration under Karnataka Apartment Ownership Act, 1972, get duly registered and attain the rights and legal safeguards.
II. Purchasing a Commercial Flat:
Purchasing a flat in Bangalore for commercial purpose also includes more or less the same steps as in the case of a residential flat like deeds for absolute sale and conveyance. These offer a record for absolute and exclusive property rights of the commercial flat, confirms the usage rights, amenities and infrastructure.
Karnataka Ownership Flats (Regulations of the Promotion of Construction, Sale, Management and Transfer) Act, 1962 governs all the matters related to both residential and commercial flats.
Purchase of agricultural land in Bangalore
If you intend to purchase any agricultural land in Bangalore for non agricultural purpose then you must have the approval as per the provisions and rules under Karnataka Land Reforms Act (1961) and the Karnataka Land Revenue Act of 1964. The regulating authority for approving any layouts on the outskirts on Bangalore rests with the Bangalore Metropolitan Regional development Authority or BMRDA.
Before investing in any agricultural land you must adhere to the checklist which follows:
Mother deed/ Sale deed: This is the most important document for tracing the ownership of the land. It gives details of the property as to how it was acquired at the initial stage and the subsequent series of transactions it has undergone.
Search Report: It provides details of the original property holder, property history, charges on the property, current property status (all dues paid or still pending) and the number of times the property has changed hands before being owned by the present seller. Your advocate will fetch you all these details and confirm whether it is a legitimate property for sale or not.
Agreement: Once the property is decided, make an advance payment and get a written agreement on a stamp paper duly signed by both the owner and the buyer in the presence of two witnesses. An agreement must state: the advance paid, actual price, duration of actual sale, and legal actions to be taken in case of a default from either party.
Stamp Duty: This should be paid in full and on a timely basis. To get an agreement stamped it should be without any signature or date and the agreement can be implemented only when the Stamp Office fixes stamps on it.
Registration: Get the deed registration done in a sub registrar office within the timeframe mentioned in the agreement. For registering a property you need: house tax/property receipts, original title deed, and previous deeds etc., two witnesses are also required at the time of registration.
Apart from the above measures to be followed you should also get hold of an Akarbandi, an Encumberance certificate, Saguvali chit, Conversion order, Payment Challan, Up-to-date Tax-paid receipts, Land Acquisition Status, Mutation Extracts, NIL Tenancy Certificate/ Form No. 7 Endorsement, Podi Extracts, RTC (Record of Rights)/ Phani, Section 79A & B endorsement U/KLR Act, 1961, Patta Book, and Tippani. You should also have the family tree of the vendor, the comprehensive development plan or CDP and a Zonal recognition map to aid you. Another important thing to be remembered is that the property should not be located in the Green Belt Area.
Purchasing Revenue Land in Bangalore
Purchase of Converted Revenue Lands requires the following documents- Conversion Order from the Deputy Commissioner, receipt for the paid conversion amount, RTCs for last 30 years issued by the village accountant, documents of ownership, Mutation Register Extracts, Akarbandi/Tippani/Podi Extracts, Tax paid receipts, boundary map, village map, Nil tenancy certificate, approved layout plan, Khata certificate issued by Revenue authority, Encumbrance certificate, Zonal regulation map, power of attorney (if any) and an evidence from the respective authority that no acquisition proceedings exist.
Purchasing BDA (Bangalore Development Authority) Sites
The various documents necessary for purchasing a BDA property are- allotment letter, receipts of payment for the site, possession certificate, absolute sale deed, khata certificate from BDA, khata certificate (to be obtained from Bangalore Mahanagar Palika if the property falls under the corporation revenue jurisdiction), up-to-date income tax paid receipts, tax paid receipts from Bangalore Mahanagar Palika, Encumbrance certificate (from allotment till possession date) and a re-allotment letter or re-conveyance deed in case the property is re-conveyed by the BDA.
It is highly suggested that acquiring a property through Power of Attorney should be avoided to prevent any litigation in the future. Documentation is the major step in the acquisition of an immovable property of any kind so utmost care should be taken while carrying out all the paperwork. All the agreements should be stamped according to Karnataka Stamp Act, 1957 following all the rules therein.
This article aims at providing information for benefit of ApnaComplex customers and blog readers. The author of this article, Mr. D B Satish is from DBS Legal Solutions and specializes in Property related matters. You can contact at the address below: Contact dbs Legal Solutions – “We are your Voice in Legal Matters”