Plugging loopholes in property transactions
The least one can do to safeguard the transaction from fly-by-night operators is by carrying a reality check on property documents, reports Archana Khatri.india Updated: Nov 18, 2007 21:22 IST
That real estate laws in India are complex is a widely known fact. But the extent of their complexity hits you only when you actually buy or sell property. It is only then that you find out that you can never have a 100 per cent foolproof title of any property you want to buy in the country.
So, the least one can do to safeguard the transaction from fly-by-night operators is by carrying a reality check on documents relating to buying/selling property. An extra effort will go a long way in saving you running from pillar to post in a never-ending legal battle.
Following is a checklist of important documents needed:
Agreement to Sell (ATS): This is the first step in the legal process of buying property. It needs to be ensured that right information is included in this document before one signs on the dotted line. An incomplete document may not fetch you recourse in case of a fraud. The agreement to sell needs to be registered on a stamp paper of at least Rs 100. In case the ATS is coupled with possession, it needs to be registered at the value mandated by the government. The document should not only bear the khata and the khasra number of the property one intends to buy, but should also mention the year when the property would be handed over for possession. It should also mention the landmarks on the east, west, north and south of the property.
Due Diligence: Carry out due diligence of the property on your own. You do not need to hire a lawyer for the job, unless the nature of the property deal runs into crores. Due diligence involves verifying all the documents with the tehsil under whose purview the property falls. In case the project is under construction or hasn’t started as yet, then you must verify the financial strength of the builder. Ensure that the title of the property is not disputed and that the project has received all the necessary approvals. Find out if the project has any restrictions on further construction or transfer of property. Ensure that the builder has received all the permissions that he has promised leading to the improvement of the site. Check on the location of the project, how accessible it is from the main road and availability of public transport.
Stamp Duty: Remember that stamp duty is always paid on the instrument, never on the transaction. Stamp duties are paid as per the laws mandated by the government of the state where the property exists.
Sale Deed: Remember to sign the sale deed, as it has to be executed by both the seller and the buyer. Both have to be present at the office of the Registrar of Assurances for signing.
Power of Attorney (POA): A POA should be authenticated by the registrar in the state where the property is located. It need not necessarily be registered, but it is better to get it done so as to avoid any future dispute.