Why Should You Verify Property Title Before Making a Purchase?

What Problems Can Occur Without Proper Property Title Verification? 

Purchase of a property without doing proper due diligence exposes the buyer to multiple risks. The buyer could unknowingly purchase a disputed property, or a property which is under litigation, subject to multiple claims, an inherited property or a property with defective documents.

Following are some issues which can occur:- 

• Property of seller has encumbrances 
• Claims from legal heir 
• Documents of previous ownership are missing 
• Title is broken 
• Pending litigation 
• Encumbrances/Liabilities on property 
• Specifications of property in documents are incorrect 

Some of the above issues may not be visible during discussions between seller and buyer. Such issues surface only when the property has been already registered at the buyers name, he has taken possession of the property or when he decides to sell/ mortgage the property.

With proper title checking done before buying a property, a buyer gets to know the property well and can take a knowledgeable decision. He is also aware of any legal risks that he may be subjected to on buying the property.

How Does a Property Lawyer Verify Property Ownership Documents? 

Usually a property lawyer conducts whatever title search is possible on the property. That means he reviews whatever documents are available on how the property has been transferred from person to person and whether the seller has marketable title to the property.

Following are some of the documents which are usually reviewed while conducting a title search on a property:

• Sale deed 
• Title deeds of prior sellers 
• Agreement to sell 
• Gift deed/partition/deed of transfer (if any) 
• Succession related documents (if any) 
• Mutation records 
• Property tax receipts 
• Encumbrance certificates 
• Approved layout/ building plan 
• etc. 

This would usually depend on the type of property, its location, its transfer history and documents available for review.

BK Singh Advocate helps buyers understand whether the documents are adequate for the intended transaction or would the transaction require any additional leg work.

Why Is Chain of Title Important in Property Transactions?

Chain of title refers to the history of transfers of title of real property. It can provide the chronological history of transfers of title to a particular property. For example, an unbroken chain of ownership will reveal how the present owner of a property gained an interest in that property.

If a property has had many past owners, it may be necessary to research previous deeds to ensure that past transfers were legal.

A break in the chain of title creates a cloud on title. An improper or missing document or transfer, or missing heir to the property could affect the buyer's title.

What Documents Should Buyers Check Before Purchasing Property? 

Title Due Diligence means verifying all documents related to Title, Possession, Construction and legality. One should always do a due diligence before paying or investing money.

Here’s a basic due diligence checklist: 

• Registration Deed 
• Seller’s Identity proofs 
• All title verifying documents from previous owner 
• Encumbrance Certificate (if any) 
• Property tax receipts 
• Documents related to Possession 
• Approved building plans. 
• Occupancy Certificate of the constructed building. 
• Loan closure documents if the property was mortgaged earlier.
• Sanctions/ approvals from concerned authority. 
• etc. 

There are lot more which can be included depending upon whether the property is Residential/commercial/agriculture, inherited or Under construction(housing project).

Why Does Property Title Verification Matter in Delhi NCR Property Transactions?

Real estate market in Delhi NCR is one of the busiest in India. Whether you want to buy residential plots/apartments, want to start a commercial establishment or want to buy property for investment purposes, there are buyers from across India for properties in Delhi NCR. Property transactions are soaring high in Delhi, Noida, Greater Noida, Ghaziabad, Gurugram and Faridabad. In such a situation, title verification of the property before buying has become very crucial.

Sometimes a buyer is interested in buying a property seeing its location, price or anticipatory appreciation value. However, overlooking ownership related issues can lead to lifetime legal battles, if the property title is not verified properly.

Buyers tend to think that registering a property is enough to have clear titles of ownership. But registration of a property is one of the many steps in a property transaction. It doesn’t validate all the legal formalities of the property related to clear ownership, previous transactions, inheritance, existing litigation if any.

Property lawyer goes through the documents and the situation to highlight the concerns before the buyer puts his money at risk. BK Singh Advocate helps his clients fight their case with proper legal consultation regarding their property they own or intend to own.

What Are the Common Legal Risks Found During Property Title Verification? 

Every sale transaction has some legal effects and documents. An unaware buyer might face certain defects later on which may affect his rights over the property or may not allow him possession of the property or might affect his ability to sell the property in future.
Some Common Title Defects are – 

• Pending family dispute over ownership 
• Sale of property by person who has not complete authority to sell it.
• Transfer by operation of unlawful or defective documents.
• Ownership is disputed by somebody through litigations. 
• Details of ownership are different at time of registration.
• Ambiguity in ownership of property due to partial or unclear succession.
• The property has a mortgage/charge/liability on it. 
• Non – matching ground and registered property. 

Some defects can stop the owner from selling the property, getting a property loan on it, constructing the property or gifting it to someone else in future. Doing a due legal check will let the buyer know what stage the property is at before buying it.

How Can a Property Lawyer Help in Due Diligence Before Purchase? 

A property lawyer can assist you in conducting a property title check. Property due diligence involves more than screening a single piece of paper. It's about understanding how items listed on the ownership factsheet, transfer history, government registry, and displayed documents relate to one another.

Property lawyer BK Singh Advocate conducts due diligence of title deeds, history of ownership, and other related documents for property buyers to understand the risk they may incur during a property transaction.

A report from due diligence lets you know where you stand today and outlines potential risk areas you should be aware of.

Lawyers can help you with: 

• Title Documents Verification 
• Previously Transaction History 
• Seller's lawful rights over property. 
• Documentation Gap 
• Legal issues associated with the property. 
• Guide buyers on the risk they are about to invest.

Diligence is unique for every property situation. Your documentation and research requirements will vary based on ownership type, location, category, and available records.

What Should Buyers Check Before Paying Advance Money for Property? 

Purchasers often cannot wait to make an advance payment as soon as they have found that property that catches their eye. However throwing good money after bad before obtaining legal advice can lead to difficult issues if there are problems with the title later down the track.
Before paying out good money: 

Clients should ensure that – 

• The vendor actually own the property. 
• All of the sellers conveyancing documents are valid
• Previous dispositions have been correctly registered 
• There are no caution against dealings registered over the property
• That they have any necessary consents 
• The description of the property is correct. 

By getting legal advice early, purchasers can avoid gambling with their money.

Why Should Investors Perform Property Title Verification? 

Investors and buyers take several factors into consideration before they put money on buying or investing in a property. Future value prospects, rentals, locations, market expectations etc. Legal Title of the property is one fundamental factor that influences every investment decision.

Investing in a property with a flawed title can create lot of hassles for the investor either when he wants to sell it or when he wants to claim a loan against the property. Banks and financial institutions vet the property papers thoroughly before approving a loan/ mortgage.

Title verification of a property helps investors know the property in and out before they decide to buy a property. It allows the investors to sieve out properties that are legally fit to invest in and ones that are not.

BK Singh Advocate guides you through your property documentation and legal concerns before the property is sold.

When Should You Consult a Property Lawyer for Title Verification? 

• Visit a property lawyer with every real estate transaction prior to signing your agreement.
• Even if. … Think of it as a menu of situations when you really should:
• Inherit the home from someone. 
• There are multiple parties on the title. 
• The seller purchased the home only a few years ago.
• You don’t have a clear history with the property.
• Turning farm land into residential or commercial land.
• It’s a new build. 
• You (the buyer) are missing documentation. 

How Can Property Lawyer Delhi Help With Title Verification? 

Property Lawyer Delhi will help you in any kind of property document related issue, ownership due diligence, property dispute or transaction queries across Delhi NCR and India.

BK Singh Advocate verifies each and every fact of the property matter instead of doing superficial verification of routine documents. Every transaction is scrutinized on case to case basis depending on its ownership history, data available and concern of buyer.

Frequently Asked Questions