Why Is Legal Property Verification Important Before Buying Property in India?
When you invest your life savings into buying a flat, plot, builder floor, commercial unit or family house, you take care to look at the location, interiors and price. But sometimes buyers unknowingly fail to make sure that the person selling has clean, marketable title to the property.
That’s where property due diligence when purchasing real estate in India can come in handy.
Even if the seller presents a registered document, the document itself may not answer all of the following questions. Who owned the property previously? How did the seller come to own it? Is there another co-owner of the property? Is someone asserting a claim of inheritance? Is the property mortgaged? If a Power of Attorney is signing the transaction, do they have the power to sell? Do the building approvals match what is being offered for sale?
These questions become more important when a buyer is asked to make a large token payment on the spot.
Property Law Services in Delhi works with buyers, families, investors and businesses to evaluate documents, perform a title search and conduct transaction driven legal due diligence before money changes hands.
The objective isn’t to make the buyer feel like something fishy will never arise. No lawyer should make that promise. But a lawyer can investigate the readily ascertainable defects with the title, inconsistencies in documents, ownership, encumbrances and regulatory compliance to help the buyer understand what legal risks are associated with the property they are buying before entering into a legal agreement.
Why Should You Verify a Property Before Paying the Seller?
A title investigation will tell a purchaser who has title to the property, whether that person legally has the ability to sell it and whether the documents reflect the sale as described. It is much easier to spot potential problems before money changes hands than after you have taken possession or registered. Even if a seller appears to be legitimate, he or she may have incomplete documents. A family might truly think that one person has title to a property when in fact a succession document shows there are multiple legal owners.
An agent may have only viewed some documents related to the property and may not know that someone further up the chain of title is missing paperwork. Delhi NCR deals will involve DDA, municipal, revenue, development- authority, builder, society, RERA and Sub-Registrar documents depending on the age of the property. Deals in Noida, Greater Noida, Ghaziabad, Gurugram, Faridabad and other NCR cities may involve a different variation of authorities as well as local documents.
BK Singh will go through these documents with the understanding of that specific property rather than approaching each sale transaction as if they were identical. Information on our site about title disputes and defective titles can help review any title issues.
What Should You Know About Property Verification at a Glance?
Quick Facts
- Ordinarily a Registered sale deed is enough for most transactions. But sometimes it may be necessary to confirm the title chain back upto certain date.
- The sale of immovable property of value less than the prescribed limit as mentioned under section 54 of Transfer of Property Act, 1882 can be done only through registered instrument. A Contract for sale does not by itself create any interest in the property sold.
- Section 17 of Registration Act, 1908 enunciates various classes of documents affecting immovable property and which can be registered.
- RERA-registration will help in viewing project details, but don’t rely on it completely. Do your personal title/document verification.
- Mutation entries, tax payment receipts etc. can help you in performing due diligence but will have limited use unless validated from title documents.
- Property inherited, sold jointly, sold by mortgagor, property sold under PoA typically require more thorough document verification.
- Title due diligence reduces the risk to minimum; it cannot guarantee that at some future date, a third party claim may not arise.
What Does a Property Verification Lawyer Actually Check?
Due diligence or property verification refers to the legal vetting of the chain of title, the seller’s ability to sell, relevant documents, defects if any, and sale documents. Property verification involves digging deeper than just looking at the recent sale deed carried out in the seller’s favour.
Lawyer BK Singh would first question how did the present seller become the owner of said property. The prior sale or transfer of property might have been done through a sale deed, conveyance, gift deed, partition deed, inheritance, court decree, allotment letter, auction or any other relevant instrument of transfer.
You now have to look at the chain before that. Did the title proceed from A to B with supporting documents that clearly prove the kind of title they say they own?
Title searches can also reveal inconsistencies. Plot numbers can change. The area can be incorrect. One document may read that the property is a freehold property while another may declare a leasehold tenure. Spelling of the seller can change.
If you’re that type of buyer that frets over unknown liabilities on a property, check out how to find out if a property is disputed before you buy.
Which Indian Laws Can Affect Property Verification?
There cannot be a one-size-fits-all property verification checklist that would cover every transaction in India. Central laws, state laws and local rules impact your transaction, depending on how you are acquiring the property and where it is located.
For instance, the Transfer of Property Act, 1882 Sections 54 and 55 apply with respect to sale. "Sale" is defined in Section 54 as transfer of ownership in exchange for a price. That Section also defines a sale (completed sale) as distinguished from an agreement to sell. Section 55 codifies certain rights and liabilities of buyers and sellers. Importantly, for our purposes, it lays down, in certain defined situations, a duty on the seller to make known to the buyer material defects in the property or title which buyer would not discover by exercising ordinary care.
The Registration Act, 1908 applies because Section 17 of that Act identifies several categories of instruments affecting immovable property which are required to be compulsorily registered.
If applicable, the Real Estate (Regulation and Development) Act, 2016 would also apply. Section 3 talks about registration of specified real estate projects. Sections 4 and 11 require publication of project information and promoter related disclosures.
Stamp duty rules, development-control regulations, land laws, apartment rules, requirements of individual authorities may vary from State to State, Union Territory to Union Territory and category to category.
That is why we at Advocate BK Singh conduct a Property title verification based on location and legal history of the property rather than going by some checklist found on the internet.
Which Property Documents Should Be Reviewed Before Purchase?
- Present sale deed/conveyance deed registered in owner's name
- Previous title deeds available that make up the chain of ownership
- Agreement to sell/allotment letter/builder-buyer agreement (if any)
- Mutation and land/land revenue records (if any)
- Property tax receipts and documents showing pending (if any)
- Approved plan of the building
- Occupancy certificate/Completion Certificate (if any)
- RERA project details for projects under RERA.
- Possession related documents (if any)
- POA, if power of attorney has been given to someone to act on behalf of the owner.
- Will/Probate/Succession/Relinquishment/Partition/family settlement documents (if property is inherited)
- Society/association/authority documents related to property
- Release from mortgage/brokerage/parties who paid part of the property price (if any)
- Identity and power-of-attorney certificates of the seller
- Draft of Agreement you intend to enter into and sale deed.
We have a separate page which deals specifically with mutation and land-record related topics in Delhi NCR. Please see Property Mutation in Delhi NCR.
You (the buyer) will not require all of the above documents in every case. BK Singh will guide you on necessary documents once he has the property details and knows how the seller came to own the property.
Who Should Consider Legal Property Verification Before Buying?
One who invests a significant amount of money into real estate should have their documents reviewed by a lawyer. Certain agreements however merit additional scrutiny.
Unfamiliar with what establishes ownership versus what merely confirms it, is the first time homebuyer. Viewing drafts via screen is the NRI purchaser. To establish authority and permitted usage, the company acquiring an office, boutique, storage facility or industrial space may also require assistance.
Particular attention should be paid to documents when the property is being sold by heirs, has multiple owners, is being sold by an attorney holder, has been pledged for a loan in the past, changes hands several times, has misplaced originals or involves a family disagreement.
Property bought from a builder-or resale that is older can come with additional queries regarding ownership of the land itself, construction documentation, and how the land ties to a specific level.
One who purchases property from an auction site or directly from a company will need documents reviewed once more.
At Property Lawyer Delhi, we can have your documents reviewed by Advocate BK Singh who will analyze all documents related to your transaction rather than give a yes or no answer based on one document.
How Does Advocate BK Singh Assist With Property Verification?
Title research lets a buyer know what they are buying into before they spend their hard-earned money.
We start by going through the documents that are available. From there we can identify what type of title the seller has and what history the property has. Documents that are missing, don't match up or need further explanation can be highlighted.
We then analyze the seller's authority. Because someone is named in the records does not mean they have the right to sell all interest in the property. Joint tenants, heirs, partnerships, company shareholders and Power-Of-Attorney situations can be revealed that may require further investigation.
Mutation entries, approvals, project registrations, unauthorized construction laws or existing interests are also considerations if they apply.
Bottom line is that the buyer has a better understanding of what appears to exist according to the records, what is unknown and what should be questioned before buying.
That is why Title Search from Advocate BK Singh is valuable. You don't just receive a list of potential concerns, we sit down with you and explain everything in the context of your intended purchase.
Why Should You Hire a Property Lawyer Instead of Checking Documents Yourself?
Many records are easier to find online through portals. But finding a document is NOT the same as interpreting a document legally. If you find a registered deed, you may think you have clear title. A lawyer will likely ask a follow-up question: How did the person who signed that deed acquire the legal interest that was transferred?
That's the same question you should ask about mutation entries, tax receipts and possession documents. Each can serve a purpose. But one supporting document should not be considered automatically as your instrument of title.
Inconsistency is another risk. A document may appear legitimate on its own. But when you line up the current documents with old deeds, descriptions and succession papers, they may tell a different story.
Hiring Advocate BK Singh can be especially helpful when the amounts are large, the paperwork is old, the owner's history is complex or the seller is pushing for fast cash. Legal review should not make the buying decision for you. It should help you make a better informed decision.
Does RERA Registration Mean a Flat Is Automatically Legally Safe?
No, RERA registration is not a substitute for property due diligence, though it is a very important regulatory filter for projects falling under its ambit. A Promoter cannot advertise/sell the covered projects located in notified planning areas unless he registers under section 3 of the RERA Act itself or is otherwise specifically exempted from registration under the Act. Additionally, he is required to disclose certain project information on registration and make it available through the regulatory framework created under the Act.
Buyers still need to verify the land title, the agreement terms, approvals,project status, ancillary documents of the particular unit they intend to buy. Read a complete article on RERA verification before buying flat by Property Lawyer Delhi.
When transacting with respect to projects, Advocate BK Singh can incorporate the information available on RERA along with the contract and title documents instead of treating the registration number as a standalone legal filter.
When Should You Contact a Property Verification Lawyer?
Ideally the review should take place before parting with a substantial non refundable payment, or before signing any binding agreement or registering.
Issues of review arise urgently where the seller does not have the original (or earlier) title papers, other members of the family are claiming an interest, the property was acquired through inheritance, or Power of Attorney is part of the title history.
Review may also be advised where the broker and seller have differing stories, the built-up area quoted does not match documents, or antiquated mortgages/liabilities or pending litigation are disclosed.
Queries regarding registration/stamping may need to be reviewed separately. Buyers with such concerns can refer to portions of the property registry and stamping pages.
Speak to Advocate BK Singh before you part with most of the purchase price and you'll have more flexibility to address/document concerns than you will after the fact.
Why Does Local Property Verification Matter Across Delhi NCR and India?
Property law in India is overseen by central legislature but property transactions themselves are governed by State laws, local body regulations, development rules and even variations can occur based on the type of property you’re purchasing.
Properties in Delhi could have an entirely different set of records than a plot transaction in Greater Noida managed by the authority. Ghaziabad, Gurugram, Faridabad will each have different revenue, development and municipal documents.
The same goes for other regions in India too. Mumbai, Pune, Bengaluru, Hyderabad, Chennai, Kolkata, Ahmedabad, Jaipur, Chandigarh, Lucknow, Kanpur, Prayagraj, Varanasi etc all have their own processes when it comes to land records as well as State specific requirements.
Property verification services should take this into account.
Want a quick overview specifically for Delhi NCR? Head over to our article which covers property verification in Delhi NCR.
Advocate BK Singh will go through documents based on the type of property, records available, how the transaction is structured and any other requirements based on location.
How Can Property Lawyer Delhi Help Before You Buy?
Delhi property Lawyer delivers document centric legal assistance to purchasers seeking more peace of mind before investing funds in a real estate deal.
Title documents, prior title documents, ability of seller to sell, family tree, Power-Of-Attorney, property specs, project documents, approvals, and sale agreements can all be reviewed based on the facts.
Any discrepancies can be spotted before proceeding with the purchase instead of after the fact.
Clients also seek assistance with situations where a seller cannot explain a missing link in the chain of title, a property has multiple stakeholders, property was transferred via a family settlement, or a sale by builder transaction comes with documents the buyer doesn’t understand.
Advocate BK Singh strives to keep his advice straightforward. Due diligence is legal in nature but we try to keep things simple and explained in layman terms.
Visit Property Lawyer Delhi to learn more about our practice.
What Do Buyers Commonly Ask About Property Verification?
1. Why do i need my property to be verified before i buy?
There are many occasions that you would want to verify your property. Few reasons are you want to know who is selling it to you, how does the chain of titles look like, do they own the right to sell it, are there any mortgages on that property? There are wills or any other documents pertaining to that property. Let Advocate BK Singh analyze all these documents and he will tell you if something is wrong with your property.
2. If I have a registered sale deed is that enough to know that my property is legit?
Just because you have a registered sale deed for that property doesn’t mean you’re 100% sure it’s yours to purchase. There can be information on that title or property you may not know about. So always ensure you read all information regarding your property transaction before you buy.
3. Should I have my property verified before I give a token amount?
Before you pay a large token amount ensure you have all the necessary documents about that property. There could be missing information on the title of your property or who is selling it to you may not have the right to sell it to you. Let Advocate BK Singh analyze your documents before you make that large investment.
4. Can I buy an inherited property?
Yes of course you can, but ensure you ask where the seller obtained their title from. You can do this by looking at documents like title deeds, will, succession certificate, partition deed, family settlement deeds. These documents will allow you to see who owned the property before the person who is selling it to you. Just because your parents left you the property doesn’t mean others don’t have a legal right to it.
5. If someone is selling me a property through power of attorney, can I verify that?
Yes of course! Just ensure you know who the property is under and that they have authorized the person selling it to you through power of attorney. You should also check that the power of attorney document allows them to sell the property to you.
6. Will mutation tell me if I own a property?
Having your property under mutation is great but you should know other documents associated with your property. Such as sale deeds, conveyance deed, will, partition deed just to name a few. Let Advocate BK Singh look at your mutation and chain of title.
7. If I verify my property through RERA do I still need to look into title of that property?
Yes, when you are looking to purchase property through RERA. You should look at other information about the property you want to own. Do your research and look over all your options.
8. Can my lawyer assure me that there will never be any dispute on my property?
No lawyer can give you that type of assurance. All we can do is identify any problems with your title we may find when researching. This will help you know what you are getting yourself into when you buy that property.
9. Do I need to verify if I’m buying a commercial property?
Yes, you definitely should. Depending on what your looking to buy. You may want to know who the property owner is and if they can legally sell it to you. Whether your buying a shop, office or warehouse. Have your property verified.
10. Why should i speak to Advocate BK Singh before I buy property?
You should speak to Advocate BK Singh because he can go through every document you have. From Title Deeds, will, succession certificate, Power of Attorney, Agreement’s anything that’s related to your property. He can then inform you of any legal problems he finds.
Conclusion
Never attempt verifying your property until the eleventh hour i.e. just before registration. Verify your key documents at a time when you can still inquire about the process, seek additional documents or even walk away from the property purchase. Properties can look perfect on paper but may not have clear title history. There can be documents registered in your name but family living on the property can claim ownership of the same property. You can have ownership of the property but might not have rights to sell what you are selling.
If you do proper verification you can't eliminate all the risks that may occur in future. What you will do is allow yourself to know what to look out for before you put your hard earned money into that property.
Advocate BK Singh can help Buyers, Family, NRIs and Corporate to verify their property documents, do a title search and property transaction history checks at Property Lawyer Delhi. Depending on your needs and location.
