Buying a property is arguably the biggest investment one makes in his/her life. Hence, one needs to be completely sure of what they are putting their money in, so there are no future risks. If you are considering buying an old apartment but are faced with several questions, here is a checklist you might want to consider:
Though tedious and time consuming, one must go through elaborate legal formalities and paperwork in buying an old apartment. Atulay Nehra, Legal and Investment Consultant, Magicbricks Bureau says, “It is crucial to assess whether the seller is the legal owner of the property or not. All documents must be properly registered in the government records”.
“The title of a resale property must be clearly defined. Purchase agreement, sale deed, No Objection Certificate (NOC) from the society, copy of builder-buyer agreement and the documents establishing the chronological chain of ownership are the basic documents you need to have before buying an old property,” adds Nehra.
Before buying an old property, ensure there are no dues on the property from electricity, water and property tax department is a must. While the maintenance, electricity and water dues can be checked from the builders and the society, tax can be checked from the revenue department.
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Since the apartment is being bought from an individual and not a developer, checking the financial history of the apartment is crucial. It is important to keep track of all the financial transactions that have taken place.
“If a bank had offered financial support to the seller for buying the property, NOC from that bank is required as well,” says Nehra.
One must also consider the cash component that sometime prevails in such deals.
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Rahul from Mumbai asks on Open House - “Can I avail home loan for a flat in a 40-year old building?” to which Rakesh Makkar, president and chief distribution officer, DHFL replies, “The loan amount is subject to technical verification of the property. Considering it is a 40-year old building, the amount would be decided by the lending institution after ascertaining the condition of the building. The loan approval would also be as per the institution's policy on the age of the building."
The case is similar in all transactions involving old apartments as banks are usually not willing to lend more than the amount mentioned in the sale deed.
Maintenance issues and charges
Generally, the maintenance charges in an old property are comparatively low because of fewer amenities they come along with. But you must check how much you have to pay for common spaces. In some cases, certain amenities are offered free of cost in older buildings.
However, it is the maintenance issue that one must take a serious look at while buying an old apartment. Major points such as the structure and plan of the building, walls, cracks and moisture must be examined seriously.
“Check whether the cracks on the walls and the moisture threaten the structure or not. Also, check whether the property has been constructed according to the plan or not. Seepage and damage can endanger the entire structure. Hence, one must get it checked beforehand. The age and quality of wiring should also be checked,” says Prasana Kesavan, Chief Architect of Studio 7 Consultants Pvt Ltd, an architectural firm based in Chennai.
One must also consider the recurring revamping cost like painting, water-proofing and structural repairs associated with older properties.
Which floor should be preferred in an old building (say 10-15 years old?)
In order to avoid the maintenance issue, homebuyers should prefer apartments on the top floors in an old building to avert the problem of dampness and leakage.
“An old building in an old locality can mean surrounding high rises. In that case proper lighting and ventilation can be a major challenge in the lower floors,” says Kesavan.
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