Look Before You Leap

January 2018



Screen property documents carefully before buying a house to avoid fraud. The decision to buy a home is one of the biggest decisions a person makes in his lifetime.

After saving enough money, securing a home loan, a house is bought. Thus, it is important that you check each and every document carefully if you're buying from the secondary market.

Here is a list of essential documents that need to be checked thoroughly when you buy a property.

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Sales deed:

A sales deed is a proof that the property has been transferred from the seller to the current owner. Apart from ensuring that the property has a clear title, the registration of the sale deed in the local registrar office is equally important. You should make sure through the title deed that the property is in the name of the seller. The best practice is to get the property deed reviewed by an expert lawyer just to make sure that there are no loop holes.

Approved building plan:

In order to ensure that the property in question has been constructed legally, the new owner must check that the approval plan has been obtained from either jurisdictional commissioner or any other officer authorised by the commissioner.

Encumbrance certificate:

An encumbrance certificate is a reference to any liabilities on the property in the form of loan against the property or mortgage that has not been cleared. Provided by the subregistrar's office, where a property is registered, the encumbrance certificate gives all details of any transaction on the property. After repayment of the bank loan, the bank issues a release certificate.

Completion certificate:

A completion certificate is a proof that the building is in compliance with the rules and is built according to the approved building plans. It is a crucial certificate to ensure the supply of basic amenities such as water, power and sewerage network.

Occupancy certificate:

After the municipal authorities issue the completion certificate, they also have to issue the occupancy certificate. The document certifies that the building is in compliance with all the local rules and byelaws and thus fit for occupation. An inspection is conducted by the civic officials, post which the certificate is awarded to the developer. A person should never buy a property which doesn't have an occupation certificate. Many cases have been seen where people have been living in a property and are blissfully ignorant about the importance of the certificate. If a property doesn't have an occupation certificate, the civic authorities have the power to get the house vacated or get it demolished if it has been constructed illegally.

Power of attorney:

A power of attorney is a document through which a person nominates another person to rent, sell or mortgage the property on his behalf. But this document, too, should be registered.

Receipts of taxesbills paid:

The buyer must ensure that all dues have been paid until the date of sale. The buyer should always ask for original receipts. If the seller does not have tax receipts, the civic body can also help confirm the ownership through its records. Other regular bills such as water and electricity should also be checked.

Conversion certificate:

If there is a change in land use from agricultural to housing, revenue authorities issue a conversion certificate stating the change in the use of land. A no objection certificate should be obtained from the tehsildar's office. The buyer should get all the documents legally verified by a lawyer who will help identify any possible loopholes in the title of the property.

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