What documents are required while buying commercial or residential property?
When buying commercial or residential property you would need to check for the following documents:
- Market Trends about prevalent rates of property in the vicinity and last known transactions.
- Identify the property you wish to purchase
- Formulate commercial terms.
- Distinguish between terms and conditions of the contract which are negotiable and those which are fixed e.g. price, payment schedule, time of completion etc.
- List your requirements with a reputed broker.
- Ask for photocopies of the all deeds of title related to the property to be purchased. Examine the deeds to establish the ownership of the property by seller, preferably through an advocate. Ascertain the survey number, village and registration district of the property as these details are required for registration of the sale. Previous encumbrances and loans, if any, on the property must be cleared before completion of purchase of the property. The title of the Vendor to the property must be clear and marketable.
- Finalise commercial terms of purchase of the property. Ascertain transfer fees, stamp duty and registration charges to be paid on purchase of the property.
- Ascertain outgoings to be paid for the property i.e. property tax, water and electricity charges, society charges, maintenance charges.
- Request Vendor to obtain, if applicable, consent, permission, sanction, no objection certificate of various authorities such as the (a) society (b) the income tax authority (c) Municipal Corporation (d) the competent authority under the Urban Land Ceiling and Regulation Act (e) any other authority.
- Will you require a loan for making payment of the consideration amount? Ask for a pre-approval letter from the lending institution.
- Permanent Account Number of Vendor and Purchaser under Income Tax laws Payment of stamp duty on the formal agreement or document for transfer of the property, signing by both the Vendor and Purchaser and registration
- After payment of the entire sale price, take over legal possession of the property along with documents of title in original from the Vendor of the property
Change name of the holder of the property to the purchaser in the records of the society, electricity company, municipal corporation, Index II etc.
The liability of paying stamp duty is that of the buyer unless there is an agreement to the contrary. Section 30 of Bombay Stamp Act, 1958 states the liability for payment of stamp duty
Which documents are to be verified before purchase of a Flat?
Before you purchase a flat, you have to have a title and document search conducted by a competent advocate. You cannot do it yourself. You have to use the services of a competent advocate. It is a professional job to be done with professional assistance.
What are all the important documents one should check before buying any property?
If you want to purchase a property, you have to look at the approved layout plan, approved building plan, ownership documents, carryout search, etc. Contact an advocate before you purchase a property so that he can advise you.Before you purchase a flat, you have to have a title and document search conducted by a competent advocate. You cannot do it yourself. You have to use the services of a competent advocate. It is a professional job to be done with professional assistance.
Can an Advocate get inspection of all title documents for the property?
The lawyer can be allowed to take inspection of all original documents pertaining to the property.
How to verify the authenticity of the various documents submitted by the seller of the house, particularly with regard to the possibility that the house has not been sold earlier to a third party ?
Regarding authenticity of documents, again, you have to take the help of an advocate to verify.
Are there any formalities to be completed or forms to be filled on execution of the agreement or document of transfer?
Yes. The formalities and forms may vary from State to State depending on where the property is situated.
- Every State has its set forms under the Registration Rules that are required to be filled and filed along with and at the time of Registration of Sale Deed/Transfer Deed.
- Under the provisions of the Income Tax Act and Rules for a transaction of sale, it is now compulsory for the Purchaser and Seller to give their Permanent Account Number and in the event of either the Seller and/ or the Purchaser would be required to fill Form 60 of the Income-Tax Rules.
In case of either the Purchaser or the Seller being a Non-Resident Indian, not assessed to tax in India, such a Party would be required to file Form 60 of the Income-Tax Rules.
Which documents must be compulsory registered?
The following documents are required to be registered compulsorily under the Indian Registration Act, 1908:
- Every time the immovable property is sold/purchased, the agreement needs to be registered.
- Instrument of gift of immovable property;
- Other non-testamentary instruments which purport or operate to create, declare, assign, limit or extinguish, whether in future or in present, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards to or in immovable property.
- Non-testamentary instruments which acknowledge the receipt or payment of any consideration on account of creation, declaration, assignment, limitation or extinction of any such right, title or interest;
- Lease of immovable property from year to year or for any term exceeding one year or reserving a yearly rent. But the State Government may publish an order in official gazette exempting any district or a part of a district or a lease that does not exceed the term of five years and the annual rent of which does not exceed Rs. 50/- .
- Non-testamentary instruments transferring or assigning any decree or order of a court or any award when such decree or order or award purports or operates to create, declare assign, limit or extinguish, whether in future or in present, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards to or in immovable property.
- Authorities to adopt a son that is not conferred by a will.
Which are the instruments that attract the payment of Stamp Duty?
The instruments like Agreement to Sell, Conveyance Deed, Exchange of property, Gift Deed, Partition Deed, Power of Attorney, settlement and Deed and Transfer of lease attract Stamp Duty on market value of the property.
What is meant by Carpet Area, Built-Up Area & Super Built-Up Area?
- Carpet Area is the area enclosed within the walls, actual area to lay the carpet. This area does not include the thickness of the inner walls. It is the actual used area of an apartment/office unit/showroom etc.
- Built up Area is the carpet area plus the thickness of outer walls and the balcony.
- Super Built Up Area is the built up area plus proportionate area of common areas such as the lobby, lifts shaft, stairs, etc. The plinth area along with a share of all common areas proportionately divided amongst all unit owners makes up the Super Built-up area. Sometimes it may also include the common areas such, swimming pool, garden, clubhouse, etc. This term is therefore only applicable in the case of multi-dwelling units.
10.How can knowing the Carpet Area, Built-Up Area & Super Built-Up Area of a flat help me in purchasing a flat?
This break up is extremely essential as builders can place anywhere from 65% to 85% per cent of the super built area as carpet area. That means, if the price is quoted as 1,000 sq ft super built up area, the carpet area could be anywhere from just 650 sq ft to 850 sq ft. If this break up is not mentioned in the agreement, demand that the vendor/ builder mention it in the sale deed.
What exactly do we mean by a Free Hold flat? What are the advantages and disadvantages, if any?
A freehold property (plot or a flat) is one where there is a whole and sole owner(s), ownership is full and unconditional (within the provisions of the laws of the land) and there is no lessee involved.
What Is Leasehold Property?
Leasehold Property is property leased to a lessee for a stipulated period. The Lessee pays lease premium and annual lease amount as fixed and mutually agreed by the Lessor and lessee. The land ownership rights remain with the Lessor and a prior sale-permission is normally required if you plan to transfer the property.