This is valid when we plan to buy a resale property. Ensure that the seller has cleared all the loans (if any) on the property we are planned to purchase.
The bank also gives a release certificate, indicating that loans, if any, on the property have been paid, which also comes in handy in case of pledged land for sale.
Encumbrance certificate: Next main document in the list is the encumbrance certificate which ensures that the plot or the land is not tied down by any legal debt. This document is used to figure out if the plot is free from all legal disputes before buying.
Usually, we can get it from the office where the Sale Deed of the land has been registered. We can take EC for the last 13 or 30 years online also.
Property tax receipts and Bills: While investing, no one wants to be on the wrong side regarding the tax.
When we plan to buy a property for resale, it is cautious to ask for previous tax receipts from the seller and make sure that we collect the original bills and tax receipts from the seller.
Local approvals: We must check and ensure that the local authorities have given the all-clear on the plot of land we are planned to purchase and ensure that the land has all the necessary approvals in place before investing.
Original land deed: This is the original land deed of the present owner and all the previous owners, so get all the papers before investing.
Did you know that all the property land in India is agricultural land unless designated for some other purpose by the government? So thus, for carrying out any real estate investment activity, we must first convert the land to non-agricultural land (NA).
There are various types of NA that you must know of, which include:
· NA – Residential
· NA – Commercial
· NA – Warehouses
· NA – Resort
· NA – IT/ITeS
So, we need to ask for a copy of the non-agricultural paper – Residential order from the seller.
If the owner is an NRI: This means, if the owner of the land is an NRI, then also ask for a Power of Attorney (POA) from the seller.
The ground-work
The second one after the paperwork, it to check the ground realities of the property.
Land Measurement: The first step in the groundwork is to check the dimensions of the plot. For better results, we can also get a surveyor to do this process.
FSI Check: The Floor Space Index (FSI) of the land determines the extent of construction on a piece of land we planning to buy.
Means, for example, if we have a plot sized 2,000 sq. ft. with an FSI of 100%, then we can build a house fully for 2,000 sq. ft, but if the FSI for the plot is only 50%, then we can only construct a house only for 1,000 sq. ft.
Potential Appreciation: We must do our real estate research and invest in a plot that will offer good returns in the future. If we are confident, we can also go with the stock market investment approach of picking an undervalued stock (plot) and waiting for it to appreciate.
The actual process
Last but not the least, after Step 1 and Step 2, we need to arrange documents, as a buyer, should have for registration, which includes:
Sale Agreement: If we planned and decided to purchase a property with the prominent seller, as in the case of any property, the first step is to draft an agreement, a sale agreement between both the parties involved and the agreement should cover the following things very clearly and precisely:
· Particulars of the land detailed
· Agreed cost/price of the land between seller and buyer
· Advance amount given by the buyer
· Period in which the actual sale should take place and the Cancellation clauses
Title Deed: The next step is to we need to get the Title Deed written by a government-licensed document writer for the property we are planned to purchase.
Receipt: Next get the receipt from payment of stamp duty.
With all the documents mentioned above, we can register our dreamland in the office
(SRO) in which the property falls. But, during registration, if the land price over the amount of 5 Lakhs, the seller must submit either his Pan Card or Form Number 16 during registration to complete the process legally. As a buyer, we also need two witnesses for the registration of the land.
Some Registration charges
During the registration process, we need to pay stamp duty charges, registration fees, and document writer’s fees.
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Once our land is registered, the next step is to get the approval for our house plan to construct our dream sweet home. Keep in mind, that this approval is only valid if we wish to construct our house immediately on our land.
After that we will need the help of an architect here for designing the building plan and the best builder for customized construction, that is to construct our house and finish our project within the time period.
Keeping all the above factors in mind will ensure that our investment will turn out to be a logical income-earning decision or a good investment for our best future.
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