Understanding the Legal Status Checking of a Property

How important is it to check the legal status of a property before buying? Is it a must to get involved in verifying the legal status of a property before initiating the purchasing process? The transactions in real estate are increasing fast because of improved purchasing power and the increasing trend of property investment for getting better yield than traditional investment channels, but there has also been a continuous rise in disputes mainly concerned with the legal status of properties. In Indian courts of justice, around 60% of cases are property-related, and the faulty legal status of property is the common origin of dispute. This big statistic shows us the importance of knowing and verifying the legal status of property. Wouldn’t you like to secure your property investment while purchasing a property? Read this blog further to understand how to check the legal status of a property before buying.

What is the Legal Verification of a Property?

Legal verification of property is a process of checking that the property to be purchased is free from any legal issues or social disputes. It ensures that the seller is the legal owner of the property. It ensures that all the dues are paid and no liability related to property ownership is pending. 

Importance of Checking the Legal Status of a Property

Property disputes are draining and tiresome. Even a minor dispute or legal fault may impact your finances, disturbing all your future plans. Checking the legal status of a property helps you know your authority and rights to: 

• Protect Your Investments: Protects your possessions against illegal possession or unauthorized claims. 

• Make Informed Decisions: Knowledge of the rights and authority strengthens your confidence to let the property transaction go ahead. 

• Seek Legal Recourse: Knowledge of the legal framework helps you seek appropriate legal support to eradicate particular issues. 

Checking the legal status of a property requires you to go through several documents. Unless you check the following nine documents with the help of an experienced real estate broker, don’t go ahead and make any transaction. 

List of Ten Documents You Need to Check the Legal Status of a Property

1. Title Deed: It establishes the property's ownership.

2. Sale Deed: It is a proof of the sale detailing the seller’s details and property details

3. Building Approval Plan: Issued by the local authority or municipality, the building approval plan certifies that the construction adheres to all the regulated norms and legality of the property regarding compliance. 

4. Completion Certificate (CC): This certificate is issued by the local development authority, certifying that the project complies with all the regulatory requirements, safety standards, building codes, and approved plans. The local development authority inspects the property once it's completed. 

5. No Objection Certificates (NOCs): These certificates are issued by different authorities and departments like the pollution control board, fire department, airport NOC for height clearance, and water and electricity boards after making sure that all the norms are followed. 

6. Khata Certificate: This revenue document establishes the identity of the property owner for tax payments. It is required for getting utility connections like water and electricity.

7. Encumbrance Certificate: It is a legal document issued by the government. It confirms that a property is free from any financial or legal liabilities.

8. Occupancy Certificate (OC): The local municipal authority issues this certificate after the building or home is constructed and found suitable for habitation. 

9. Allotment Letter: Issued by the developer or builder, this letter includes details of the property, payment plan, the amount paid, and additional charges. It is the preliminary confirmation of the allocation of property. It is issued when a buyer purchases an under-construction property.

10. Possession Letter: Issued by the developer, this letter indicates a date after which the buyer can claim ownership of the property. However, this isn't proof of the property's title. 

Understanding these key property documents makes the transaction process safe and seamless, delivering the expected experience and satisfaction. Whether you are an investor or a first-time home buyer, it is good to involve a real estate broker providing comprehensive support services, helping you find a safe and return-promising property investment. To make an informed decision about buying a property with boosted confidence, you need to have an objective-oriented approach for checking the legal status of the property. 

Eight Essential Steps to Verify the Legality of a Property

Verifying property documents is a crucial aspect of successful property transactions. To help you check the legal status of a property you want to buy or invest in, here I list eight essential steps- 

1. Collect the property Documents: Collect all the necessary documents related to the property as mentioned above. 

2. Primary Document Inspection: Review these documents carefully. You may also involve a real estate agent to confirm the authenticity and check any discrepancies if they exist. The details provided in the documents must match the information shared by the seller or seller's agent.

3. Verify from the Local Administration: Verify the documented information from the local government authorities. To accomplish this task, you may need to visit the local municipal corporation, registrar's office, or land record office. However, the leading real estate brokers offer support services to simplify this task, saving your considerable time and ensuring the processes with proper follow-ups. 

4. Survey the Property: Conduct a property survey to check the physical attributes of the property, like measurements and boundaries.  Compare the onsite parameters with the parameters mentioned in the sale deed.

5. Check Encumbrance Certificate: You can get an encumbrance certificate from the Sub Registrar's office where the sales deed of the property is registered. This document helps you verify if there are any legal claims or unpaid dues.

6. Get a Legal Opinion: If you are an experienced investor with deep insights into property transactions and associated legal issues, you can verify property documents on your own without involving a lawyer. However, seeking a legal opinion is always beneficial because an experienced property lawyer has better knowledge, expertise, and experience in identifying any legal issue that you may miss.

7. Issue Public Notice: The public notice in local newspapers about your intention to buy the particular property helps you uncover hidden issues. The notice invites claims or objections to the proposed sale. 

Step 8. Final Agreement: Once you are sure of the legal status of the property, zero financial dues, and no dispute, you may go ahead with agreement drafting. Review the agreement to make sure that all your interests are protected.