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6 musts before you buy a house
September 07, 2007
1. Examine the property title papers. You should ensure that the property has a clear title. If the unit has changed many hands, the biggest challenge is tracking down the ownership titles of the past owners. Banks wouldn't give you a home loan if the ownership can't be clearly established. Also, the property should be free from any encumbrances.
"This is very relevant as the seller could have availed loans from other banks and institutions and deposited the original deeds to them as a security. Therefore, it needs to be verified that the seller is in possession of all the original documents," says Madhumita Ganguly, senior general manager, HDFC Bank.
For Delhi-based working couple Pallavi and Rahul Narvekar, the process of buying a 3-bedroom house was rather smooth.
"All the papers regarding the property were in place, but we still hired a lawyer to validate the documents," say the Narvekars, who bought their house in 2003. "The purchase was through a distress sale and we got a pretty good deal," they add.
In cases of leasehold property, prior permission of the lessor -- the authority that leased out the land -- may be needed for the transfer and mortgage of the property. There could be situations where the properties are being sold on power of attorney.
Remember that not all states recognise this transaction, and if they do, the documentation will need to be legally compliant. It is also advisable to keep other documents such as indemnities and advertisements in newspapers so that you are prepared for contingencies such as loss of documents.
2. Look for the purchase agreement. This is your second step of ownership verification. Get hold of this agreement paper between the seller and the previous owner of the property. It helps in identifying whether the seller is entitled to sell the property.
3. Appraise the building sanction plan. You wouldn't want a rude shock of municipal or other authorities knocking at your door and then penalising you for not conforming to structural norms and building plan approvals. "Ensure that the structure has complied with the sanctioned plan and the property has an acceptable, verifiable completion certificate and occupation certificate," says Ganguly of HDFC. Both completion and occupation certificates are issued by municipal authorities. The completion certificate proves that the building complies with norms such as those related to its height and its distance from the road, and doesn't flout other norms. The occupation certificate testifies to proper water, sewage and electrical connections.
Before buying a house ensure that the property is free from any encumbrances.
Photograph : Dibyangshu Sarkar/AFP/Getty Images
Also read: India's emerging growth centres
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