Buying a property in India is perhaps the biggest financial decision you’ll ever make. And yet, most buyers neglect basic checks, thinking just about the excitement of finding something they like. And what happens later? Later, they end up with legal issues, hidden expenses or worse, buying a property that they are not even able to transfer in their own name.
The real estate market in India has evolved to another level. The regulations have improved as more accountability has been introduced by the Real Estate Regulatory Authority (RERA). However, problems still exist and buyers who do not care to do the homework often get caught up.
Before signing anything or giving away any money, here are the six points that you must confirm:
1. Check the title of the property
This is the most basic check that buyers either skip entirely or rush through. A clear title means the seller has the legal authority to sell the property. This may sound too obvious to you but this is incredibly common in our country. Properties are transferred several times over the years, paperwork gets misplaced, family conflicts arise and it turns out that the same property has been sold to different buyers.
So before you begin, hire a lawyer to investigate the title history for minimum 30 years. You need to verify that there are no unresolved issues and no legal orders concerning the property. This is mandatory and the basis of all the other 5 points.
2. Verify RERA
RERA was implemented in 2016 and as soon as it came it transformed the experience of buyers who were buying a property in India. Earlier, buyers of under construction properties had minimal options if a developer postponed possession or altered the design. Many buyers suffered financial losses. That is what RERA addressed. Now, developers have to register their projects with the Real Estate Regulatory Authority before advertising or selling. The registration proves that the developer has revealed project details, schedules and financial data to the governing body.
If you’re considering a property that’s under construction, visit your state’s RERA website and look up the project before taking any further steps. It takes five minutes and reveals much information. Is the project officially registered? Do the timelines they provide match what is documented? Has there been any complaint filed against this developer previously?
A developer who hesitates to provide their RERA registration number or becomes evasive when it’s mentioned should raise some caution.
3. Look at approvals and sanctions
While buying a property in India, one question that buyers rarely ever ask is: does this building have the permission to exist here?
It may sound like a strange question but it is truly a valid one. In India, some residential buildings were built without all the approvals, on land not designated for housing or with extra floors that exceeded official permission. Individuals only discovered the issue years later, when they attempted to sell or seek a loan.
Before anything else, you should request the building plan approval, commencement certificate, and land use permissions for the plot. These verify that the local authority has assessed and sanctioned the construction. If a developer is reluctant to share these or provides unclear responses, consider that seriously.
The repercussions of acquiring a property without full approvals can vary from challenges in obtaining a mortgage to issues when trying to resell. In the most severe instances, local authorities have released demolition orders for unauthorized buildings. Though uncommon, it does occur, particularly to buyers who took for granted that everything was fine without verification.
4. Verify any outstanding loans and obligations on the property
A property in India can look completely legitimate and still have an outstanding home loan, unpaid property taxes or any other pending dues.
If you purchase a property that has an outstanding loan and the seller hasn’t paid it off, the bank can still claim on the asset. Request an encumbrance certificate, which provides a record of all registered transactions and claims against the property during a particular timeframe. Additionally, verify that property tax payments are current and that there are no outstanding fees to the housing society or local municipality.
5. Verify the property and its boundaries physically
Make sure you visit the property several times before making a decision. Verify if the actual situation aligns with what has been documented.
Disputes over boundaries are common, particularly in older homes or properties located in semi urban regions. Examine the physical limits against what is specified in the sale deed and layout plan. Look into any nearby construction projects, assess the state of the roads and drainage and determine if there is a consistent supply of water and electricity in the area.
6. Read the Sale Agreement carefully
While buying a property in India, most buyers sign agreements without reading them properly. This can become the biggest mistake of your life! The sales contract oversees all details. Payment plans, ownership timelines, penalty provisions, consequences of developer delays, inclusions in the sale and exclusions.
Be aware of provisions concerning force majeure, which developers may sometimes apply widely to escape penalties for delays. Verify the carpet area in comparison to the super built up area for which you are being billed.
If any part of the contract seems vague or appears biased, have an attorney examine it prior to signing. The cost of legal advice at this stage is nothing as compared to the cost of a dispute later.
A little homework goes a long way
Investing in a property in India can be an incredibly rewarding decision, serving both as a residence and a long term investment. However, the procedure requires patience and due diligence.
The six check points mentioned above are not very complicated. You don’t need to be a legal expert. All they ask is that you take your time, pose the appropriate questions, and prevent enthusiasm from clouding your judgment.
The right property is worth waiting for. Just make sure the paperwork is as solid as the foundation.