One of the most significant financial decisions you make is buying a home. It doesn’t matter if it’s an apartment, an independent house or just a piece of land – a proper check on the legal documentation of the property is indispensable. Most property related conflicts and financial losses result from buyers not checking the proof of ownership or approvals or clearances for the property before parting with their hard-earned money.

Through proper verification of legal documents, you as a buyer can ensure that your property is legally safe, does not face legal issues, and is approved by the relevant authorities. It further prevents you from being victims of fraud or other liability with regards to a property, either then and at the later stages of its ownership.

Here’s the list of critical legal documents that every homebuyer should get checked before purchase:

Sale Deed

One of the most vital documents during the property transaction process, the sale deed is legal proof of the property’s transfer of ownership from the seller to you.

• When inspecting the sale deed.
• Ensure that the seller is the rightful owner of the property.
• Confirm that the property details are in consonance with the actual property.
• Check that there are no erroneous clauses or conditions.
• A sale deed is required to be registered with the local sub-registrar office in order for it to be considered legal and valid.

Title Deed

This document acts as evidence of legal ownership. You need to ensure that the seller has the full title for the property without any disputes.You should ideally examine the ownership of the property for a period of past few years and confirm there are no legal complications over its ownership.A property lawyer can be hired to ascertain if the title is clean.

Encumbrance Certificate

This document is a legal statement that confirms that a property is free from any financial or legal liabilities like loans, mortgages or other legal issues related to the property. This document is important as it clears the property from any legal claims on it by any third party. You should request for the EC of the property for a period of the past 10 to 15 years.

Approved Building Plan

Buyers should also be given a look at the building plan for an apartment or independent house, which should be approved by the local municipal or development authority. Non-compliance of building plan can lead to penalties, notices or other such legal action.

The building plan should outline details such as:

• Building layout
• Floor plan
• Parking areas
• Common amenities
• Safety approval
• Occupancy Certificate

An Occupancy Certificate or OC is a mandatory document given by the relevant local authority once the building is constructed in accordance with the building plan. It indicates that the property is legally safe for occupation and has complied with safety norms. Without an occupancy certificate, the buyer might have to face difficulties regarding.

• Water connection
• Electricity supply
• Property registration
• Loan approval
• Completion Certificate

A Completion Certificate confirms that the project is completed in accordance with government-sanctioned specifications and construction regulations. This certificate is primarily significant for home buyers of newly constructed properties from developers. It assures that builder has followed all rules, regulations and norms while constructing the project.

RERA Registration Details

Most housing and commercial projects are required to be registered with state RERA authority under RERA Act.

Check for the:

• RERA registration number
• Approvals for the project
• Possession details
• Details of builder
• Previous record for any complaint

RERA registration ensures there is a degree of transparency and transparency in all deals, thereby preventing the buyer from fraud. RERA details can be obtained from the official website of respective state’s RERA.

Property Tax Receipts

You should obtain the property tax receipts for your property, indicating that previous property taxes were paid accordingly. Unpaid taxes could be the new buyer’s liability after a property purchase. Buyers should obtain the latest receipts of the tax paid.

Khata Certificate and Khata Extract

In many of the Indian states, khata certificate and khata extract are the main legal document to assess property ownership and tax dues. These indicate the property registration with local municipal authorities along with tax assessment. A Khata Extract should ideally be checked at the time of purchase of the property, so that the same is registered with local authorities under the name of the buyer at the time of purchase, making the future dealing with such property possible.

No Objection Certificates (NOCs)

There are a number of NOCs that a builder is required to procure from various government authorities before construction can start. Such authorities might include fire department, water and electricity boards, airport authority (if applicable) and environmental authorities. You must check that all the necessary NOCs were obtained for your property.

Home Loan Clearance Documents

If a property has been mortgaged to a bank through a home loan, ensure that the seller has fully paid off the home loan. The original mortgage documents released by the bank will confirm this. Obtain a loan closure certificate and no-dues certificate from the bank concerned to show that the house has no mortgage liens on it.

Possession Letter

This is a document that indicates that the builder has handed over the possession of the property to you legally.

Legal Verification: why is it important?

Many buyers focus more on the location, price and amenities and do not give much importance to legal check, however, legal verification is as important as checking any other aspect of a property, as the attractive property, without proper legal clearance can be a huge financial liability for you at a later stage. It is best to hire a legal property professional for legal verification of documents, as they will be able to detect any such loopholes or potential pitfalls that you might overlook.

In conclusion, a thorough check of all legal documents will help the buyers in making their investment a safer bet. Documents like sale deed, title deed, Encumbrance Certificate, RERA Registration details, Occupancy Certificate, Approved building plans, Khata certificate and extract and NOCs would give the buyers assurance about the legal status of the property as well as ownership. Careful and detailed legal due diligence for any property transaction can secure your investment for a lifetime against fraud and legal issues.