Buying a flat or house is one of the most important decisions of your life. Everyone dreams of buying a home from a very young age. Years of saving and planning can't be wasted when the time comes to take a final decision. Thus, with political and social awareness, being legally aware is also essential in today's world. Adv. Viraj Patil, one of the leading advocates in Navi Mumbai, has shared some valuable legal insights about understanding about basic laws which is necessary to tackle any legal problem.
1. Choosing Right Builder
It is one of the most crucial steps while buying a flat or property. You should check the previously completed projects, their construction quality, possession time, and transaction honesty and transparency of the builder in whose project you will invest. You can confirm this information on online web portals from reviews and suggestions of the people or inquire from the real estate agents or locals in the property location you will invest in.
2. Location of Flat and Infrastructure
The flat in which you are investing should be in a safe and secure location. Check whether the area is nearby your work area or in the city, or isolated. You should also enquire about the basic connectivity. Check the distance of public transport including bus, metro, or auto-service, location of educational institutes, hospitals, grocery, and other essentials.
Of course, there are individual choices. Some people choose properties near their office or pollution-free areas outside the city, or lavish infrastructure. Accordingly, the property rates differ. Properties nearby or in the town are expensive whereas in suburbs or outside areas the rates are economical. Hence, it is essential to keep a balance of all these aspects.
3. Carpet Area
It is the most critical aspect while investing in a property. The area offered by the builder is the super built-up area. It includes the areas of the shafts, internal spaces, balconies, terraces, and staircases. In contrast, the carpet area is the usable space. Generally it is the one-third deduction area of the super built-up area.
For example, if you buy a 2BHK flat of 1000 sq. ft size, you will get around 650-700 sq. ft carpet area. Hence, Adv. Viraj Patil, one of the best property lawyers in Navi Mumbai, recommends buyers measure the flat area and only after that buyers should negotiate the property price with the Builder.
4. Timely Possession
Many individuals invest in an under-construction project. If there is a delay in possession, the buyers can face a financial crunch. Several people stay in a rented property or pay pre-EMIs. In such situation if possession is delayed their financial planning is disturbed. Hence buyers should take the possession date clarity from the builder.
Often the project gets delayed due to late supply of raw material, pending government approvals or when the builder receives extra FSI ( Floor Space Index) /TDR ( Transferable Development Right ) on their commercial or residential areas. Besides, it is also seen that builders invest the current project’s funds in other projects. Then there is a risk that the buyer's investment in the property might get locked. Therefore it is better to ask the builder about a realistic possession time frame.
5. Hidden Charges and Add-on Expenses
While purchasing the flat, the builder provides its core value. Still, there are many other additional or hidden charges such as GST, stamp duty, parking space, service tax, conveyance charges, infrastructure charges, electrification and transformer charges and also preferred location charges depending upon the floor-wise height of the flat.
6. Sample Flat is an Illusion
Only by seeing the sample flat, many individuals invest in the flat. But there are several differences between the sample and actual flats such as differences in area, layout, and specifications. Hence buyers must thoroughly inspect the flat they are investing in.
7. Loan Facility
If you have sufficient funds to invest in a property, then no issues. But if you need a home loan, you can apply for it from your bank or other banks that offer lower interest rates.
Many projects have tie-ups with some banks which finance their project and they have an approved project finance number. These banks conduct the legal and financial due diligence of the project and land. It means they check the title, search and inspect whether the land and building has any pending bank or financial institution loans or third-party claims.
If you approach these banks and quote the project finance number, you can get to know the above details. So applying for a loan from these banks is not a bad idea and you will face fewer problems in loan approval and need minimal documentation.
8. Check Important Documents
You should check the following documents:
A. Title deed:
The title deed includes the sale deed and share certificate. The sale deed is a valid legal proof of the buyer’s ownership. A sale deed is a registered instrument through which property is transferred or conveyed from person A to B. Hence, the registration of the sale deed is essential. If you are investing in resale property, it is necessary to check the previous chain of agreements and sale deeds.
Once you buy the flat a share certificate of a cooperative housing society is also a valid legal proof of the buyer’s ownership of the flat in addition to the sale deed. Also to raise any queries or suggestions in the housing society or for voting rights or any grievance it is necessary to be a member of the society which you can become by entering your name on the share certificate and the register of members of the cooperative housing society.
B. Completion Certificate (CC)
Once the project gets completed complying with all the codes and laws, the local municipal authority which is the planning and development authority issues the building completion certificate (CC) to the builder.
C. Occupancy Certificate (OC or partial OC)
After receiving CC, the builder can proceed with the essential utility work such as water, electricity connection, gas lines etc. Then, the builder can apply for OC. Once the CC and partial OC are received, you can take the possession of your flat.
D. Building Plan
The building plan is the blueprint of the project. It states whether the project's layout, specifications, and equipment are made according to the laws. Hence, an approved building plan is necessary. If there are any illegal constructions, there is a possibility of its demolishment by the municipal authority, and problems may arise in receiving the OC. The blueprint of the project can be accessed either from the builder or from the Society Office after the formation of the cooperative housing society.
E. No Dues Certificate/ NOC of Society
If you buy a resale property, ask for NOC of Society from the seller to verify if the seller has any maintenance dues against society. Though the NOC is not mandatory as per the byelaws and the Seller is required to give intimation to the Society about his intention to sell the flat but in practice if the buyer is availing the loan from the Bank then after the Agreement to Sell( Part Agreement) is registered then the Bank will ask the Buyer to produce the No Dues Certificate ( popularly known as NOC) from the Seller’s Society. Along with this if the Conveyance is already executed in favour of the Society then a Mortgage NOC of the Planning and Development Authority as in the case of CIDCO in Navi Mumbai may also be required.
F. Loan Release Letter or Certificate
When buying a resale property, verify if the seller has any pending loans on that property. Then, you should ask the seller for a loan closure letter to validate if the seller has cleared the loan.
G. Encumbrance Certificate/ Title Search Report
The encumbrance certificate gives clarity about the title. You can get it online or approach a local lawyer and apply at the sub registrar’s office to get it. You can make an application and ask for a 30 years historical record of the land/property and all its transactions. This is because to redeem the mortgage loan of any bank or financial institution a 30 year time limit is prescribed legally.
H. Utility Bills
Especially in resale properties, it is essential to check if all the utility bills, including electricity bills, gas bills, and maintenance receipts whether they are in the name of the seller or owner.
I. Possession or Allotment Letter
After receiving CC and OC, you will receive the possession letter from the builder. Before entering the flat, do check if the builder has received the CC and OC and only after that take the possession of the flat through a possession letter otherwise basic utilities like water and electricity supply may not be ready and there will be every day headache.
So, these are the basic instructions and essential documents required to be seen when buying a flat or property in India. If you want to check other papers, it's excellent and you can proceed. For any legal guidance, feel free to consult Adv. Viraj Patil, a renowned advocate in Kharghar, Navi Mumbai.