FAQs

Q: What is the most important document to verify before buying a property?

A: The Title Deed (often the Sale Deed or Conveyance Deed) is the primary document proving ownership. You must verify the original Title Deed to ensure the seller has the undisputed legal right to sell the property. Never rely solely on photocopies. For resale properties, you should also trace the “Mother Deed” or chain of ownership back at least 13 to 30 years to ensure there are no gaps in title transfers.

Q: What is an Encumbrance Certificate (EC) and why do I need it?

A: An Encumbrance Certificate is a legal document issued by the sub-registrar’s office confirming that the property is free from legal or financial liabilities. It reveals if the property has been mortgaged to a bank, pledged against a loan, or is currently locked in a legal dispute. Always demand an EC covering a minimum of 13 years before making any token payment.

Q: Can I buy a property from someone holding a Power of Attorney (PoA)?

A: Yes, but with extreme caution. The Supreme Court of India has ruled that property cannot be legally transferred merely through a General Power of Attorney (GPA). If the seller is a PoA holder, ensure the PoA is specifically registered for the sale of that exact property, is currently valid, and authorizes the holder to execute the sale deed. It is highly recommended to have a real estate lawyer verify PoA documents.

Q: What must I check if a property is jointly owned?

A: If a property is owned jointly (e.g., by siblings or spouses), every single co-owner must explicitly consent to the sale and sign the sale agreement. A sale executed by only one joint owner without the registered consent or release deed from the others can be legally challenged and nullified later.

RERA & Government Approvals

Q: Why is RERA registration critical for new properties?

A: The Real Estate (Regulation and Development) Act, 2016 (RERA) protects buyers from builder fraud and project delays. If you are buying an under-construction apartment or a plot in a new layout, ensure both the project and the developer have a valid state RERA registration number. RERA ensures the builder cannot divert your funds to other projects and holds them legally accountable for promised delivery timelines.

Q: What is the difference between a Completion Certificate (CC) and an Occupancy Certificate (OC)?

A:

• Completion Certificate (CC): Issued by local municipal authorities, certifying that the building has been constructed strictly according to the approved master plan and building codes.
• Occupancy Certificate (OC): Certifies that the building has all required utility connections (water, electricity, fire safety) and is legally fit for human habitation.

Q: Is it safe to move into a flat that does not have an Occupancy Certificate (OC)?

A: No. Moving into a property without an OC is illegal. It gives municipal authorities the right to disconnect your water and power supply, or even issue an eviction/demolition notice. Furthermore, nationalized banks generally will not approve home loans for properties lacking an OC.

Financial & Tax Compliance

Q: Are there any specific tax rules I must follow when paying the seller?

A: Yes. Under Section 194-IA of the Income Tax Act, if you are purchasing a property worth ₹50 Lakhs or more, it is legally mandatory for you (the buyer) to deduct 1% TDS (Tax Deducted at Source) from the total sale consideration before paying the seller. You must deposit this 1% directly to the government using Form 26QB and issue a Form 16B to the seller.

Q: How do I ensure there are no hidden dues on a resale property?

A: Before finalizing the purchase, you must collect the following clearance documents from the seller:

• Property tax receipts for the last 5 years showing zero outstanding balance.
• A “No Dues Certificate” from the electricity and water boards.
• A No Objection Certificate (NOC) from the Housing Society or Resident Welfare Association (RWA) proving all maintenance charges and special assessments have been cleared.

Q: What if the resale property currently has an active home loan on it?

A: Do not pay the seller directly until the bank’s dues are settled. You have two safe options:

1. Require the seller to pre-close the loan, retrieve the original property documents from the bank, and provide a “No Dues Certificate” from the bank before you buy.
2. Have your bank coordinate directly with the seller’s bank to pay off the outstanding loan amount during the transaction, releasing the title documents directly to your lender.

Essential Legal Checks (Due Diligence)

Before signing any agreement or paying a token amount, complete these steps:

• Verify the Chain of Title: Don’t just check the current owner. Trace the property’s history (the Mother Deed) back at least 13 to 30 years to ensure every past transfer was legal.
• Pull the Encumbrance Certificate (EC) Yourself: Do not rely on the EC provided by the seller, as these can be forged. Obtain a fresh 13-year EC directly from the Sub-Registrar’s office to check for hidden loans or legal claims.
• Match the Names:Ensure the name on the Title Deed exactly matches the seller’s ID (Aadhaar/PAN), the property tax receipts, and the municipal mutation records.
• Check RERA Registration: For any new or under-construction property, visit your state’s official RERA website. Verify that the project number is valid, the builder’s track record is clean, and there are no regulatory holds.

Safe Payment Practices

Fraudsters follow the money. Protect your funds with these rules:

• No Cash Transactions: Make all payments (including the initial token amount) via cheque, demand draft, or bank transfer (RTGS/NEFT) directly to the account of the person named on the Title Deed.
• Never Pay to Third Parties:Do not transfer money to a broker’s personal account, a relative of the seller, or an overseas account.
• Insist on a Registered Agreement to Sell: Once the token is paid, immediately execute and register an “Agreement to Sell” at the Sub-Registrar’s office. This legally locks the property and prevents the seller from selling it to someone else (double-sale fraud).

The Golden Rule: Always hire an independent property lawyer to conduct a title search. Do not use the lawyer recommended by the seller, builder, or the real estate agent.