Possessing a house is a dream cherished by many. It is but a few who see it materialise. It often takes a lifetime of savings and loans for most to come closer to their dream. When there are so much of financial resources involved, it is natural for an investing party to take adequate steps in order to ensure the safety of their invaluable assets. It is not uncommon that the property one purchases may have a defective title. This can almost mean devastation for middle class purchasers who not only lose their savings but also are forced to spend years in litigation against fraudulent sellers.
Sale Of Immovable Property
In India, the sale of immovable property is regulated under the Transfer of Property Act, 1882. According to the Act, immovable property means land and anything permanently fastened to earth, for example- buildings, excluding standing timber, growing crops and grass. The Act further states that immovable properties can be transferred only through registered instruments.
The Indian Registration Act, 1908, also mentions the indispensability of a registered instrument. This means that a deed of sale must be duly registered by both the parties at the concerned sub-registrar office, after paying the requisite stamp duty and other levies incidental to the transaction and at a rate fixed by the government after considering the location and value of the property.
Transfer Of Title
A sale of immovable property can verily be described as the transfer of its title. A title can be described as the ownership right to property. In other words, the rights and liabilities of a property vest with the person(s) holding the title. As the maxim goes “Nemo dat quod non habet”, which means no one can transfer a better title in a property than what he himself has. This makes it absolutely necessary to ensure that a prospective seller has indeed clear titles of the property in his/her name. Transacting on a property with ambiguous titles can be a risk of the highest degree and can have the effect of taking away your life’s savings instantly.
Why Conduct A Title Check?
A title check is conducted to ensure that the property being sold is the absolute property of the seller and that all legal and tax-related requirements are met with. It also ensures that no third party has rights over the property in question including by way of mortgage, lien and so on. A title check can also help spot fraudulent sellers who sell the same property to more than one person.
How To Conduct The Title Check Of A Property?
The primary source of verifying the titles of any property is the concerned Sub-Registrar office. As we observed earlier, an immovable property may be transferred only through a registered sale deed. Registration is a process where a transaction is given legal recognition and duly recorded in the Sub-Registrar office. As it is understood that retaining a copy of the sale deed with the government authorities serves as a record and as a guard from fraudulent additions and deletions by parties. The purpose of this provision is to verify with the records lying with the sub registrar office every time there is a dispute between the parties.
Ownership Details At Sub-Registrar Office
The ownership details of a property at any given point of time is mentioned in the register of the sub-registrar. This serves as the primary proof of title and helps ascertain whether the person claiming to be the lawful owner of the property is indeed the registered owner. The document which vested him/her with the ownership in the past- for instance, a sale deed will also be recorded in the sub registrar office, which is available for reference. Care should be taken to verify the following documents before purchasing a property. The list is not exhaustive and may be subject to additions and deletions based on individual states’ laws.
Khata/Patta or Mutation Certificate
Once a property is registered, the details need to be updated in the concerned revenue office. The document shows the name of the present owner and nature of the holding along with rights and liabilities if any.
An Encumbrance Certificate systematically records all registered transactions on a property. It can be applied for at the sub-registrar office by anyone who knows the property details like survey number and boundary details. It is important since any mortgage, loans and other similar transactions are documented in it.
The Mother deed is the primary document that enabled the earliest recorded transfer of the property in question. It is especially of importance in a sale of individual plots divided from a bigger piece of land. The mother deed can explain the channels through which the property titles flowed to the present seller.
Tax Paid Receipts
The tax liability of the seller should be completed as on the date of the proposed sale. The details as to the ownership are also ascertainable from the details given in the tax receipts.
If the plot used to be part of an agricultural land, it needs to be converted into a residential land in order to validate construction of residential buildings on it. The lack of conversion may result in the demolition of properties by the government.
If you are planning to purchase a house in an urban locality, it is necessary that the house plan has been approved by the municipal authorities. If there is any violation in terms of structures, they stand a chance of getting demolished along with the entire building if the violations are serious.
Besides, documents like General Power of Attorney held by the seller needs to be verified as to its authenticity. There are chances of the same being revoked or the holder selling the same property to multiple buyers. There may also be cases of a mortgaged property being sold.