12 Important Documents To Check Before Buying A New Property

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Property investmentRahul Khanna, a simpleton from Bangalore has hit rock bottom since the time he has invested in his most ambitious dream home – a towering apartment in Jayanagar, Bangalore. One must be wondering as to what went gravely wrong despite his ambitious dream being fulfilled? His major folly was his hasty decision of investing in a property without vetting all the legal property documents fearing that he would lose the deal. But alas! This minute slip by him has today put him in a legal battle with the seller. Property documents are a vital part of any property investment, be it an empty plot or a fully furnished apartment. Here is a list of important property documents required to buy an apartment or an independent house.

1. Sale Deed:

A Sale Deed is the core legal document that acts as proof of sale and transfer of ownership of the property from the seller to the buyer. A Sale Deed has to be mandatorily registered. It is important that before the Sale Deed is executed one should execute the sale agreement and should check for compliance of various terms and conditions as agreed upon between the buyer and the seller. Before executing the Sale Deed, the buyer should check whether the property has a clear title. He/she should also confirm if the property is subject to any encumbrance charges.

* A seller should settle all the statutory payments such as property tax, cess, water charges, society charges, electricity charges, maintenance charges etc., (subject to the agreement) before executing the Sale Deed.

2. Mother Deed:

Mother Deed, also known as the parent document, is an important legal document that traces the origin/antecedent ownership of the property from the start (if the property has had various owners). It is a document that helps in the further sale of the property, thereby establishing the new ownership. In case of absence of the original Mother Deed, certified copies should be obtained from the registering authorities. Mother Deed includes the change in ownership of the property, be it through sale, partition, gift or inheritance. It is very important that the Mother Deed records the references to previous ownership in a sequence and should be continuous and unbroken. In case of a missing sequence, one should refer to the records from the registering offices, revenue records or the recitals (preamble) in other documents. The sequence should be updated until the current owner.

3. Building approval plan:

A building plan is sanctioned by the BDA (Bangalore Development Authority) or BBMP (Bruhat Bengaluru Mahanagara Palike) or BMRDA (Bangalore Metropolitan Region Development Authority) or BIAPPA (Bangalore International Airport Area Planning Authority) without which the construction of the building is illegal under the Karnataka Municipal Corporations (KMC) Act. A building owner has to get an approved plan from the jurisdictional Commissioner or an officer authorized by such Commissioner. However, the authorities sanction a building approval plan based on the zonal classification, road width, floor area ratio (FAR) and plot depth. A set of documents are required to be submitted by the owner in order to obtain a building approval plan. The documents include- Title Deed, property assessment extract, property PID number, city survey sketch (from the Department of Survey and Settlement and Land Records), up-to-date tax paid receipt, earlier sanctioned plans (if any), property drawings, 2 copies of demand drafts, foundation certificate (if any) and a land use certificate issued by the competent authority (viz., Dy. Commissioner). It is mandatory that the building owner hires a registered architect who will draw a plan meeting the applicable bye laws. One can get a building approval plan within 4-5 working days if all the requirements are met, via the newly invented BBMP software- Automated Building Approval Plan.

4. Commencement Certificate (For under construction property):

A Commencement Certificate is a legal document issued by the local authorities (BDA/BBMP & alike) after the inspection of the site. This document states that project meets the give criteria and helps in the commencement of a construction on a site by the builder. Failing to acquire a Commencement Certificate will result in the construction being considered illegal, levy penalties and can even attract an eviction notice.

5. Conversion Certificate (Agricultural to Non-Agricultural land):

With a vast amount of land being agricultural in nature in Karnataka, a Conversion Certificate is mandatory to be obtained from the legal body for the property. A Conversion Certificate is issued to change the use of the land from agricultural to non-agricultural purpose from the competent revenue authority. Further, the competent revenue authority requests the Department of Town and Country Planning to issue an NOC for the conversion of land for residential purpose. There are a certain set of documents to be submitted by the owner to acquire a Conversion Certificate. The documents required to obtain a Conversion Certificate are;
3 copies of the R.T.C extracts, Village map, land sketch, certified copy of the land tribunal, zonal certificate, Title deed, no dues certificate by village accountant and Mutation Records (MR) copy.

6. Khata Certificate and Khata Extract:

Khata is derived from the word ‘account’. It is an account of a person owning a property. It typically consists of (a) Khata Certificate and (b) Khata Extract. A Khata Certificate is mandatorily required for the registration of a new property and the transfer of a property. Khata Extract is nothing but obtaining the property details from the assessment registrar. It is needed while property buying and acquiring trade license. The Khata is widely referred to as A Khata and B Khata (Revenue records extract). ‘A’ Khata has properties listed under BBMP jurisdiction with legal property construction and ‘B’ Khata has properties under local jurisdiction with violated property constructions. One should avoid buying a B Khata property as it will be deemed as an illegal construction. Nevertheless B Khata may be converted to A Khata under certain schemes by paying penalty to the Government.

7. Encumbrance Certificate (EC):

Encumbrance means charges in the ownership or liabilities created on a property that is held against a home loan as security. An EC consists of all the registered transactions done on the property during the period for which the EC is sought. Simply put, it is a certificate sought for a particular period evidencing the property purchase/sale, the presence of any transaction or mortgage. One should submit a copy of the Sale Deed to obtain an EC. A person applying for an EC should fill in the Form 22, affix a non-judicial stamp and submit it to the jurisdictional sub-registrar’s office. Complete residential address, property survey number, property location, the sought period, property description, its measurements and boundaries should be mentioned in the Form. A nominal fee amount will be charged on a yearly basis. The time taken to obtain an EC will be between 3-7 working days or more depending on the period sought.

8. Betterment charges receipt:

Betterment charges are also known as improvement fees/development charges that are to be paid to the BBMP before a Khata can be issued. Currently the developers are entitled to pay a fixed amount as betterment charges to the municipal body. A receipt of the same should be obtained at the time of property buying.

9. Power of Attorney (POA):

A POA is a legal procedure used to give authority to another person by the property owner on his/her behalf. One can either give a Special Power of Attorney (SPA) or a General Power of Attorney (GPA) to transfer one’s rights over one’s property.

10. Latest tax paid receipt:

Receipts for property tax bills ensure that taxes for the property are paid up-to-date to the government/municipality. For properties falling under the BBMP jurisdiction, it is mandatory for property taxes to be paid up to date so a buyer could get a Khata issued in his name. It is therefore important for the buyer to make enquiries with the government/municipal authorities to ensure that all the dues are cleared by the seller. The buyer should ask the seller for the latest original tax paid receipts and bills and check the details of the owner’s name, the tax payer’s name, and the date of payment on the receipt. If the owner does not have the tax receipt, the buyer can contact the municipal body along with the survey number of the property to confirm the ownership of the land. Nevertheless, the buyer should also ensure that other bills such as the water bill, electricity bill etc. are paid up-to-date.

11. Completion Certificate (for a constructed property):

A Completion Certificate is issued by the municipal authorities denoting that the building is in compliance with their rules in terms of height, distance from the road, and is constructed as per the approved plans etc. This document is important at the time of purchasing a property and seeking a home loan.

12. Occupancy Certificate (for a constructed property):

When the builder applies for this Certificate, an inspection is carried out by the authorities to ensure that the construction meets all the specified norms. This certificate is obtained after the completion of the construction. It is important at the time of buying a property, seeking a home loan, before the builder allows people to take possession of the property and, for the transfer of Khata. Basically, it certifies that the project is ready for occupancy.

While it is important to seek all the above documents from the seller at the time of buying a property, it is also critical you deploy a competent property lawyer for vetting of the said documents. Specific advice should be sought about your specific circumstances.

      
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320 thoughts on “12 Important Documents To Check Before Buying A New Property

  1. Vijay

    Dear sir,
    I am panning to buy a plot , in which seller telling it’s A khata but when we asked betterment fee paid receipt he is telling not available, we heard that Bbmp will issue a duplicate A khata certificate by taking some bribe, is it true? If so how we can confirm whether it’s original or duplicate?

    Reply
    1. admin Post author

      Hi Vijay

      There is no other way to check whether the Khata is genuine or not unless cross checked through BBMP local office. You may obtain a 2nd copy of the same Khata to ascertain its genuinity. BBMP by itself never issues any fake Khata but it may be done through in nexus of some local agents who do this way for making money faster.

      Reply
    1. admin Post author

      Hi Siddaraju

      Ensure that the GPA is registered in local Sub Registrar Office and the GPA details are reflecting in the EC (Encumbrance Certificate). Apart from that take a No Objection Letter from actual owner that he is fine to get the property sold to you through his registered PoA holder. Based on that you may go ahead on the purchase.

      Reply
  2. Vikash Kumar

    Hello Sir,
    I am planning to buy a flat in Electronic City, Bangalore. Its a small apartment with 20 flats (G+4) which is under construction now when i asked the builder about the document he said it come under CMC Khata(City Municipal Corporation) and they do not provide OC and CC, is it safe to buy such flats and if yes what all document i should required to get from such builder. Please let me know if you have any service or can help me to verify the documents from this or any other builder.

    Thanks

    Reply
    1. admin Post author

      Hi Vikash

      If this falls under CMC limit also, there is a Building Plan that is approved towards initiating the construction. Please ensure that the construction is done as per approved plan. Also, get your property documents verified by a competent lawyer and ensure that there are no missing links. If you need assistance towards legal opinion service, contact us at 080-3047 4444 or email us at services@homeshikari.com.

      Reply
  3. Krishnan

    Hi Sir,

    I am planning to buy an apartment near Electronics City, Bangalore. The name of the property is Ajantha Prime. The builder has shared the documents for legal verification. The document contains the BBMP Khatha certificate, however, I am not sure if it is ‘A’ Khatha or ‘B’ Khatha. Is there anyway to find out if the Khatha type from the Khatha certificate ?

    Thanks
    Suresh

    Reply
    1. admin Post author

      Hi Suresh
      If the Khatha mentions anywhere on top as “B Registrar Form Extract”, then its B Khatha. If it mentions as Khata Certificate, its A Khatha. However, we will advice that you check the legality of the documents by a competant property lawyer rather than deciding upon by yourself. All documents have linkages and a better lawyer can provide you many other insights, which you will surely miss, if you try to look at them by yourself.

      Reply

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