At the time of buying a property, exercise of legal due diligence is essential to avoid getting entangled in legal issues later. Mentioned below are some of the precautions which you must take before signing on the dotted line.
1. The title of the property forms the foundation of proprietary rights. The title of the seller must be clear and free from any encumbrance. Before you buy a property, verify the title of the seller and also the antecedent chain of ownership. A search of the records at the sub-registrar’s office may be carried out for documents that may affect the property and may have been registered .The report will show the recorded owner of title of the property and changes in the title of the property.
2. If the sale documents are being executed by a person holding power of attorney on behalf of the owner, the said power of attorney should be scrutinized closely. The person must not only possess the legal power to sell property, the power of attorney should also be validly executed before the appropriate authority. Alternatively, a person may have paid the entire consideration to the owner and holds on to the property for some time to sell it at a later date for a profit. The sale will be effected by the power of attorney holder on behalf of the owner. Such power of attorney must be properly stamped and registered.
3. Always inspect the original documents of the seller and read all the documents carefully before signing them.
4. Always verify documents of title to check payment of stamp duty. If the ownership of property has changed hands more than once, examine all the documents for payment of stamp duty by the predecessors.
5. If the flat that is being purchased is in a building built on a land which is given on lease, lease rent would have to be paid for the land by the flat owners. If the lease is to expire shortly, it is possible that the lease rent may increase substantially. Hence, the terms of the lease must be verified before buying the flat.
6. Occupation certificate should be inspected to ensure that the building has been built legally, especially in case of new buildings.