In earlier articles we have always emphasized on the importance of property documents and why should you avoid soft launch projects. Today we have listed down some of the most important documents that must be validated for a peaceful purchase. Only documents can tell the genuineness of the land/project and the builder. Never go by word of mouth or broker’s assurances.
Under Construction Property
This is the most important document that must be verified before getting into the further details. Land record gives you an idea of ownership, title, obligations, rights, mortgage etc. Do not buy a property or apartments whose title is not clear. There have been case where builder or individuals sold flats/apartments without having the ownership of the land. At the end it’s the buyer who suffer. So, it is better to check land records with builder. To cross-check, copy of land records can be obtained from online portals of most of the state governments/ authorities. You can also use RTI to get such information. While a lot of people may think that this is too much of a hassle, it is always helpful to get the first step correct.
Land use type
It is illegal to have residential properties in a commercial or industrial zone. Write to the development authority and check the land use certificate to ensure that the property you plan to purchase is in the residential zone. Sometimes the land will be in what is called a ‘converted zone’. It has been observed in past that builders without obtaining necessary land use certificate go on launching residential projects. Many of the projects have been stuck or delayed because of such malpractices.
A ‘certificate of commencement‘ is mandatory to commence any construction of a property. The certificate is issued by the town planning department or development authority in some cities. Construction certificate shall only be given by respective authorities only after inspection of some of the important documents like title, layout plans etc. This also means that the builder would have obtained the required licenses, sanctions and permissions for the map that are required before you can even start excavating.
Building / Layout Plan Approvals
We have always advised not to purchase soft launch projects. Builders have a habit of launching projects without necessary approvals such as layout plans. They may show you draft layout /building plans and assure you that approved layout plans shall come shortly. These draft layout plans goes under scrutiny and change many times. You may not want to end up booking an apartment in a tower whose location/height/orientation/density etc changes before final launch. You should never invest in a project whose layout plans are not approved. We advise that you simply walk away if these approvals are not in place. While the potential of a project may appear to be quite attractive to you, often such layout changes may prove your purchase decision to be a bad one.
Master Plan of the Area
Builders in collusion with authorities and newspapers keep propagating false future development news. They would later advertise these announcements and articles in their sales brochures. You should never believe such news and announcements and always look at the area’s master plan to verify. These plans are easily available with the town planning department or authority.
No Objection Certificates and other Clearances
NOC’s are required from various departments to construct residential complexes. Depending upon size and height of the buildings these NOC retirements may differ. However, these are some of the important documents that must be in place.
- Clearance from the Fire Department
- NOC from the State pollution control broad
- Environment clearance and NOC from Wildlife boards
- NOC from the Airport Authority etc.
Never undermine these clearances. Recently, In Noida region of NCR, home buyers had to wait for 2 years for their ready to move apartments because builders had failed to obtain clearances from National Wildlife Board. Read more about it here: NGT order on Okhla Bird Sanctuary
Booking Form, Allotment Letter and Builder Buyer Agreement
When you have verified all the documents mentioned above, ask the developer to provide you a copy of booking form, allotment letter and BBA. Usually allotment letter and BBA are provided to you few months after making payment of 2-3 installments that would account for almost 20-30% of your flat consideration. At this stage you do not have an option to object to any clause. Objection means cancellation and cancellation means forfeiture of earnest money. You should force the builder to provide a sample copy of BBA and go through each and every clause carefully. You can take help of a lawyer or expert to analyze the agreements. The builder will always want to avoid presenting you with a BBA at the initial stage since most of them are one-sided, and are presented to the buyers at a stage when you just cannot afford to say no to it. After having a look at the BBA, you have a choice to walk away if builder’s agreement is too aggressive. Chances are that you shall be left helpless and BBA would be slapped on your face when you have any problem after making the payments.
Documents to Check once construction is finished
Completion certificate (CC) is a documents issued by public authorities that certifies that the project is constructed as per layout plans and the other guidelines mandated by the authority. CC can be issued in phases for a few towers. A certain percentage of towers must be completed to get CC.
Occupancy certificate (OC) is the next step after CC. OC means that building is complete from all aspects and basic amenities like water, power supply, sewage connection are in place and are as per the approved layout plans.
Before Taking the Possession
Sale or Sub-lease Deed registration
Once the CC and OC are in place, it is mandatory for you to register the property with the government’s revenue department. Builder will transfer the property in your name at registrar’ office. Sale Deed defines your ownership for the said apartment. In case you have taken bank loan, original copy of sale deed shall be kept with bank.
Once the apartment is registered in your name, you should collect the possession certificate from developer. This document shall help you in tax deduction etc. Read the fine print very carefully. Builders usually include clauses to wash off their hands from this here onward. Do not accept this if you are not fully satisfied with the final product. Ask for an inspection of apartment and ensure things are as expected.
Maintenance Service Agreement (MSA)
We are doing a separate story for documents to check for ready to move in apartments/properties.