Property documents - explained

More details on what each of the documents listed in my previous entry mean and why you should seriously consider each one of them. As I said earlier, 'buyer be aware' and this is the case where you need to be 'double aware'!


Khata in the name of the seller:
This should be a original document. This document establishes that the seller is actually the rightful owner of the property. If seller doesn't have this document or not in original, just drop that property. Not worth the risk. Note that if the property has loans against it, the bank might have the original and make sure to verify that is the case.


Previous Sale deed, in the name of the seller: 
This is the document that shows the transaction that happened between your seller and the party that sold the property to your seller. This needs to be in original as well. Why? Since a person can pledge the property based on a sale deed and get loans. If the property has loans, the original sale deed needs to be with the bank. If not, the seller must have it.


Parent sale deeds: 
These documents show the older transactions that happended on the property. If you are going for a loan, some banks may not insist on these being in originals, specially, if the transactions happended 13-14 years back. However, if you with a nationalized bank, they will insist on these being in original. Why? As I mentioned for the previous document, a person can pledge the property and can get loan. Hence, nobody other than the seller should have originals of these documents. If the original is lost, there should be a police complaint and a newspaper notificaion that should have been completed. For a seller, there is no need to keep the original document since he is selling the property and relinqishing the rights to the property.


Tax paid receipts: 
These documents also show that seller is the rightful owner and has been paying taxes. If not paid properly, seller should clear what he owes so that you won't be responsible for additional payments, with penalaties. These must be in originals and up-to-date.


Encumberence certificate(EC): 
This document records any financial transactions that happened on the property. Before you buy, you need see up-to-date EC. This can be easily obtained at the BBMP/BDA offices. If there is financial obligation on the property, you need to be aware of that before you buy - since whatever payment you do should go directly to the bank instead of going directly to thse seller. If you property comes in your name with loans pending, bank will come after the property to clear the loans. This document MUST be in original.


Power of attorney documents:
In many cases, specially when builders are involved or when seller is not physically located in the place, GPA(Genral Power of Attorney) is given to third party so that transactions can be executed. If you don't see sellers name on the sale deed, then there should be a proper GPA given, which is also noterized. If the GPA holder is a family member, generally the GAP on a stamp paper is enough. However, it is always best to have a noterized document on the stamp paper. 


Approved construction plan(blueprint):
If the properety is a constructed one, seller needs to provide the BDA/BBMP approved plan. However, in most of the cases, people get a plan approved before construction but don't fully adhere to that and there will be deviations. THis is either due to changes to plan durng construction or due to encrochment(if shown in the plan, the plan won't get approved by the authorities - hence, people get approval first and then deviate in construction). What this means to you? It is difficult to get a property (unless it is an apartment) where plan and actual construction match. 

Normally, upto 10% deviation is permitted and deviation in construction is within that limit, there is not much risk. However, there are some pratical risks - for example, building has been constructed all the way to boundary wall and adjoining site is empty. When the person in the next site starts constructing, he might object since his whole passage gets blocked, blocking sunlight, air. He might even go for legal action so that extra construction is removed, which can be a costly affair. So, even with deviation, go for properties that have not voilated the boundary rules by much. These rules vary based on the plot site. For example, for a 60x40 site, you must leave 10feet clearance in the front, 7 feet on the sides etc. The plan documents MUST be in original. If the building/land is within a layout, you should obtain the approved layout plan as well.


Land mutation records and conversion records: 
It is likely that the land was originally a agricultural land and has been converted to residential purpose. The doucments which show these conversions and approvals should be present. These won't be in originals but record of conversion with approvals should be there. The mutation documents show the flow of land connversions and handovers from several years. Don't be surprised to see documents dating back to 1960s or ever older. 

No due documents from associations: 
If you are buying the property with a private layout, there will be a Home Owners Association which collcets maintenance dues. True for apartments as well. In many cases, people are deliquent and don't pay dues properly - either due to being out of station or just being neglegent. If those are not paid in-time, associations charge penalty and the dues could add up. If the seller didn't pay them, you will be held liable and if will be very diffcult to get the seller to pay once the transaction is over.

Minutes of the meeting from HOA meetings: 
It is always good to get copies of these - since if there are legal or any sort of issues within the community, the minutes will have these documented. Unlike in US, where sellers are legally bound to disclose every inch of detail so that they won't be held liable down the line for non-disclosure, here sellers don't have any obligation once sold - even though on the sale deed, they commit to property being free of legal/financial burdens, dragging the issue in a court system will drag you down. Guess now you are getting a sense for why I said this is a 'buyer be aware'(actually 'double or triple' aware!) type of situation!