Land purchase due diligence checklist 2025: Points to follow

While every individual dreams of a house once in his/her lifetime, many people still prefer to buy or invest directly in land. Land accounts for the major cost component of any real estate purchase and has a far higher rate of return than other property types. If you buy a land, you can build a house, open an office, put a warehouse or simply grow crops. It gives the buyer the freedom of choice, in terms of design, layout, floor plan, etc. The different uses that a land can be used for decides the different prices that it can command. However, one must do thorough due diligence when buying land.

Also read all about pros and cons of investment in land

Why is it important to do your due diligence while purchasing land?

In a land purchase, a buyer invests almost all his life savings. Hence, you have to be doubly sure that it is legally safe to invest in the land chosen by you.

3 important points to follow in land purchase due diligence checklist 2025

1. Buy land from trusted source

• If you are searching for land for investment, it is recommended to buy from someone you know eliminate uncertainty.
• Take the help of real estate agents or property consultants such as Housing.com, who are well-aware about the locality where the land is present so that you don’t end with a bad deal.
• You can also buy land from reputed developers who are selling plotted land many areas across India such as Alibaug, Goa and Ayodhya.

2. Verification of original documents for land purchase

• Before proceeding with purchasing a land parcel check if the person selling the land is the owner and has all necessary rights to transfer ownership of property to you.
• Show all documents including agreement to sale deed, property tax receipts etc. received from the seller to a lawyer and get it verified. Get the owner also verified by checking details of his id – PAN Card, Aadhaar card etc.
• You can reach out to neighbours in that area to know more about the land owner and any prevalent problem that you ought to be knowing.

See also: All about gift deed

3. Preparations for due diligence

• Start from basics. Always buy land from trusted source or from people who you know. In case you are searching for land for investment, do a search also with the person you know to eliminate uncertainty. Always engage with agents or property consultants who are well-aware about the locality where the land is present so that you don’t end with a bad deal.
• If you have chosen a land for investment, as the second step set up a meeting with owners of the land. In addition to checking property papers, its a good idea to check their proof of identity such as PAN card, ID card, registration certificate etc.
• It is also a good practice to meet the neighbours and check with them about the land and any dispute that is going on.

11 ways to do due diligence 

Mentioned are different ways- all which you should implement while doing due diligence.

See also: How to calculate stamp duty?

1. Check sales deed

As part of the due diligence process before buying land, it is advisable to trace the title for the previous 30 years, keeping in mind the complexities of land documents and the limitations involved in claiming property rights. You must acquire the sales deed of the property or land you purchase to ensure it does not belong to any developer, society or others.

2. Property tax receipts

Check if all property tax receipts have been paid and there is no arrear on them. If the previous taxes are not cleared before you buy the land, note that you may have to pay the property tax once you become the land owner including the defaulted ones.

See also: All about UDS full form

3. Check for mortgaged land or pledged asset

It is crucial to ensure the land you buy is not mortgaged by the seller at the time of you buying it. The buyer should ensure that the seller has paid back all the amounts due on the land. A release certificate from the bank is essential, to determine that the land is free from all debts.

See also: All about the legal documents required for purchase of property

4. Examine power of attorney used for buying land

Many times, land is sold through a person holding a power of attorney (POA) on behalf of the owner.  This power of attorney for property should be closely examined, to ensure that it is the same property that is being sold. There are times when it may be necessary to sign certain documents within a short period of time and delaying the same, may usually cost you. For such situations to be avoided, you can authorise someone else to sign on your behalf, to make things easier.

5. Check for approvals and permissions for land purchase

If the property / land forming part of the sale transaction already has structures or buildings, it is advisable to verify whether the approved plans, necessary permissions and NOCs are in place. Factors such as heritage rules, set-back for road widening, which will apply to definite buildings, should also be considered.

See also: All about conversion of agricultural land to non agricultural land

6. Local laws for land purchase

The purchaser of the land should ensure that the local laws / rules do not impose any restrictions on buying land. For example, in Karnataka, a non-agriculturalist (who does not own agricultural land), companies, firms and persons with an income over Rs 25,00,000, cannot purchase agricultural land. However, such restrictions are relaxed in few other states. Hence, it is important to take advice from a local lawyer, before purchasing land.

See also: All about prohibited property

7. Tenure 

The tenure of the land should also be considered, while purchasing land. If the land is under lease and the excess tenure of lease is short and if there is no provision for renewal on the same old rent, the additional rent may be payable by the purchaser of the land. There is also a high possibility that there may be no renewal clause for the property.

8. Pledged asset

The seller might have taken a loan from a bank, by pledging or mortgaging their land. The buyer should ensure that the seller has paid back all the amounts due on the land. A release certificate from the bank is essential, to determine that the land is free from all debts.

9. Land measurement 

Buyers are advised to measure the land, before registering it in their name. To ensure that the measurements of the plot and its borders are accurate, the buyer should take the help of a recognised surveyor. You can also compare for accuracy, by acquiring the survey sketch of the land from the survey department.

See also: All about land measurement units in India

10. Floor space index (FSI)

FSI indicates how much construction can be done on a piece of land. FSI is determined by the state’s town and country planning department. It also depends on the location of the plot. You should check with the seller or the property owner, regarding the amount of FSI allowable on the land.

Also, it is very important to involve a property lawyer, for the verification of the documents and the legality of the project.

11. Zone regulations

Check with the municipal body that the land that you are investing in is within the permissible zoning guidelines

 4 different ways to do due diligence when buying land

1. Go for a physical site visit

When you do a site visit, you will know what to expect, how is the location and other minute details. You would also know about who your neighbours will be, a key point while making the decision. You can also see for yourself if there is any kind of encroachment on the land that is being sold to you or any future project that is all set to come through it.

2. Check the Bhu Naksha of the area

You can get all latest details of the plot that you are looking at if you check into the state’s online portal for Bhu naksha. You can get it offline too by visiting the IGR office.

3. Checking for land legal documents at sub-registrar offices

For conducting such a search, fill the search application form and submit to the SRO.  Along with the form, attach a copy of the title deed and your proof of identity.

This search reflects the transactions (change of ownership through deeds) and encumbrances (legal dues) with respect to the land proposed to be acquired. Each state has a different methodology, to carry out searches at the offices of the sub-registrar (deed-registering authority). For example, in Bengaluru, the sub-registrar issues the encumbrance certificate (search report) whereas in Maharashtra, an advocate or person experienced in carrying out manual search in the sub-registrar offices issues the report. One has to check with the concerned authorities for the legal documents, before going ahead with the property deal.

4. Public notice for land purchase

Before purchasing any property, it is always advisable to place a public notice in local newspapers (preferably in English and as well as in the local language daily newspapers), inviting any claim over the land proposed to be purchased. This will help to know if there are any claims or third-party rights over the land.

See also: Know all about property transfer after death of owner

Housing.com POV

While buying any property, due diligence is very important. When buying a land, ensure that all the above mentioned pointers are checked so that your investment is safe. What is recommended as in the case of property, opting for purchase of land from a reputed brand is always recommended because there is an increased chance of the titles being clear, and thus your investment safe. Prior to concluding the sale transaction, it is advisable to verify if the original title documents with respect to the land transaction are in place. Remember to collect original documents at the conclusion of the sale. This is to ensure that the seller has not created any third-party rights / charge and parted with the originals.

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