Property purchase can be a tedious process. Not only is there a lot to take into consideration before making a final decision, it is also necessary to verify whether or not all the required documents are in place. While on the one hand doing this will help you avoid legal troubles, it will also warrant for the structural integrity of the property. In this article, we have curated a checklist of the approvals that you should double check with the builder to ensure that they are in place.
See also: What documents/details do you need to claim home loan tax benefits?
Under construction property
If you are planning to invest in an under construction property, here are the approvals that you should verify before anything else:
Land use certificate
The certificate stating that the land on which the property is to come up is approved for residential use is commonly issued by the local development authority or the urban planning authority. Using land that is zoned for non-residential purposes like industrial or agricultural might give rise to potential legal issues.
Building plan approval
The plan of the building must adhere to certain regulations and codes set by the government to ensure maximum safety, structural integrity and convenience for the occupants. The approval for the building plan is granted by the local municipal authority, certifying the compliance with the set codes. If the construction does not comply with the approved architectural and engineering designs, it might lead to future demolition or penalties.
Commencement certificate
After the approval of the building plan and some other initial requirements, the local municipal authority grants the builder the permission to begin with the construction process. This certificate confirms the fulfilment of all preliminary conditions and regulations and legally authorises the commencement of construction.
Intimation of disapproval (IOD)
The local municipal authority issues a document that states the conditions that must be met during the construction, that also includes provisions for various NOCs and compliances from various departments required at different stages. This document ensures that the builder adheres to safety standards throughout the construction process.
Environmental clearance
For projects that cover a large area, the Ministry of Environment and Forests issues a clearance that states that it complies with the environmental regulations after assessing the potential impact of the project on the environment. It is necessary to ensure that the project you plan to invest in is not causing any major damage to the environment.
Agreement to sell
The legal document with a detailed outline of the terms of the sale, construction timeline, payment schedule and possession date is a must between the buyer and the builder. By clearly outlining the rights and obligations of both parties, this document provides a legal basis for the transaction and protects the interests of the stakeholders.
Allotment letter
Stating the details of the property unit such as unit number, floor and area, this letter issied by the builder to the buyer confirms the allotment of a particular unit in the project. It is often a requirement while securing a home loan as it warrants for the buyer’s interest in the property.
Ready to move in property
In the case of ready to move projects, it is crucial to ensure the presence of some more approvals along with the ones mentioned above.
Occupancy certificate
The certification from the local municipal authority states that the building is complete in compliance with the approved plans and regulations and ready for occupancy. Without the OC, the building might not be considered a legal construction, making it difficult to avail essential services like water and electricity.
Completion certificate (CC)
Sanctioning the final completion of the construction process, this certification is issued by the local municipal authority when the construction has been carried out according to the approved plans. By validating the building’s compliance with local regulations, it becomes a must during finalising the property purchase.
Encumbrance certificate
With the details of all the registered transactions related to the property, this certificate confirms that the property is free from legal or financial liabilities. By ensuring that it is not encumbered by existing debts or legal issues, it provides clear ownership to the buyer.
Sale deed
With the details about the parties, property and terms of sale, the sale deed is a legal document executed between the parties indicating transfer of ownership of the property. It is also a key requirement for the registration of the property.
Property tax receipts
The receipts of tax payments confirm the up to date payment of taxes against the property. Any outstanding tax dues on the property can potentially become a liability for the buyer.
Possession certificate
This certificate is issued when the possession of the property has been handed over to the buyer. Once the buyer has proof of the physical possession of the property, it becomes easy to obtain a home loan or register the property.
Society documents
If the property is part of a housing society, the society’s registration documents, bye-laws and share certificate are essential requirements. They ensure the smooth transfer of membership in the society to the new owner and also the operation of the society under defined rules.
FAQs
What is the importance of the title deed while purchasing property?
The title deed establishes the seller's legal ownership of the property and ensures that it is free from disputes.
Why is RERA registration necessary for properties?
RERA is a legal provision that ensures accountability in the real estate sector and protects the buyers’ interests by ensuring compliance with regulatory standards.
How does the encumbrance certificate benefit property buyers?
Encumbrance certificate sanctions that the property is free from legal or financial liabilities that the buyer might have to bear eventually.
What is the role of NOCs in the property approval process?
NOCs from essential departments like fire, water, electricity and others are required to ensure that the project meets safety standards and does not pose risk to the occupants.
What is the importance of the sale deed in the property transaction?
The sale deed is a key legal document that validates the sale of the property and mentions details of the stakeholders, the property and terms of sale.
Why should I ensure that the tax receipts are in place while purchasing property?
By verifying the timely payments of all taxes against the property, the buyer can avoid any outstanding liabilities they might have to bear.
What is the difference between occupancy and completion certificates?
While the CC claims that the construction adheres to the approved plans, the OC certifies that it is fit for occupancy by safety standards.
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