Homeowners often consider selling their property when the market conditions are favourable to earn a profit. Other reasons for selling a house may be relocation or other personal reasons. The decision to sell a house must be backed by careful consideration and planning. Selling a property involves legal procedures, including property valuation, agreement preparation and other crucial steps.
See also: What happens to a lease if the property is sold?
Property sale: Definition
The sale of a property refers to the transfer of ownership in exchange for a price paid or promised or partly paid and partly promised, according to Section 54 of the Transfer of Property Act, 1882. When a property is sold, there is an absolute transfer of property rights.
Property valuation
Before selling a property, proper valuation is the first step. It involves determining the market value of the property based on location, size, age, amenities and other factors. The seller can self-assess the property or approach a real estate agent to arrive at the right price based on the current market and locality trends.
Obtain NOCs and clearance from local authorities
If your property is located inside a housing society, it is necessary to check the procedures before selling the house. You should obtain the necessary permission or no objection certificates (NOCs) from various authorities, including housing societies and municipal corporations. An NOC proves that the society or the concerned authority has no objection to the sale or transfer of ownership.
Obtaining an environmental clearance may be necessary. This may be applicable if the property is located near an environmentally sensitive zone. This will prevent legal disputes for the seller.
Clear outstanding financial dues
Make sure there are no outstanding payments, such as utility bills or maintenance charges, before completing the property sale. Similarly, if there is a mortgage on the property, contact the bank or lender to clear the dues and release the documents.
Resolve legal disputes
In case there are any legal disputes, the seller must ensure that these issues are addressed before the sale. This will help prevent legal complications during the property transaction.
Hire a legal professional
One can take the help of a legal professional specialising in property matters. A qualified lawyer would provide the right knowledge regarding the laws and regulations. Take the help of a legal professional to draft the sale agreement.
Notary
A notary, an official with legal authority, can verify the authenticity of the documents throughout the sale process.
Collect all the documents
Before selling a house, have all the documents that prove absolute ownership and the right of the individual to sell the property.
Title deed
Check the authenticity of the title deed. Make sure there are no legal encumbrances. A sale deed is an important legal document for transferring property ownership. It must be reviewed by both the parties. The sale deed specifies details, such as location, property dimensions, amenities, terms of the sale, price to be paid and the signatures of both parties.
Encumbrance certificate
Apply for an encumbrance certificate from the local sub-registrar’s office. An encumbrance certificate proves that the seller has full ownership rights, title and interest in the property. It certifies that the property is free from any financial or legal liabilities.
Building plan
A building plan should be obtained from the local authority. It has the approved layout and design of the property, including the location, dimensions and construction materials.
Property tax receipts
Prepare a record of all the property tax receipts and utility bills. This establishes that there are no financial dues to be paid to the local authorities.
Completion certificate
A completion certificate is issued by the local development authority or municipal authority and proves that the construction was completed as per the approved plans.
Occupancy certificate
An occupancy certificate is issued by a competent authority and establishes that the property is suitable for occupancy.
Succession certificate
A succession certificate is issued by a court to the successor of a deceased person who has not prepared a will. It establishes that the seller is the legal heir to the inherited property.
Khata certificate
A khata certificate can be obtained from the municipal authority or local government. This certificate is proof that the property has been registered in the seller’s name and that all the taxes and other charges have been paid.
Get bank approval
If the property seller has an outstanding home loan, they must get the required approvals from the bank or financial institution before selling the property. When a property is purchased through a home loan, the lender has a lien on the property. Thus, obtaining permission from the lender is necessary.
Comply with tax regulations
A property seller should have an understanding of the tax implications of owning a property. These include:
- Capital gains tax is levied on the profits gained from the property sale.
- Tax deducted at source (TDS) is applicable during property transactions, which the buyer is required to deduct and deposit to the tax authorities.
- The different types of Goods and services tax (GST) are applicable based on factors, such as property type, whether it is under construction or ready-to-move-in property.
Execution of sale deed
- The sub-registrar of the area is responsible for the verification and registration of the sale deed. This ensures that the property transaction is legally valid.
- The sale deed should be registered with the state government and the stamp duty and registration charges should be
- After the registration, the property ownership is officially transferred to the All the parties must have a copy of the registered sale deed.
Home staging
Home staging is a crucial step to making the right impression on prospective buyers. It involves preparing and presenting a house or a property to attract buyers. Declutter the house and strategically arrange the furniture. Highlight the key features of the house and undertake necessary repairs, such as plumbing or seepage issues. Renovating the house can elevate the selling price.
Finalising the property deal
This involves handing over the possession to the new buyer on a specified date, based on the terms and conditions agreed upon.
Any pending financial transactions related to the sale must be completed. Ensure that the buyer has made all the required payments.
Responsibilities after a property sale
Update property records
The local authorities should be notified about the change in property ownership. This includes updating the property records with the government department, including the property tax department and the municipal corporation.
Inform utility service providers
Notify the utility service providers, such as water, gas and electricity providers. This ensures a smooth transition of services to the new property owner.
Save necessary documents
Keep a record of all sale-related documents for future reference, including the sale deed, NOCs and tax-related documents.
FAQs
How to sell a house in India?
The process of selling a house in India involves various legal steps, such as property valuation, preparing a sale agreement and obtaining necessary approvals from the bank, in case of a home loan.
How to prepare a property for sale?
Start by decluttering and cleaning the house and undertaking necessary repair work. Make sure to have all the necessary documents ready, such as the title deed, NOCs from relevant authorities and completion certificates.
What are the various steps involved in selling a property in India?
The various stages involved in property sale in India include property staging, property valuation, document verification, approaching a legal professional, seeking necessary approvals from the authorities and executing the sale deed.
What is the first step to selling a house?
Before selling a house, it is necessary to prepare the house to attract prospective buyers. Start by assessing the property’s value to find the right selling price based on the area trends.
How to advertise a property for sale?
You can advertise a property for sale by listing it on an online property portal. Gather all the property images and details. You can also take the help of a real estate agent.
| Got any questions or point of view on our article? We would love to hear from you. Write to our Editor-in-Chief Jhumur Ghosh at jhumur.ghosh1@housing.com |
