What are the documents required to check when you buy a plot?

Here are the important documents you need to check when buying a plot of land.

Are you looking for buying a plot? Plots have several advantages over flats. They generally require a low initial investment—buying a plot is cheaper than purchasing a furnished flat. However, regardless of the property type, thorough due diligence is needed. This involves verifying if the plot has all necessary official documents. The absence of any document may render the transaction illegal, potentially leading to future litigation.

When you decide to sell the plot in future, missing documents may raise doubts about its legitimacy or risk of fraudulent activity. This guide outlines the essential documents you should get from the seller once you register the plot after making the full and final payment.

 

Non-agricultural land use certificate

India is predominantly an agricultural country, and all land is initially considered as agricultural. For construction purposes, you must convert agricultural land to non-agricultural one based on specific conditions. Non-agricultural land classifications include the following:

  • Non-agricultural land for residential use
  • Non-agricultural land for commercial use
  • Non-agricultural land for warehouses/industries

The land use certificate will specify the purpose for which you are buying the land. You should insist on inspecting and verifying it. 

 

Land deed

Also known as 7/12 document, you should get this from the current and previous owners of the property. The 7/12 land document comprises Form VII and Form XII.

  • Form VII includes details, such as the record of rights of the owner, ownership details, tenant information, revenue obligations, and other land-related details.
  • Form XII contains information about crops and the area covered by them.

To buy a plot in Maharashtra, you need a 7/12 certificate, but it can be from any state.

 

Original sale deed

This legal document outlines the terms and conditions of the plot purchase. Also known as title deed, no plot purchase deal is complete without the sale deed signed by both seller and buyer and registered.

A sale deed includes:

  • The price at which the property will be sold
  • A description of the plot
  • Names of the property owner(s)
  • How the plot ownership will be transferred once payment is completed

Before buying it, review the sale deed with a lawyer. If any details are missing, request them from the seller. For example, Johan Shah’s ancestral land was in the name of his father and two uncles. After his father’s death, the uncles attempted to sell the plot without the signature of the third owner (Johan Shah’s father) or his legal heir (Johan Shah). This irregularity was identified during due diligence, preventing a deal that could resulted into litigation.

 

Legal heir certificate

If the land you are buying is from a party where the original seller is deceased, the seller you are dealing with should possess a legal heir certificate.

 

Encumbrance certificate

Any property you purchase—whether an apartment or a plot—should be free of encumbrances. This certificate can be obtained from the sub-registrar’s office and is valid for a specific period. It is essential for securing a home loan, as banks will not entertain loans for properties with litigation issues. Only registered properties receive an encumbrance certificate, so obtaining it is a double check for the legal registration of your property.

 

Power of attorney

If the plot is being sold by someone on behalf of the owner, ensure the power of attorney (PoA) document is in order. This legal document grants authority to the PoA holder to manage the sale process and finances. Verify the PoA document thoroughly with a lawyer to avoid cheatings by a middleman.

 

No-objection certificate (NOC)

Verify if the plot has no-objection certificates (NOCs) from all relevant local bodies, such as the municipal corporation and environmental authorities. Obtain a no-dues certificate from the municipal body for property tax and from the respective bank if there was a loan taken to purchase or maintain the plot. Ensure that property tax on vacant land is paid; if it is unpaid and the sale deed is transferred to the new owner, they will be responsible for any outstanding payments and penalties.

 

Celebrities who have recently invested in plots

Suhana Khan Alibaug
Kriti Sanon Alibaug
Amitabh Bachchan Ayodhya, Alibaug
Salma Khan  Carter Road, Bandra

 

Housing.com POV

Buying a plot of land or property is a significant investment. To maximise your gain, you must perform due diligence by reviewing all relevant documents with a lawyer. Any missing documents or explanations from the seller about their absence should be considered as red flags. Do not proceed with the transaction if there are unresolved issues.

 

FAQs

How do you decide if buying a plot is the right choice?

Consider factors such as location, cost, connectivity, future prospects, and clean documentation.

What is a popular plot measurement unit used in North India?

Bigha is a commonly used plot measurement unit in North India.

Do plots attract property tax?

Yes, property tax is applicable to plots as well. Ensure all previously paid tax receipts are reviewed, as any outstanding tax will become the responsibility of the new owner if the sale deed is executed.

How can you check plot information online?

You can check plot information online by visiting the Bhulekh website for your state and reviewing the Bhunaksha.

What is the role of banks or NBFCs in due diligence?

Verify with the bank or NBFC if there are any outstanding amounts against the plot you are considering buying.

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
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