Why should you never give original documents to a broker?

Most people consider hiring brokers for property transactions. Brokers or real estate agents facilitate property buying, selling, or renting, making the process faster and more convenient for both parties involved in the transaction. While brokers’ play a key role in property dealings, there are cases of fraud and misuse of documents. A common mistake people make is handing over their original property documents to their brokers, resulting in financial and legal troubles. Original property documents, including the sale deed and title deed, are legal proofs of an individual’s ownership over the property. Hence, such documents must never be handed over to brokers.

Why are original property documents so important?

Keeping original property papers securely is crucial. These documents may be required for various purposes, and losing even one of them can pose significant legal and financial risks. Here are some of the reasons why original documents are necessary:

• Proof of ownership: Documents such as sale deed, title deed, etc. establish ownership over a property. Without these documents, a property owner cannot prove that they are the rightful owner in the event of disputes or property sales.
• Provides legal validity: Original property documents are legally valid and recognised by courts, registrars and government authorities. In case of property registrations, property disputes, etc., photocopies may not be relevant. 
• Facilitating property transactions: When undertaking any property transaction, such as selling a house, mortgaging, or transferring the property, the owner requires the original property papers. Banks and lending institutions ask for originals when sanctioning loans. 
• Safeguard against fraud: Keeping original documents protects the property owner from potential fraud, such as forgery or illegal transactions.

Role of brokers in property transactions

Many people prefer approaching a real estate agent for selling or buying a house. These agents or property brokers are individuals or entities that serve as intermediaries between buyers, sellers, or tenants during property sales or rentals. Brokers facilitate the smooth execution of property deals and provide assistance throughout various stages of the property selling, buying or renting process. 

For a property seller, these stages include:

• Listing the property and finding reliable buyers
• Negotiating prices and possession timeline
• Coordinating between seller and buyer for agreement
• Coordinating with government offices for property registration 
• Coordinating with banks or financial institutions for home loans

Why should original documents not be given to brokers?

It is crucial to understand that brokers do not have any legal authority over the property. While brokers may assist with activities such as finalising the sale agreement and registering the sale deed, they do not have any rights over these documents. 

Property brokers cannot ask for original documents from sellers. However, they can view these documents in the presence of a seller to verify their authenticity. Some reasons why original documents should not be given to brokers are:

• Damage or loss: Original property documents are valuable documents and handing them over to brokers may lead to risks of damage or loss. 
• Unauthorised transactions: These are risks associated with brokers creating fake documents using originals to conduct unauthorised transactions or claim ownership of the property. 
• Fraud: Providing originals to brokers can increase the risk of fraud, document misuse, or identity theft. Since property documents serve as legal proof of ownership, entrusting them to unreliable brokers can result in the seller losing control over their property. 

Hence, to avoid such risks, property sellers must not hand over their property documents to brokers. Instead, they can hand over the photocopies and have the documents verified in their presence.

Documents required for property sale

Some of the vital documents required for property sale include:

• Sale or title deed: The sale deed document, also known as the title deed or mother deed proves legal ownership of the property. It is the main proof of the property sale or transfer. 
• Encumbrance Certificate (EC): This is a crucial document necessary in case of resale properties. Issued by the relevant government authority, the EC is required to prove the property is free from any legal claim or financial dues. 
• Khata certificate and extracts: The Khata certificate is a proof of entry in the local municipal committee’s records and establishes that the property has been constructed as per the approved plan. It is required for property registration and for any property transfer. 
• No-Objection Certificates (NOCs): NOCs for electricity supply, water supply, and other relevant services may be required from the relevant municipal authority or housing societies. 
• Possession Letter: This document confirms the transfer of property from the builder to the buyer on the date specified in the letter. 
• Completion Certificate: The completion certificate, issued by the relevant municipal authority, confirms that the building has been constructed in accordance with local rules and regulations.
• Occupancy Certificate: This document is issued upon completion of the construction in accordance with the sanctioned plan, and the property is deemed ready for occupancy.

Who can ask for original property documents?

When planning to sell a house, the property owner must ensure they have obtained all the required documents. This will ensure a smooth property sale procedure. 

Buyers: Keeping original documents ready before engaging in any property transaction will prove to the buyer that the seller has the right to sell the property. Potential buyers may ask for original property documents to check their authenticity. 

Banks and financial institutions: When approving home loans, banks and financial institutions ask for original property documents. The documents serve as collateral and the lender gets a legal right over the property until the home loan is repaid by the borrower. 

Government authorities: One of the instances where original documents will be required is at the time of property registration at the sub-registrar’s office.

Lawyers: When conducting legal due diligence on a property, legal professionals may request original property documents for verification purposes. However, one can provide certified copies or share originals under supervision. 

Legal heirs: During the inheritance or transfer of property upon the owner’s death, legal heirs will require original documents to claim their rights or share in the property.

Can you sell a property without the original documents?

It is not advisable to sell a property without the original documents in place as it can lead to legal risks. Potential buyers may ask for these documents before finalising the transaction. In cases where the original documents are lost, one should follow the proper legal procedures, including lodging an FIR for the retrieval of the lost documents. One should also submit an application to the sub-registrar’s office to get a duplicate copy.

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There are better alternatives to handing original documents to property brokers. These include providing certified photocopies or notarised copies. Property sellers may consider dealing with brokers and buyers directly through in-person meetings. This reduces the chances of damage, loss or misuse of documents. Moreover, digital escrow services are also available. These services are provided by agents who act as neutral third parties to facilitate secure transactions. 

It is advisable to keep property documents securely in a safe or a bank. Furthermore, when approaching brokers for any property transaction, sellers must check their credibility, including their RERA-approval status. This will significantly reduce the risks of fraud and ensure hassle-free property dealings.

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