With a mind full of uncertainties and a heart filled with a mixed bag of emotions, the decision to buy a home can be an expensive and critical affair. From getting duped by builders to getting forged by financial institutions, each step in the right direction counts for your future. Therefore, gaining sound knowledge right from choosing an appropriate location and property for yourself to applying for a home loan, you undergo a lot of documentation and perplexing legal formalities. To streamline your entangled thoughts, we bring you this article at the length to discuss the checklist for buying a home and the legal formalities associated with it.
A Checklist for Buying a Home
While planning to buy your dream home, you must first choose an appropriate location that meets your requirements – household or investment. You can then find the project in the same location that offers premium facilities at an affordable price. Check the builder’s reliability and credibility to ensure you invest your hard-earned money with a builder who has a successful track record of delivering projects in a timely manner. Once you have decided to invest in the project for your dream home, go ahead and visit the property in person. Evaluate the construction quality, amenities, and vicinity to make sure that all essential facilities, including shops, schools, hospitals, parks, malls, etc., are in proximity.
Furthermore, you can find out the resale and rental values of the area to understand your future gains. You must also strictly scrutinise the security, privacy, and safety protocols provided in the complex. You should also investigate the quality and legal checks to make sure your investment is done right. Now that you are done with the process of evaluating, scrutinizing, and investigating, you can now finalise your property and proceed further with the legal approval checklist received by the builder, which must be thoroughly read to understand the probabilities and consequences that may occur in the future.
The Legal Homebuying Checklist
The home buying checklist of legal documents is a precautionary measure that you must take as investing your hard-earned money in a project full of false promises will be an injustice not only to you but to your family too. The homebuying checklist of legal documents and approval required by a builder to construct a property will rescue and save you from investing in any such exploiting projects. So, let's learn about the legal documents that you must go through before buying your home.
The Sale Deed
The Sale Deed, also known as the conveyance deed or final deed, is the most important legal document which states the successful sale of the property and the transference of ownership from the seller to the buyer. It is also a document where the seller promises to pay for the damages if by any chance a dispute arises in the future regarding ownership of the property. If any party (seller or buyer) is in default, a penalty can be charged to the non-offending party to ensure that the sale deed is not affected. Besides, the final deal also mentions the details of advance payments and mode of payment, the time frame for the transference of ownership, and the basic details like name, age, and current address of both the seller and buyer.
The Mother Deed
The Mother Deed is a document that determines the ownership of a property. This deed is generally used for tracing the history of ownership of the property. It also acts as legal evidence to trace all the previous owners and investigate them in the previous records to ensure that the flow of owners in continuous and unbroken. find out any missing links. If you notice any missing links, immediately scrutinize, and verify them with the registering office and revenue records. You must also check the right to transfer of each owner thoroughly to avoid harmful consequences.
The Sale and Purchase Agreement
The sale and purchase agreement is a legitimate document drafted by a qualified advocate which constitutes the agreed-upon terms and conditions between the buyer and seller of the property. Each agreement must include the present owner and property details such as title, property identification number, Khata and Khata numbers, proof of approval received from the government authorities, encumbrance certificate, and outstanding charges. As the document is legally binding on both parties, it must be drafted with utmost care. The same is executed by the seller and buyer on a non-judicial paper preceding the sale deed.
The Building Approval Plan
The Building Approval Plan is one of the most important documents that is designed by the builders which includes two factors – a) The Building Plan and b) The Layout Approval. This plan is sanctioned by the government authorities under the provisions of the Building Bylaws, Master Plan, and Local Body Act. Without approval, a builder can neither build the building nor sell the property. However, due to unscrupulous acts by the builders, these properties are built by the builders, breaching the approved plan, trapping, and bankrupting innocent homebuyers, which leads to an increase in fraud cases. Therefore, it is paramount for homebuyers to check the plan approval status before investing in any project.
The Possession Letter
The Possession Letter is a letter authored by the builder with the expected possession date for the homebuyers’ under-construction unit. It is proof of promise made by the builder expressing its liability towards the homebuyer for delivering the unit within the stipulated date. However, the same does not serve as evidence to claim one’s ownership of the property. There are also instances where the builder issues the letter granting possession of the property. In this case, the letter acts as a testament to the transference of the property, which signifies the ownership of the homebuyer on the property.
The Completion Certificate
The Completion Certificate, also known as the Occupancy Certificate, is a certificate that demonstrates that the building has been examined by the government authorities upon completion and complies with the laws listed by the municipal corporation and local authority. This certificate is a proof of property transaction and can be produced in the court of law for claiming the ownership. However, Occupying the property without an occupancy certificate but with the consent of the builder could be dreadful, which may lead to a penalty or even eviction from the property. Therefore, it is advisable to occupy the property only after receiving the Occupancy Certificate or Completion Certificate.
The Khata Certificate
The Khata Certificate is a crucial document that includes details about the property such as size, location, carpet area, property identification number, etc. It is required during the home buying process, especially while applying for a home loan, electricity, and water supply. The Khata Certificate cannot be used as evidence to claim ownership; however, it identifies the owner as a taxpayer and thus serves as the record for tax payment to the municipal corporation.
The Allotment Letter
The Allotment Letter is a crucial document that determines the partial ownership of the homebuyer on the property. It is issued by the builder after receiving the booking amount for the unit. The letter includes the details such as payment, construction schedule, amenities, terms of construction, the final amount payable to the builder, and liability owned by the builder concerning delivery date in case of delay.
The happiness of owning a home is priceless. Therefore, you must follow each step in the home buying process to avoid getting trapped in unscrupulous acts. Ask the builder for all the above-listed documents before investing in any project. If, by any chance, the builder refuses to provide the requested documents, avoid investing in the project and start looking for a credible and reliable builder.