Legal Documents required for Purchasing a Property

7. Sale agreement

This legal document records all the information about the property - the terms and conditions, possession date, payment plan, specifications, facilities etc.

The agreement is one of the most important legal documents that holds the developer accountable for the construction of the property. This document needs to be produced in original for property purchase and while applying for home loan.

8. Allotment Letter

An allotment letter is one of the most important certificate that needs to be produced in a bank before applying for a home loan. It is issued by a developer or the housing authority, listing the description of the property and an account of the amount paid by the buyer.

An allotment letter is issued on the letterhead of the housing authority while a sale agreement is a document made on stamp paper.

An allotment letter is issued only to the first owner and other owners can ask for a copy of the original papers.

9. Possession Letter

This legal document is provided by the developer to the buyer and sets a date on which the former will grant the latter the possession of the property. The original copy of this document needs to be shown while applying for a home loan.

10. Payment Receipts

The original payment receipts need to be provided by the developer to the buyer if you are buying a property. If you are buying a resale property, ask for a copy of all the receipts so that it can be produced in the bank.

11. Property Tax Receipts

Property owners need to pay taxes. Make sure that the previous occupier/owner had paid property taxes and no pending dues are left. It also establishes the legal status of the property.

12. Encumbrance Certificate

An Encumbrance certificate establishes that the property does not have mortgages or legal dues pending for payment. This is one of the most important legal documents that need to be provided to the bank before applying for a loan. In India, Form 15 is issued if the property has encumbrances against it; else Form 16 will be given to the owner clearing the owner of all encumbrances.

13. Completion Certificate

This legal document is essential for obtaining a home loan. This certificate reiterates the fact that the building has been constructed according to an approved plan.

14.Certificate of Occupancy

An occupancy certificate is issued to the developer by the local authority to establish that the building is ready for occupancy and the construction has been done as per as established plan.

To be interested in learning about legal updates in today's society Examine how the National Company Law Tribunal manages business matters.

Documents are one of the main checklist to be considered. Just like that, there are many checklist before buying a property. Read our blog to know more.

And find out how can you estimate property value.

FAQs:

Q. What is the most important document when buying a property?

A. The sale deed is the most important document in any property purchase. It officially transfers ownership of the property from the seller to you and requires registration to be legally valid. Without a recorded sale document, you will not be recognized as the legal owner, and future claims to the property may arise. This document acts as conclusive proof of ownership, granting you all of the property's rights.

Q. Besides the sale deed, what other documents should I check?

A.

• Title Deed: This establishes the seller's legal ownership over the property.

• Encumbrance Certificate (EC): This assures that the property is free of any legal claims or dues.

• Property Tax Receipts: Verify that the seller has paid all current property taxes.

• Building Approvals: Check for approved building plans and occupancy certificates (if applicable).

Q. What if the property is inherited?

A. Inheriting property requires its own set of documentation. If a will exists, it expresses the deceased's preferences for ownership transfer. In some situations, a probate order from the court may be required to confirm the will and formally designate an executor to manage the estate. A partition document is necessary when an ancestral property is shared by many heirs. This legal document formalizes the ownership rights of the inheritors, ensuring a transparent and recorded transfer of property.

Q. What happens if a loan is involved?

A. When a loan is involved, the lending institution will have additional requirements beyond typical property documentation. They will most likely request a property valuation report from a recognized professional to determine the property's market value. This helps determine the loan amount they are willing to grant. You will also need to provide loan-related documents, such as the loan agreement, which outlines the terms and conditions, interest rates, and repayment schedule.

Q. Are there any documents I need to provide as a buyer?

A. While the seller handles the majority of property-related paperwork, as a buyer, you must provide some in order to register the property in your name. These usually involve verifying your identification and address. Common instances of ID proof include an Aadhar card, PAN card, passport, voter ID, or driver's license, as well as utility bills (electricity, water), bank statements, or rental agreements.

Q. Should I consult a lawyer when reviewing the documents?

A. Although legal consulting for document review is not required, it is strongly recommended, especially for first-time home buyers. A lawyer's knowledge helps ensure that the documentation are in good order and identify any potential concerns that may impede the transaction or affect your rights as the owner. Their advice can provide peace of mind throughout the process, ensuring a simple property purchase.

Also Read: Documents Required for passport in India