It is  really nice to  have a dream house/flat  and  it is the cherished desire of every one to  own  their own home, whether it is a big one or small one. In cities builders are coming out  with a number of new projects, promising  various  facilities, which one could not think of earlier. It is the top end model of flat/house, like a top end model of a car.  Since  you will be investing your hard earned money once in your life time on the dream house/flat, you should be careful in  selection i.e. the selection of the location, selection of the project/land and the selection of the builder from whom you wish to enter into  a contract to buy a land or flat. The legal dictum says buyer beware. Therefore, the purchaser has to make doubly sure before finalising the deal that you do not invite any trouble or enter into litigation because of a defective title to the property, or absence of approved plan or builder not completing the project etc. A check list of items to be verified are  given below:

Marketable title
“Marketable title” means a title or ownership  which is clear and free from  reasonable doubts and is a title good against everybody.  A buyer is not bound to complete  the sale if there are defects in the title to the property which are material and latent, i.e. had  the defect been known earlier one would not have entered into the contract of sale.  So it is necessary that the ownership of the property - with reference to the  chain of title deeds are verified by a reputed legal Adviser. It is advisable to investigate the title for a minimum period of 30 years unless the circumstances warrant production of documents beyond 30 years. In cases where the allotments of the  plot has been made by the  competent Development authority in the State like  DDA in Delhi, BDA in Bangalore, and MMDA in Chennai, then, the chain of title  will be sufficient from the allotment date, along with khatha/ownership certificate.

It should not be assumed that the title will be 100% clear when a project is stated to be approved by a Housing Finance Company or Bank. An independent  scrutiny of title deeds by a reputed Advocate of your choice, who should also  verify the records of title to the said property from the  concerned Sub-Registrar’s office, is necessary for following reasons:

The builder might have  created a charge on the  entire or part of property by availing a loan against the said property.  So, one must actually call for the original  previous chain of title deeds for perusal (either by  you or by your lawyer) and  must obtain a declaration from the builder/owner  that the property or any portion thereof is not  charged to any body and the property is freehold property.

Such declaration should also include that the property  has not been acquired by the government or any notice of acquisition has not  been issued

You must also ascertain if the builder is the owner of the property or he holds only power of attorney on behalf of the owner. In most of the cases builders enter into agreement with land owners, (along with power of attorney from the owner in some cases)  to build flats on the land provided by the owner with a percentage of share to the builder. You must verify that the flat which you propose to buy falls within the share of the builder and that there is no dispute between the builder and the real owner of the  land.

While scrutinising the title deeds, one must see if any minor’s interest is involved and if so whether the minor’s interest is properly covered. If any minor is involved in any of the previous sale transactions,  he can raise a dispute after attaining majority. If the minor’s interest is not adequately covered.

If any one of the previous title deed in the chain is missing, it should be properly explained.  Loss of title deed is not a defect if the loss can be explained satisfactorily. Where there is a loss of immediate previous title deed, caution should be exercised and it is always better to avoid  dealing with   such property.

You must also  verify the credentials of the builder before entering into any deal with him and if you are  dealing with any middleman/broker,  it is advisable to  have a direct meeting with the original owners/builders before finally parting with any money towards advance.

Power of Attorney
It may happen that the  owner of the property may not be in a position to come and execute and register the sale deed and he executes a power of attorney in favour of another person, for executing the sale deed on his behalf. Similarly  some builders/developers develop the lay out on a land belonging to a third party after getting a power of attorney from the owner for executing the sale deed of the plots thus developed.  By this process, they avoid  stamp duty and registration charges in getting the land first transferred in their name.  In such cases, one should ascertain if the  person who has executed the power of attorney is alive on the date execution of sale deed by the power holder.

However, in some places, like Delhi, the system of buying properties on Power of attorney, without registering the sale deed is in vogue, to avoid stamp duty and registration charges.  It is a risky proposition, since  a power of attorney (even if it is an irrevocable one) comes to an end on the death of the person who has issued the power of attorney.  It is always better that you  get the sale deed registered, instead of keeping the deal open under the power of attorney for a long period. Usually banks and HFC’s  do not  grant loans against  properties held under power of attorneys only.  (some HFC’s  and banks  do allow loans after taking collateral securities, in addition to the property purchased under the power of attorney)

Defect in property
Defect in property is different from the defect in title.  The defects in property  can be seen on an inspection of the property.  While  visiting the property site  you must  carefully  see the neighbourhood and approach roads.  If you are going in for investment purposes,  plots of odd size and  plots facing streets ending with the said plots should be avoided.

Land Use & Plan Approval
You should carefully verify the land use, i.e. whether it is an agricultural land and if so, whether the necessary order from the State Government/approved authority has been obtained for  converting the said land to be used for residential or commercial purpose. The advocate who is sifting the title deeds, should also verify the genuineness of the  order copy produced in this behalf, and also the exact location of the land in question under the Survey number covered for such conversion. The land area should not fall on “Greenery Belt Area” marked in the City Master Plan.

The flat or building which you propose to buy  should have been covered under a duly approved plan. The location of your flat area should be covered under the plan sanctioned.  You must call for the original approved plan and satisfy regarding the plan approval. Violation of plan, and set backs  beyond  a certain percentage is dealt with very seriously by the local body/governments.  There are cases, where plan approval is for 3 floors and  actually 4 or more floors are constructed. You should not buy a flat in unapproved floor.

The author can be contacted on  nambi42@hotmail.com