List of legal documents should be considered when purchasing a property in Chennai
Buying an apartment/villa in chennai from a developer is not just investing a huge sum and taking possession. It requires buyers to be aware of legal aspects before making investment. Buyers should not only lookout for an apartment/villa that satisfies their requirements but they should also make sure that the property has legal clearance so that the buyer will not end up in a regrettable situation. It’s always advisable to take help from a legal professional who is an expert in this field for legal vetting of property documents. They help buyers in making wise and informed decisions about legal clearance over the property and then go ahead with the property investment.
Generally, most of the buyers may not be aware of the terms and jargon used in the legal document of a property. Legal professionals help buyers in apprehending the jargon and ensure that the paperwork is precise and clean so that there will not be any legal proceedings that buyers would face in the future. If there are any issues in the paperwork they are the ones who can guide the buyer with a proper alternative and how to approach the developer. Property lawyers also ensure that promises made by builders are not just in words, but are also reflected in the documents in writing. Banks also help in the legal vetting process if the purchaser is applying for a loan. They have online platforms to verify the documents provided by the developer and various checkpoints to sanction the loan.
Before buying an apartment/villa in Chennai take help from property lawyers to verify these below mentioned documents and make sure that there are no tangles involved.
Title deed
It’s a legal instrument in writing or a document that confirms the ownership of a property. It also defines the rights and privileges the owner has over the property and any lien on the property and the value of the property. Buyers should verify the owner’s name and details, the location of the property and its extent, and all details about the property to confirm that the transfer of property is in order during purchase and that any future transaction can be carried out hassle-free.
Patta/Chitta/Adangal
Patta is a revenue document issued by the government that shows the possession of the property. Patta Chitta document comprises Patta number, district, taluk, and village details, name of the owner, survey number and subdivision, Type of land (Wet or Dry), the total area of land, and property tax details.
Encumbrance certificate (EC):
It provides all the registered transaction details on the transfer of ownership and mortgage if any. With the respective sub registrar’s office, EC needs to be verified to ensure that the property is free of financial and legal liability. If the property has any financial liability then the lender will add “charge” to EC. Therefore it is necessary to verify that there are no charges or liens added to the EC before purchasing an apartment/villa.
Power Of Attorney:
It’s a document that authorises another person the empower to present themselves on behalf of the owner. It’s merely a signing authority and not the actual ownership. Hence the buyer should check the validity of the power of attorney while buying a property since the principal/owner can cancel the power of attorney without taking the concurrence of the power holder. If the power of attorney is more than 30 days old, the life certificate of the ownership should be enclosed along with other documents during registration if in case the owner is an individual. In the case of developer/corporate, a life certificate is of no concern.
Layout approval:
This approval holds the description of the building like the number of floors, flats on each floor, surface area. All developers/builders need to get layout approval from the concerned state-run DTCP to initiate projects. A property buyer investing in an individual villa/apartments at Chennai needs to provide documents showing the layout approvals and building plan being approved by the DTCP to get a loan. Buyers can verify the list of all approved plots on the official website of the state run DTCP portal. Alternatively, one can also visit the DTCP office to get information.
Building planning permit:
It is an approval given by the respective statutory body to carry out any construction activity on the land or building. While applying for a building planning permit, developers will submit a sale deed, EC for a period of upto 13 years, parent documents, tax receipts, NoC from various statutory bodies, project plans, project estimation, STP details, etc. Without a planning permit, any construction activity taking place is considered illegal.
Building License:
Once a building planning permit is obtained the developer should intimate the local government bodies such as the corporation/ municipality/ local president about the permit and get it approved. The validity of a building license is 8 years (amended) from the date of issuance. The construction activity should be completed as per plan within the period. If it’s not completed within the stipulated timeline, fresh approval shall be obtained.
Property tax, Water tax, and Electricity Bill:
Property tax, water tax, and electricity bill receipts act as a document that provides proof of ownership. If the transfer of title is not updated in the tax records, then the receipts will be in the name of the previous owner which might result in legal complications.
Construction Agreement:
It’s a contract between the buyer and the developer regarding the building’s construction value, the timeline for construction, payment schedules, undivided share of land details, and other general terms and conditions. It also includes the remedies for any breach of contract terms for both parties.
Sale Agreement:
It’s an agreement between the owner/developer and buyer to transfer the ownership of land at a later period upon satisfying certain terms and conditions. It will decide the future course of action in the event of any disputes. Purchasers should check for the penalty clause in the sale agreement in case of delay. Property lawyers make sure that the sale agreement and the construction agreement speak the same language.
Completion certificate/Occupancy Certificate (OC):
Completion certificate/Occupancy Certificate (OC): It’s a document that ensures the construction of a building has been carried out in accordance with laws and regulations of the development authority and a proper audit is carried out on completion. Buying a property without OC may put buyers at risk in availing facilities like electricity supply, water supply, and drainage facility. A completion certificate will not be available for an under-construction project.
During registration of the property, lawyers make certain that the purchaser is paying the correct stamp duty and that there are no additional costs added. They also ensure that the promised percentage of undivided shares of the land and the allotted car parking space have been transferred by the promoter or power of attorney holder and holds no rights over the open spaces and the terrace, after the entire undivided shares of the land has been transferred to the buyers purchasing the apartments/villa. They also verify whether the roads and park areas in a layout have been handed over to the local body by way of a gift deed.
If there are any issues faced by the purchaser or for any clarifications regarding the project they can always approach RERA, since registering a project under RERA is mandatory for a developer to sell their apartment/villa. A project without proper legal due diligence cannot be registered under RERA. Therefore the buyer should verify whether the property is registered under RERA before purchasing. To verify whether the property is registered under RERA, buyers can visit state-specific RERA websites.
