Buying a property in Bangalore, today, can be an exhausting experience for an average, middle-class citizen. Securing a home loan for your property does not guarantee its title nor vouch for its genuineness. A buyer is the absolute owner of the property. The responsibility of repaying loans with interest over the next 15-20 years, rests wholly with the buyers even if they lose their property due to encroachments, title defects, litigation, unauthorized layouts, notified parcels of land and illegal constructions or deviations. It is therefore imperative to get all aspects of the property verified before putting one’s valuable life savings at risk.

Here is what to look out for when you decide to buy a property in Bangalore-

Risk 1: Is the property on encroached land or in a no-construction buffer zone for lakes or rajakaluves?

The Bangalore Development Authority (BDA), always had bylaws to enforce no-construction buffer zones around lakes and storm water drains (SWDs). In May 2016, the  National Green Tribunal (NGT) extended the buffer zone limit. After the recent floods in Bangalore, the local civic body, the Bruhat Bangalore Mahanagara Palike (BBMP), took action and demolished hundreds of properties encroaching lake beds and SWDs, and have earmarked much more for further demolition.

Homeowners and tenants were rendered homeless overnight and their hard-earned investments came to naught. Now, many builders are offering buyers huge discounts for such defective properties. So, if you are getting a heavy discount on your property transaction, you may have reason to worry.

How to mitigate this risk?

ZippServ has created a tool – ZippServ Protect to spot such encroached properties within BBMP limits. This free-for-all tool based on Google Maps uses intuitive features to mark SWDs and lake encroachments based on revenue maps. An analysis using this tool takes about five minutes but this could save home buyers lots of time and money.

Risk 2: Are there deviations from the approved plans and is there illegal construction on the site?

Today, over 60% of the apartments in Bangalore have deviations exceeding 30% from the sanctioned plans. Developers, in the process of maximizing their returns, typically build extra floors, units, penthouses or commercial spaces. Thus, the properties either become irregular or illegal depending on the level of deviations. Such properties risk demolition by government bodies and may not be eligible for occupancy certificate (OC). This seriously impacts the resale value. Moreover, banks tie up with builders to offer loans to first buyers but will refuse loans to second buyers of such homes.

How to mitigate this risk?

Civil engineering inspectors can accurately point to the percentage of deviation from the approved plan of an under-construction property or one where you are ready to move in.  After a physical inspection, these engineers can compute deviations and authoritatively tell you if the building is eligible for an OC. For property transactions during  ‘pre-launch’ events, buyers should exercise caution and add necessary clauses in sale and construction agreements.

Risk 3:  Look out for title defects or lacunae regarding mandatory government approvals

More than 25% of residential properties in Bangalore either have title flaws or inadequate permissions from government departments. There are properties where the land is not converted for residential use or has been converted by incompetent authorities. In fact, recently during a due-diligence process, we discovered that an under-construction project is being built on land originally granted by the Karnataka Industrial Area Development Board (KIADB) for industrial purposes. Post closure of the factory, the owners roped in a tier-I developer to build 1,000 ‘luxurious’ apartment units. In the future, if the authorities decide to take this issue up, it will be the property buyers that will suffer the most.

How to mitigate this risk?

Verify documents from experienced property lawyers who will check if the land has been procured legally and if there are any issues regarding the ownership transfers, partitions, conversions, mutations, encumbrances, mortgages, and loans. They will also check if the property is built in compliance with the local governing regulations with necessary approvals and NOCs from various government offices. This verification helps property buyers access documents that the builders might have concealed.

Risk 4: Is there any fraud or forgery in the property papers?

In the past, builders have transacted using fake certificates regarding occupancy, completion, and khata. In some cases, encumbrance certificates had key entries intentionally removed, and non-competent authorities issued worthless certificates that could be challenged in any court of law.

How to mitigate this risk?

Cross-verify documents in the concerned government offices and get certified copies of khata, NOCs, betterment charges receipt, sale deeds and other documents.