Buying a property could be a matter of investing in a growth industry, making a dream home or a buying a property for a living. In any case, the money involved is so huge that it is prudent on buyer's part to make a choice after doing diligence on his/her part. A bank loan isn't always a guarantee that property has been verified diligently by the bank officials as the main aim of verification by the bank is on valuation and marketability of the property than the legalities. Proper legal verification is needed to avoid any issues shattering your dreams.

Once the other considerations like financial benefits of investing in a particular property, the location of the property etc. are taken care of, the legal aspects should be verified thoroughly. This is in general terms called Property Verification. There are two key aspects of Property Verification process:

• Property Ownership Verification
• Compliance with Rules & Regulations

Property Ownership Verification

In order to ascertain the ownership of the property with the seller, below are the list of documents should be checked:

1. Land Title Deeds

   The extent of ownership of land with the developer is of utmost importance as this will decide the extent of ownership of apartment complex with the apartment buyers. There are no. of ways in which land titles could be held by the builder viz. sale deed, partition deed, gift deed, Will held with the builder etc. This should be probably the first step in case of an under construction apartment.

2. Mother Deed

   Ownership changes over a period of time and it is extremely important to trace the same to understand the exact details of transactions. It is the Mother deed which contains all the details pertaining to the history of ownership changes. It is imperative that each change in ownership is verified with the transfer document and traced to the point of current ownership. Missing links should be thoroughly scrutinized. Verifying a mother deed is of key importance in case of resale property as in case of direct buy from builder, ownership of land and compliance form the main part of scrutiny.

3. Sale Deed

   This is a deed between the Seller and current buyer of the apartment. This is to verify & ascertain the extent of current ownership of the apartment. It would exist in case of a resale property or ready to move in apartment only.

Compliance Verification

This basically is to check the extent to which an apartment is complying with local laws, rules, and regulations. This will also ascertain the legality of the property.

1. Conversion Order for residential purposes

   This is required in case of an property built on a piece of land with agricultural past.

2. Khata Certificate and Khata Extract

   A Khata certificate basically tells about the records with BBMP on who holds the rights and responsibility to pay taxes of a property. The properties which comply with all requirements of BBMP are labeled as 'A Khata' and those which are on agricultural land, not meeting specifications or have deviations fall under “B Khata”. The “B Khata” properties have many disadvantages including not being able to raise bank loans to evasive actions by the civic authorities.

3. Betterment charges paid receipt

   The properties which are 'B Khata' can be converted to 'A Khata' by rectifying the issues (if possible) or sometimes paying a fee called 'Betterment Charges'. They could also be converted under 'Akrama Sakrama' scheme after following the documentation process for the same.

4. Registered - Joint Development Agreement, GPA and Sharing Agreement (between the Land Owner and Builder)

   A lot of times builder sub-contract or get into joint development agreements for construction of a project. They may also get into GPA (General Power of Attorney) for land assets’ usage (lease, freehold in exchange of certain rights or few units of flats) etc. Buyer should get this copy to understand and read between the fine lines.

5. Sanctions and Approvals

   There are multiple sanctions that a builder needs before starting the construction and also after (at the time of construction completion).

   Building plan approval & Layout Approval from BDA

   The building plan is to ensure building complies with the prevailing building laws. Layout approval unless done, the plot division and construction is deemed illegal and may attract exemplary fines or punishment. Also, the absence of Layout approval means roads, drainage, street lighting etc. utilities would not be provided in the layout.

   Basic Amenities or Utilities (Electricity, Water, Sewage etc.) from BESCOM & BWSSB

6. NOCs

   NOCs from various Government Authorities like Fire Department, Airport Authority, Pollution board etc are needed to ensure building is complying with laws and regulations.

7. License

   The builder should have the license to construct the building and do the development work. The license is issued after the competence in his area of work has been evidenced by the developer; hence the license is a way to know if your builder is competent to do the job he is claiming to do.

8. Commencement Certificate

   This is issued by BBMP after inspecting the line-out marked is in-line with the approved plan.

9. Possession / Occupancy Certificate

   Once the construction is completed, builder applies for Occupancy certificate with BBMP which is issued after inspection of the premises and after ensuring that the building is in accordance with the sanction plan.

10. Encumbrance Certificate

    This is issued by Registrar/Sub-registrar office and is an evidence of any liabilities (pending taxes, loans etc) the property may have. This is issued generally for a period of time and is imp for resale properties.

11. Latest Tax Paid receipts for land and flat

    As obvious, this is to ensure the property is free of liabilities.

12. NOC / No Dues from Association or Society

    Society clearance and membership / NOC from Association or Society, if any should be taken to ensure no illegal activities or liabilities on the property. A Copy of Deed of the declaration of the Apartment Owners Association and the Bye Laws annexed to the same shall be called for and read to confirm that it confirms to the sale deed/title deed. It is also advised to look for any additional burden/costs in the form of transfer fee payable by the Transferee.

13. Latest Utility Bills

    Latest utility bills to verify that there are no dues outstanding.