12 Steps to Know Before Closing Any Real Estate Deal?

A real estate investment rather are buying a single-family home, an apartment, a condo, a multi-family complex or a commercial real estate can be the most important and critical decision you ever took. With this very particular and important decision originates the responsibility to buy genuine properties by fulfilling the legalities. Otherwise, you might get stuck in trouble due to incomplete or wrong paperwork, I the fact that you may deal with dishonest people in the business. As a consequence, it is important to know what are the documents that one needs to have while buying an apartment, house, land or any type of independent real estate deal. For this particular reason our team in Yanex Real Estate Investing, LLC post this following article on our website to teach how the process works. 

  1. Sale Deed

Sale Deed is the core legal document that acts as a proof of the sale and it transfers the ownership of the property to the buyer from the seller. It is compulsory to get the sale deed registered. It is important to execute the sale agreement before executing the sale deed and should check for the compliance of various conditions and terms as being agreed upon between the seller and the buyer. Before executing the Sale Deed, the buyer should definitely check whether the property has a clear title or not. It should be confirmed in advance if the property is a matter of any encumbrance charges.

A seller should always settle at the statutory payments like the cess, property taxes, electricity charges, water charges, maintenance charges, society charges and the list goes on, all before executing the Sale Deed.

  1. Building Approval Plan

It is important to get the plan approved under the Municipal Corporation Act from the jurisdictional Commissioner or the authorized Commissioner. However, the authorities sanction a building approval plan based on the zonal classification, plot depth, road width and floor area ratio. A specific set of documents is required to be submitted by the owner to obtain the approval plan of the building. These documents include property assessment extract, title deed, city survey sketch, property PID number, earlier sanctioned plans, up-to-date tax paid receipt, 2 copies of demand draft, property drawings, a land use and foundation certificate (if any). It is compulsory that the owner of the building hires a registered architect who will come up with a drawn plan meeting the appropriate bye-laws. A building approval plan can be approved in 4-5 working days once all the requirements are met.

  1. Mother Deed

Mother deed is also known as the parent document. It is an important legal document that dashes the antecedent/origin ownership of the property from the very beginning (if there were various owners earlier). This document helps in the future sale of the property, establishing a fresh or new ownership. If there is the absence of original Mother Deed, a certified copy should be obtained from the authorities of registration. The Mother Deed includes the change in the ownership of the property, be it via sale, gift, inheritance, or sale. It is important that the Mother Deed has the previous ownership in a sequence and it should be unbroken and continuous. If there is any missing sequence, one should always refer to records from registration offices, revenue records in other documents. This sequence should be updated until the present owner.

  1. Conversion Certificate

This is the Agricultural or Non-Agricultural land. It is mandatory to obtain a Conversion Certificate from the legal body for any property. This is basically for changing the land from an Agricultural land to Non-Agricultural use from the competent revenue authority. The competent revenue authority requests to plan an NOC for the conversion of the land for housing purpose. A certain set of documents are to be submitted by the owner of the land to acquire the Conversion Certificate. These documents include 3 copies of R.T.C extracts, land sketch, village map, zonal certificate, no dues certificate by village accountant, title deed, certified copy of the land tribunal, and Mutation records copy.

  1. Commencement Certificate

This certificate is required for the under-construction property. The legal document is issued by local authorities after proper inspection of the site. The document states that the project meets the criteria and helps the commencement of construction on site by the builder. Failing in this will result in the construction being illegal. An eviction notice can also be attracted along with some penalties.

  1. Encumbrance Certificate

It means charges in the liabilities or ownership created on any property that is held against the home loan as a security. The Encumbrance Certificate consists of all registered transactions that are done on the property during which period the Encumbrance Certificate is sought. Basically, it is the certificate which is sought for a particular period evidencing the sale/purchase of property, the occurrence of any mortgage or transaction. One needs to submit the Sale Deed to get the Encumbrance Certificate. It takes 3-7 working days to get the Encumbrance Certificate.

  1. Khata Extract Khata Certificate

Khata basically means account. It is an account of any person owning a property. It consists of Khata Certificate and Khata Extract. A Khata Certificate is compulsorily required for the registration of a new property as well as for transferring a property. Khata Extract is obtaining the property details from assessment registrar. It is required while buying and acquiring a property trade license. It is widely known as Khata A and Khata B.

  1. Power of Attorney

The power of Attorney is a legal process used to provide authority to another person by the property owner on one’s behalf. One can give either a General Power of Attorney or a Special Power of Attorney to transfer rights over one’s property.

  1. Betterment Charges Receipt

Also known as Improvement Fees or Development Charges that are to be paid before a Khata can be issued. Presently, the developers are permitted to pay a fixed amount as the betterment charges to the authorized body. A receipt should be obtained while buying the property.

  1. Completion Certificate

This certificate is for the constructed property. it is issued by the municipal authority signifying that the building is in compliance with the rules and regulations in terms of the distance from the road, height, and is constructed as per the approved plan, and much more,

  1. Occupancy Certificate

This certificate is for the constructed properties. An inspection is carried out when the builder applies for this certificate to make sure that the construction meets all the rules and norms. The certificate is obtained after the completion of construction. It is important while buying a property, searching a home loan, before taking the possession the builder allows people of taking property for transfer of Khata. It basically certifies that the project is occupancy ready.

  1. Latest tax paid receipt

The receipts of the property tax bills ensure that the taxes of property are paid on time to the municipality/government. It is important for the buyer to make all the inquiries with the municipality authorities/government to make sure that all the dues are cleared by the seller. The buyers should always ask the sellers for the latest and original tax paid receipt and bills and check all the necessary details like tax payer’s name, owner’s name and the date of the payment on receipt. Just in case the owner doesn’t have the tax receipt, the buyer can contact the concerned authorities and confirm about the ownership of the land.

Once all these documents are complete and up-to-date. One can easily buy the desired property without any hassles. Though one can always consult a lawyer in case of any circumstances or issues for getting a better understanding of the paperwork and its procedures.

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