What legal documents to look for before buying land from a developer?

Following is the list of documents you “must” check before you buy land:

1. The most important thing to do before you buy a particular piece of land you are interested in is to see whether the land can be sold by the person who is selling it.

2. Check the "Title Deed / Certificate Of Title" of the land:

A title deed is "a legal document proving a person's right to property" as defined by a law dictionary. An advocate prepares a title deed after studying and scrutinizing the property and verifying that all is in order.

So as a buyer what you need to do is ask the owner of the land you wish to purchase for the tile deed and review it properly. Do not accept a xerox copy of the deed. Ask for the original "Title Deed". Some times the seller might have taken a loan and given in the original deed.

You need to make sure through the title deed that the land is in the name of the seller. Also, you need to verify that he has full right to sell the land and that he is the sole owner of the land and no one else is. It would be wise to get the title deed reviewed by a trusted lawyer just to make sure that there are no loop holes.

As a buyer you may also ask for previous title deeds of the land and get these verified too by a lawyer.

2. Ask for the "Encumbrance Certificate":

This is basically a certificate that says that the land is not under any sort of legal dispute. The encumbrance certificate can be obtained from the sub-registrars office where the deed for the land has been registered. The encumbrance certificate for the past 13 years should be taken and verified. You could even ask for the encumbrance certificate of the last 30 years for more clarification.

3. In the case of "Pledged Land":

Some people may have pledged their land previously for taking a loan. In this case, it would be wise to ensure that all the loan payments have been made and that no amount is due. Ask the seller to produce the "Release Certificate" from the bank that is necessary to release all debts over the land legally.

4. Measure the land:

Get a recognized surveyor to measure the land and see that the dimensions, area, borders etc. are accurate as stated by the seller.

5. If there is more then one owner:

If there is more than one owner, it would be wise to get a "release certificate" from everyone involved before going ahead with the process.

6. If the owner is an N.R.I:

If the owner of the land is a NRI, then the seller of the land in India should be given "Power Of Attorney" to sell the land on behalf of the NRI. The power of attorney has to be signed by an officer of the Indian embassy in the presence of a witness.

Thereafter comes the legal formalities. Once all the initial checks are made and the land to be bought is properly examined and the negotiation of the price is done, comes the process of actually buying the land.

1. The first step of actually buying the land is to draft an agreement between the parties involved in the transaction. An agreement is made to make sure that none of the parties involved in the transaction change their mind and go back on what has been decided about the transaction.

This agreement has to be made on a stamp paper. The agreement should cover the following basic things:

i. Agreed cost of the land between seller and buyer, 

ii. Advance amount given by the buyer, 

iii. Time span in which the actual sale should take place,

iv. What procedure has to be adopted if any of the parties default on the agreement,

v. How the losses have to be covered if any of the parties default,

vi. Particulars of the land.

2. The next step is to prepare a title deed. You could get the title deed written by a government licensed “Document Writer”.

3. After the agreement is prepared, the next step is “Registration”:

The land is to be registered in a sub registrar office. If there is incorrectness in the documents after registering, new documents with the correct details have to be registered and depending on the incorrectness, the registration expenses will have to be repeated.

Make sure that the title deed is registered within the time limit mentioned in the agreement. Along with the title deed, the other documents that are required for registration are:

i. Original title deed,

ii. Previous deeds,

iii. Property/House Tax receipts,

iv. Torrance Plan (optional) etc. plus two witnesses are needed for registering the property. Torrance plan is a detailed plan of the property prepared by a licensed surveyor that will have accurate details of the measurements including width, length, borders etc. This plan is needed only in some specific areas.

For land costing more than 5 lakhs, the seller should submit either his Pan card or Form Number 16 during registration.