Documents to Check to Prevent Real Estate Fraud

As a real estate investor or homebuyer, you save your life's earnings to buy the house of your dreams. But, the stories of unethical developers and builders cheating the real estate buyers discourage you from doing so. Although the implications of the new legal rules and regulations like RERA and GST have empowered the property buyers, the urban traditions of real estate frauds panic the majority of the home buyers in many cities. 

With real estate sellers frauding the buyers in numerous ways like providing fake documents, showing fake layouts, dubious agreements, double registrations and much more, the buyers in today's real estate market need to be extra vigilant while buying a property in India. Therefore, we have come up with this write-up that enumerates the most crucial documents you should carefully check while buying a property in India in your name. 

Have a look!

1. Sale Deed

The first document you must check to prevent real estate fraud is Sale Deed. The Sale Deed is the most crucial document that one must check while buying or investing in real estate in any city in India. The Sale Deed is a legal document that states the transfer of title, ownership and all other rights of the property in question from the name of the seller to the name of the buyer. In other words, a Sale Deed is proof of sale as well as a transfer of ownership from the seller to the buyer. 

It is always suggested that a property buyer must check each and every term listed on the Sale Deed, read every other property-related condition and cross-check the property title before signing the papers. Also, apart from ensuring that the property has a clear title, ensure that the deed is registered. 

2. Mother Deed

Mother Deed is the parent legal document in the real estate industry that helps in tracing the antecedent ownership of the property. The necessity of this document arises when you will sell your property on a future date. Having this document will help you trace the property's previous owners and establish powerful proof of your current ownership.

While checking Mother Deed, ensure that the Mother Deed has recorded the references to previous ownerships in a continuing sequence or chronological order until the current owner. It will prove to be greatly helpful in knowing who all have owned the property till now. 

3. Approval Plan

The Approval Plan is another important legal document that you must check to avoid real estate fraud. An Approval Plan is issued by the jurisdictional Commissioner or any other officer appointed by the Commissioner. The Approval Plan is approved when the developer or builder of the real estate project submits a list of documents to the officer. This list of documents involves:

1. Title deed

2. Latest tax receipts

3. Foundation certificate

4. City/panchayat survey sketch

5. Property assessment extract

6. Drawings of the property

7. Property PID number

8. Earlier sanction plans

9. Land-use certificate

4. Power of Attorney

The Power of Attorney of any real estate is the legal deed that gives a person the right to rent, sell or mortgage the property in their name. In addition to this, the Power of Attorney also gives the person the right to reap monetary benefits from the same. It is important to note that the Power of Attorney must be duly registered to offer you all the legal rights related to the property. 

5. Certificate of Completion

A Certificate of Completion is issued by the municipal authorities and is made necessary for buying a property in India post RERA implementation. This certificate in the real estate industry states that a building is in compliance with the rules and regulations and is built as per the approved plans. 

To put it simply, checking this certificate while buying a property ensures that the building you are buying or the house you are buying is duly completed in compliance with the rules laid down by the regulatory authority and is as per the approved plan. 

6. Conversion Certificate

Another real estate certification that has been made imperative for buying a property in India is a Conversion Certificate. The Authority of India issues this legal real estate document in order to grant permission of changing the agricultural land or farmland into land for housing or residential purpose. As a large part of the land in India is still farmland, this is why the authorities issue a Conversion Certificate. Without the Conversion Certificate, the land might still be considered farmland and constructing a house on such land can be treated as illegal. Furthermore, a No Objection Certificate or NOC must also be obtained from the tehsildar's office for this conversion to take place. 

7. Encumbrance Certificate

Encumbrance Certificate indicates the change in the ownership of property that has been held against a home loan. In other words, we can say that an Encumbrance Certificate gives you all the details regarding the property's change in ownership if it has been held collateral in any type of home loan. This certificate will give you proof of title transfer, mortgages or any other legally registered transaction against the property you are about to purchase. 

8. Occupancy Certificate 

Another certificate that you must check to prevent real estate fraud is Occupancy Certificate. In order to make sure that the building is meeting all the required norms, an inspection is performed by the authorities when the developer applies for this certificate. 

This certificate is issued to a building once the inspector has completed the home inspection. Once the inspector has performed an inspection on the building and approved its condition, he/she issues an Occupancy Certificate. This certificate certifies that the building is ready-to-move, and one can instantly occupy it. 

9. Tax Receipts

Finally, it is always important to take a detailed look at all the tax receipts to make sure that all property-related taxes have been paid until the date of sale. You can even ask for the latest original receipts to establish the credentials of the owner. If your seller does not have the tax receipts, you can contact the municipal body by using the property's survey number to confirm the ownership. Apart from this, the other regular bills like electricity and water bills must also be checked.

These are some real estate documents that one should always verify and check to make sure that the property he/she is willing to buy is legal. Checking these documents will also help you know that you are making a legal and lawful transaction and not getting into any kind of fraudulent deal. You can also hire a lawyer who will vet all these documents and guide you through the process.

Also Read: Everything You Need To Know About A Real Estate Purchase Contract