In India, the process of purchasing a flat or property on sale can be challenging and confusing. The process requires voluminous documents for authorisation and regulation. However, once you have identified a flat on sale, you may have multiple questions on your mind which needs to be clarified before proceeding to buy that flat. Questions such as:
- Whether the building/society (where you are planning to buy a flat) has approvement from the government or not?
While checking the legality of the property’s building or society is crucial, understanding how to avoid broader real estate fraud is equally important. Our blog, ‘How Can You Avoid Real Estate Fraud?‘ provides detailed insights into typical fraud schemes and practical advice on how to protect yourself from becoming a victim. Equip yourself with the knowledge to navigate safely through the real estate market. - Does the preferred flat has any legal dispute or not & who are the correct owners?
Firstly, understanding the Real Estate (Regulation and Development) Act, 2016, or RERA, is vital for any property buyer. Our blog, ‘RERA – The Real Estate Regulation Development Act 2016,’ further explains how this act protects buyers through ensuring transparency and accountability in real estate projects. Learn how RERA can provide you with the security you need when making such a significant investment. - What is the mode of transfer of money and required documents?
Before finalizing your property purchase, ensuring that all necessary documents are in order is critical. Our blog, ‘Don’t Purchase Property Before Checking 10 Documents‘ offers a comprehensive checklist of documents you should verify to avoid future legal issues. From title deeds to encumbrance certificates, this guide ensures you have all the information to proceed with your purchase safely.
If you get answers to the above 3 questions, then you are all sorted and can proceed to purchase the flat on sale. In this article, we will be explaining the steps that you must follow if you are looking for a ‘Ready to Move’ flat on sale.
Table of Contents
Steps for Purchasing Flat on Sale
Steps | Documents required | Steps to verify | Additional information (if any) |
---|---|---|---|
Step 1: Building/Society check | Occupancy certificate (OC) (This is the certificate that will confirm that the project has been completed as per legal guidelines. You must go ahead and purchase if OC is available.) | I. You need to ask the Owner to show you the OC. II. Furthermore, to confirm if OC is valid and legal, see if it is issued by a Municipality Corporation or local authority. | In case of a home loan, OC will be with the bank only then you don’t need to verify this since the bank has already verified it. |
Step 2: Preferred flat ownership check | Title Document (A property title is a document that shows legal proof of ownership. It can be a sale deed, gift deed, or conveyance deed.) Encumbrance Certificate (This declares that there are no dues on the property, and the title of the property is clear and marketable without any obligations. This contains details of all transactions done on the specific property.) | Title Document I. You need to ask Owner to provide title deed. II. Further, you can get them verified from the sub-registrar’s office. Encumbrance Certificate Sub-registrar office issues this certificate. To get this: I. Firstly, go to the Sub-registrar office of the region where the property is located. II. Next, fill out Form 22 with fees of Rs 100-200. III. Then, within 15-30 days you will get an Encumbrance Certificate. IV. Lastly, review it thoroughly for any discrepancies. | Title Document In case of a home loan, you should check the copy of the deed since the original will be with the bank. |
Furthermore, there are some other documents which you can check at the first stage.
1. Allotment letter from builder.
2. Car allotment letter.
3. NOC from RWA.
They will transfer all these documents to you. Hence, make sure you mention them in sale agreement (explained in next steps).
The steps mentioned above clarify that the property is good to buy from a legal perspective.
Hence, just follow the steps and get your property legally.
Other documents may also need to be verified, but we can ignore them at this point as we can obtain them through the sale agreement.
Steps | Documents required | Steps to verify | Additional information (if any) |
---|---|---|---|
Step 3: Paper/ Money transfer | 3.a) Advance Payment + Sale Agreement (Sale agreement mentions the terms, conditions of the sale. You can take lawyer help to prepare it. Make sure it also mentions below documents to be handed over to you before executing sale deed: 1. NOC with RWA. 2. Allotment letter 3. Car allotment letter) | I. Get sale agreement prepared by a legal expert. II. Then, make advance payment. III. Get sale agreement signed from seller. IV. Get sale agreement registered. Furthermore, it is very important to get it registered as it will help you in case of any dispute. V. Both buyer and seller should keep one copy of sale agreement with the signature of both parties. | Sale Agreement Sale agreement is valid till sale deed gets executed. So, you must take all documents before sale deed is executed. Many people get sale agreement notarized rather than registered, but it needs to be necessarily registered for a hassle free process in case of dispute. |
3.b) Full Payment + Sale Deed (Sale deed includes all the necessary details about the buyer as well as the seller of the real-estate possession. Only when sale deed is executed we can say the sale of a possession become final.) | I. On the agreed date you must do full payment. II. Pay Stamp Duty through any of the below methods: (Stamp duty is paid by buyer and it lies between 3-10% of property value. You can take lawyer’s help to calculate it.) e-stamp: Visit shcil website and check banks/ACC where this facility is available and collect e-stamp after paying stamp duty. (You cannot login to this site but can verify your e-stamp.) Non-Judicial stamp paper: This is a popular method to pay stamp duty. You can buy stamp paper of equivalent stamp duty money through authorized stamp vendors. Franking machine: Go to a bank with this machine and pay it. III. Once you pay the stamp duty then draft the sale deed (with help from a legal expert). IV. Register it at sub-registrar office within 4 months. (Fees for this will be either 1% of property value or max Rs 30K.) (You have to take appointment online or offline for the registrar office). V. Lastly, collect original registered sale deed (in case of loan bank will take the deed). |
In conclusion, buying a property in India can be a challenging and confusing process. Hence having all the crucial information is significant to overcome these challenges. Hence, stay well informed by subscribing to our Newsletter – ‘The Success Circle‘ for free of cost!
FAQs:-
To verify the legality of a flat, you need to check the Occupancy Certificate (OC), Title Document (such as sale deed, gift deed, or conveyance deed), and Encumbrance Certificate. The OC confirms that the project complies with legal guidelines, while the Title Document proves ownership, and the Encumbrance Certificate ensures that there are no outstanding dues on the property.
To verify the ownership, ask the seller to provide the Title Document. You can further confirm this by verifying the document at the sub-registrar’s office. Additionally, ensure that the Encumbrance Certificate, obtained from the sub-registrar office, is clear of any discrepancies.
The Sale Agreement outlines the terms and conditions of the sale. It is crucial to have this agreement prepared by a legal expert and registered at the sub-registrar’s office.
This document serves as a temporary proof of the sale until the Sale Deed is executed, and it must include mentions of documents like the NOC from RWA, Allotment Letter, and Car Allotment Letter that should be handed over before finalizing the sale.
Stamp Duty, which ranges between 3-10% of the property’s value, can be paid through e-stamping, non-judicial stamp paper, or a franking machine. After paying the Stamp Duty, you must draft the Sale Deed with legal assistance and register it at the sub-registrar’s office within four months.
Before making any payment, ensure that a Sale Agreement is prepared and registered. The Sale Agreement should detail all terms and conditions and list the documents to be handed over before executing the Sale Deed. It is advisable to make only an advance payment initially, with the full payment reserved for when the Sale Deed is executed.
After making the full payment, pay the Stamp Duty and draft the Sale Deed with legal help. Register the Sale Deed at the sub-registrar’s office within four months. Once registered, the Sale Deed serves as the final document confirming the transfer of ownership.
Ensure you collect the original registered Sale Deed; if the property is under a loan, the bank will retain the deed.