Purchasing a property/land requires utmost care. One has to examine and find out the title of the seller or nature of his right. A seller can sell only what he possesses. Therefore if a seller has proper and valid title, on purchase you will get valid title. If the seller's title is defective, you will get only defective title. The simple reasoning is that he can sell what he has, and nothing more.
Some of the important aspects to be borne in mind while purchasing a land may be classified under different heads as follows:
1. First and foremost ask who is the seller. Get the full name and address of the seller.
2. Find out what is the nature of his right. The seller may be having absolute ownership right, or a conditional or limited right.
3. So far as the types of rights in the land, it can be classified mainly as follows:
· Free hold or absolute ownership land known as Warg right
· Mulgeni right (right of permanent lease),
· Tenancy right,
· Lands granted by government, under Land Grant Rules, Land Revenue Act, Grant of Flouse sites.
· Lands granted under Land Reforms Act, etc
4. It is always advisable to deal with a Freehold right or absolute ownership right, which is also called as Warg right.
5. After getting the particulars as to who is the seller, what is his right, then find out the source of his right or title.
a) The title of the seller may be by purchase, by inheritance, by partition, by gift, by settlement or by grant.
b) To find out the source of title there must be some document like.
Right of purchase ---------- Sale Deed
Inheritance ----------------- Entries in Revenue records, and predecessor's title
Partition --------------- Deed of partition
Gift ---------------------- Gift Deed
Settlement------------------- Deed of settlement
Grant ------------------------ Grant order
Mulgeni --------------------- Deed of Mulgeni or permanent lease
c) If the right is by purchase ask for the original sale deed. See when the seller had purchased the land and from whom he had purchased. Verify the previous records. Verify, the title for thirty years.
d) If it is by inheritance, ask the particulars as to from whom he has inherited. What was the right of his predecessor? Again it may be a sale deed or gift, or inheritence. Verify the previous title Get the details as to how his predecessor acquired the title, and whether he is the only person who has inherited. If here are other persons who have jointly inherited, then you have to find out, whether there was any partition. Whether there are any minors who have inherited the property. If there is a minor, the minor's property can not be purchased without obtaining permission of the Court.
e) If it is by partition there must be a deed of partition.
f) See whether there are any conditions or restrictions in the deed of partition. Find out whether there are any conditions, like pre-emption, water rights, rights of way, payment of maintenance etc.
g) Likewise if it is gift deed, or settlement deed, or grant, get the original Gift deed, settlement deed, or grant order as the case may be. Read the document and see whether there are any conditions, like reservation of life interest, restrictions for alienation, payment of maintenance, preemption etc. Some times there may be reservation of life interest, or what was gifted may be only right of enjoyment
h) Rights acquired under various types of Grant orders again are subject to several conditions regarding alienation and enjoyment. This has to be verified. If the grant is in favour of a person belonging to Scheduled Caste or Scheduled Tribe community, generally there will be a condition prohibiting alienation. Such lands cannot be purchased
i) If it is a Mulgeni ask for the deed of mulgeni, again see whether there are any conditions. Mulgeni or right of permanent lease is again a conditional right. In such cases there are two parties or persons having the right in the Jand. One is the owner and another is the permanent lessee. In other words, one is the Mulgar/owner and the other one is Mulgenidar/ tenant. The possessory right or right of enjoyment will be, with the Mulgenidar/tenant.,The owner/Mulgar will have the right of ownership with right to collect the stipulated rent. The deed of Mulgeni or deed of permanent lease will contain the restrictions regarding alienation, payment of rent, and the other rights of the lessee etc. All these have to be verified. Because the owner/mulgar will generally have a right to challenge or question the alienation/transfer and the very right of mulgeni can be cancelled or terminated. It is always advisaWe to find out as to that is the Mulgar, or owner, and purchase his rights also.
j) If there are any conditions in the documents, examine the conditions, and if the conditions restrict or prohibit the transfer or alienation, do not proceed.
6. Find out the extent of the property and see whether it tallies with the one mentioned in the documents. Verify the survey number, location and boundaries and get the land measured through a competent surveyor.
7. Find out whether there is an approach road.
8. Examine the sketch or plan of the property.
9. Get the record of rights (RTC) of the land and confirm that the name of the seller is shown as owner in possession of the property. You can get the latest computerized RTC from the Taluk Office. The record of rights will disclose the name of the owner, name of the person in possession, nature of right, nature of land, and also encumbrances if any.
10. Identification of the lands will be always by Survey Numbers. Record of rights/ khata will give an indication as what is the right of the holder. Confirm the entriesin the record of rights/khata with some other registered documents / or previous documents. This is because the Record of rights or khata by itself is not a document of title.
11. We have to find and out and see whether there are any encumbrances, charges, or mortgages on the property. Verify Encumbrance certificate for at least 13 or 15 years up-to-date. If there are any charges/mortages/ or other encumbrances noted in the Encumbrance certificate do not proceed till the same are cleared or clarified.
How to find out this?
a. Apply and get an encumbrance certificate at least for 13 or 15 years, from the office of the Sub-Registrar where the immovable property is situated. Give the particulars of the property like
Survey Number, extent of land, name of the village, name of ward, boundaries, etc. and specify the period for which you require the encumbrance certificate.
b. The encumbrance certificate will show the details of registered documents relating to the property, Like sale deeds, mortgage deeds, etc.
c. If there are no such registered records relating to the property the encumbrance certificate will be a Nil Encumbrance certificate.
d. Mortgages or charges can be created by registered documents, or by depositing the original title deeds. If it is by registered documents, like deed of mortgage, it will be reflected in the encumbrance certificate. If it is by deposit of title deeds, the Encumbrance certificate will not disclose it. Therefore you haveto ask for the originals title deeds for verification. If the original title deeds are with the owner it means that he has not deposited it with any body. Sometimes, the originals might have been lost by misplacement, fire, or by some other means. If that is the situation then one has to proceed only on the basis of trust. We can ask for an affidavit, a sworn statement of the owner to the effect that the original title deeds are really lost and that he has not created any charge, or deposited it with anybody. A paper publication can also be given.
12. If the properly which you are going to purchase is a land with building, you have to verify the building licence, completion certificate and latest tax paid receipt
13. Khata of the building and land has to be verified and it must show the name of the owner.
14. Apartments: If the property which you are going to purchase is an apartment you have examine and verify:
a. The title to the land on which the apartment building is constructed. For tracing and confirming the title of the land on which the Apartment building is built, the same points narrated above have to be followed.
b. The land and the building must have been submitted to the provisions of Kar. Apartment Ownership Act 1972, by a registered document called the Deed of Declaration. Read the Deed of declaration and it will give you a clear picture as to what are the common rights, facilities, how it has to be enjoyed,how it has to be maintained. As a whole the deed of declaration will contain the various provisions regarding the mode of enjoyment of the apartments, common areas, and facilities.
c. The percentage of right in the land which you are going to get has to be verified
d. Whether the Association of the Owners has been formed?
e. Get a no due certificate from the Association of Owners regarding maintenance or other charges so far as it relates to the apartment, which you are purchasing.
f. The building license, plans, completion certificate latest tax paid receipt have to be verified.
g. All documents relating to land as explained above have to be verified.
h. The original of the sale deed relating to the apartment, which you are purchasing, has to be obtained.
15. Sale by General Power of attorney holder. In many cases the actual owner does not come forward for executing the sale deed and the GPA holder represents the owner. In such cases first of all we have to verify the genuineness of the GPA. The original GPA must be verified and the GPA holder must have the custody of the original GPA. The following points may be borne in mind while examining the GPA:
a) The GPA is still in force. If it is an old GPA ask for a confirmation.
b) The GPA must contain the following powers and particulars:--Power of sale, power to sign and execute the sale deed, receive the consideration, appear before the Sub-Registrar, present the document for registration, admit execution and receipt of consideration, deliver possession of the property and description of the property, full name and address of the person giving the power and the person to whom it is given. If all these powers are there the GPA holder can execute the sale deed.
c) The GPA must be drawn on stamp paper of the required value. It must be attested by a Notary, Magistrate, Sub-Registrar or embassy.
17. As the sale transactions cannot be done then and there, and since it requires some reasonable time for both the seller and purchaser, many a times, the parties enter into agreement for sale pending registration of the actual sale deed. Before entering into agreement for purchase or sale, all the points narrated above have to be verified. The purchaser must retain the original agreement. Copies of the title deeds have to be obtained. The agreement has to be drawn and executed on stamp paper of required value. The agreement for sale must contain at least the following particulars:
a) Full name and address of the Seller and Purchaser.
b) A brief history of the title of the seller, with reference to his title deed.
c) An undertaking by the seller to sell |he land to thed) The total price of the property agreed between the parties.
e) The amount of advance paid, mode of payment, acknowledgement of receipt of the advance by the seller, the amount of balance price to be paid, the time for payment of the balance price.
f) Time for execution and registration of the sale deed.
g) An undertaking to deliver vacant possession of the property
h) An undertaking to hand over all title deeds
i) A clear description of the property
j) Date and time of the agreement.
k) A default clause stipulating penalty or damages for breach of agreement.
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