To the uninitiated, the home loan terminology is confusing and head-scratching. With a bit of homework, however, you can update your knowledge regarding home buying and ensure a smooth property purchase.
To that end, here are ten legal aspects you should consider before applying for a home loan or investing in property.
1. Assess the title deed
A title deed legitimises the ownership of the property and is never issued if the property has any defects or shortcomings. You can find the title deed at the Sub-registrar’s office and verify the legal status of the property. The title deed should be free of disputes, confirm that the property is not pledged, and that the builder fully owns the property.
2. Check encumbrance certificate
The encumbrance certificate (EC) shows if the property in question has any disputes or dues. It also shows you all the transactions done over the property since the EC was registered. To get the EC issued, you have to submit the sales deed at the Sub-registrar’s office. One can also apply for the certificate online.
Additional Read: Why Should You Consider Buying a Home at a Young Age?
3. Validate environmental clearance
The developer must have a clearance certificate from the Forest and Environmental Department of the Central Government if the construction area is above 20,000 sq.m. Make sure the property in question has one to avoid any future disputes.
4. Go through property tax receipts
The builder has to pay property taxes before selling the property. If not, you will be liable to pay the same. Hence, always check property tax receipts and ensure the builder has cleared all the dues before investing.
5. Conversion certificate or KLU certificate in case of converted land
A conversion certificate sanctions the conversion of agricultural land for residential purposes. Make sure that the property in question isn’t built illegally without the issue of a conversion certificate or NOCs.
6. RERA certificate
All projects built on 500 sq.m. or more and with at least eight apartments in the project have to be registered under Real Estate Regulatory Act, aka RERA. Hence, verify the RERA certificate before you buy the property.
7. Scrutinise NOCs (No Objection Certificate)
NOCs are issued by the Fire Department, Pollution Control Board, Railway and National Highway Authorities, and Aviation Clearance. Check whichever NOC is necessary based on the property’s location.
Additional Read: Affordable Places in India to Invest in Buying a Home
8. Check the Occupancy certificate
This document confirms that the property is constructed in compliance with stipulated rules and is ready for occupancy. Without it, a property is not legally fit for use.
9. Study the building plan
It’s pretty standard for developers to hand out misleading construction plans to lure customers in. Therefore, you must ask the developer for a sanctioned building plan, which is only issued by the regional building development authority when the builder has handed over the necessary documents
10. Land use certificate
It would be best to ensure that the property you are buying is in a residential area and not a commercial area. Go through the land use certificate to verify this.
If this checklist seems overwhelming, you can hire professionals and receive sound legal opinions for home loan.
Over to you
By considering all these legal aspects and documents, you can guarantee a hassle-free home buying process, along with ensuring that your investment is safe.
If you’re looking for options to fund your home purchase, Tata Capital is here for you! From competitive home loan interest rates to flexible repayment tenure, we can help. Start planning with our home loan EMI calculator now!