1O1 PRINCIPLES

  • A. PRELIMINARY INVESTIGATIONS FOR CUSTOMERS
  • Have you Identified & Visited the Property?
  • Is the Nature of the Property Residential/ Commercial/ Industrial?
  • Is the Nature of the Property in Harmony with the Permitted Land Use?
  • Is the Property a Plot of Land/ Flat/ Floor/ Commercial Space?
  • If the Property is a Built-Up Flat/ Floor/ Commercial Space has the Sanction been taken for raising the Structure/ Building upon the same?
  • Is the Building/ Flat/ Floor Built in accordance with the Sanction Plan?
  • If the building is constructed, has the Completion Certificate been obtained?
  • Is the Building/ Flat/ Floor Singularly Owned/ Jointly Owned?
  • Is the flat /floor/space ready and built or would it Take Time for Completion?
  • Is the Seller an Individual/ Partnership/ HUF/ Joint Stock Company/ Association of Persons?
  • Is the Property in the Nature of:
  • Free-hold plot of land
  • Lease-hold plot of land
  • Flat in the group housing society
  • Floor on a plot of land
  • A built-up house on a plot of land
  • Space Buyer’s Agreement

 

  • B. DETERMINING THE RIGHT, TITLE AND INTEREST OF THE SELLER
  • What is the right, title and interest of the seller in the property?
  • Is the owner the original owner? Is his title deed original?
  • In case of a Sale Deed, has the plot been sold to any one else? (This may be discovered by visiting the Sub-registrar’s office ensuring the same).
  • Have certified copies of all original documents been obtained?
  • Is the seller the sole owner/part owner of the property?
  • How did the seller acquire ownership of the property?
  • Has a Non-Encumbrance certificate been obtained from a leading law firm/lawyer?
  • Is the plot free from any tenancy and ready for peaceful and vacant possession?
  • In case of joint ownership are the other co-owners joining in the executive of the sale?
  • Is there any dispute between the co-owners or any litigation/injunction/attachment of property passed by any court?
  • Has the builder shown to the flat purchaser relevant documents regarding title of plot on which the building is proposed to be constructed?
  • Is the builder duly authorized by a power of attorney, executed and authenticated before the sub-registrar to act on behalf of the seller?

 

  • C. COMPLIANCE WITH LOCAL LAWS:
  • Has the Vendor obtained, if applicable, consent, permission, sanction, no-objection certificate of various authorities such as the (a) society (b) the income tax authority under the Urban Land Ceiling and Regulation Act (e ) any other authority.

 

  • D. DOCUMENTATION:
  • In case of a Sale Deed, is the property described i.e. has the builder annexed the description of land in detail in the form of schedule in the agreement?
  • In the Sale Deed, have the Vendor and the Vendee been identified? (Personal Account Number of the Vendor to identify him)
  • Has the history of the transaction been recorded?
  • Has a ‘No Encumbrance Certificate’ been obtained to ensure that no mortgage exists/has been existing on the property?
  • Does the Sale Deed include a cash-component regulating the mode and schedule of payment?
  • Are you getting the possession of the premises at the time of payment of cash component?
  • Is the Sale Deed accompanied with a sanction Plan/approved Plan to check against any unauthorized/illegal construction?
  • In case of an agreement to sell, has the power of attorney been obtained?
  • Is the power of attorney duly registered with the office of sub-registrar?
  • In case of an agreement to sell, is there a Will in favour of the vendee?
  • Is the Will registered with the Sub-registrar?
  • Is the agreement to sell registered and appropriate stamp duty has been paid?

 

  • E. STAMP DUTY
In determining the amount of Stamp Duty payable on Sale Deed/Agreement to Sell, two essential requirements must be kept in mind:
  • Gender of Vendee- If the Vendee is a woman, the Stamp duty payable is 2% less than that payable by a male vendee.
  • Since State governments on all real estate agreements levy stamp duty, it varies from State to State.

  • F. REGISTRATION:
In case of transfer of immovable property a registered deed of transfer is essential if the value of the said property is Rs. 100 or more. The amount is dependent on the purchase price that is shown in the agreement of sale.
The following steps are involved in registration process.
  • Basing on the market value of the property the stamp paper may be purchased.
  • Then the document has to be written and executed in the presence of two witnesses.
  • The document has to be presented to concerned Sub-registrar in whose jurisdiction the property is situated.
  • Then the Sub-registrar will scrutinize the document regarding classification of the document and payment of proper stamp duty etc.

  • G. EXECUTION:
  • After the Sale Deed is prepared all the parties to the deed shall execute it by affixing full signatures.
  • Each page should be signed by all the sellers.
  • The execution of the Sale deed requires to be witnessed by two witnesses. The witnesses shall give their full particulars and addresses and should carry proof of their identity as in PAN card/voter Id card/passport etc.
  • The duly executed sale deed should be presented at the jurisdictional sub-registrar office.

 

  • F. MISCELLANEOUS:
  • Carpet Area: Carpet area may be defined as the net usable area. Carpet area is the area from the inner sides of wall to wall. However, this concept is rarely used today and as a result; flats today are generally sold on the basis of Built-up area and super built-up area.
  • Built-up Area (BUA): BUA, over and above the carpet area, would include the space covered by the thickness if the inner and outer walls of the flat. The BUA thus would generally be around 15% more than the carpet area of the flat. Thus, for a carpet area of 1000 Sq. Ft. the BUA could work out to be 1150 Sq. Ft. approximately.
  • Super Built-up Area: Super BUA, apart from the BUA, is said to include the proportionate common areas on the floor like the passage, staircase, etc. This would usually be around 25% to 355 of the carpet area. However, there is a tendency of loading even the common areas of the building/project like the garden, open area, clubhouse and other recreational facilities.
  • Leasehold Property: A piece of property given or ‘leased’ to an individual (known as the ‘Lessee’) for a stipulated period of time by the owner of the property (known as the ‘Lessor’), is referred to as Leasehold Property. A certain amount is fixed by the Lessor to be paid as lease premium and annual lease. The land ownership rights remain with the Lessor. Transfer of property requires prior permission.
  • Freehold Property: An agreement of sale, coupled with actual possession of the property would be considered as a conclusion of the sale. Usually, the entire amount is paid at the time of handing over possession.
  • Income Tax Consideration: If the transfer takes place within three years of purchase, the income tax exemption under Section 54F of the Income Tax Act does not hold good.