Home Steps for buying Land

Steps for buying Land

Land documents that you should check before you buy land in Kerala

Step 1: This is a deed document executed by seller and buyer. By this, the title of property is 'conveyed' by the seller to the purchaser. Conveyance is the act of transferring ownership of the property from a seller to the buyer. This document will help you ascertain whether the flat in an apartment complex which you are buying, is on land belonging to the society/ builder/development authority in which the property is located. The first step is to see the title deed of the land which you are going to buy. Confirm whether the land is in the name of the seller and that the full right to sell the land lies with only him and no other person. It is better to get the original deed examined by experts. Along with the title deed, the buyer can also demand to see the previous deeds of the land available with the seller.

Step 2: This document issued by the Sub Registrar’s office mentions the names of the sellers & purchasers of the property, for which the document is registered.

Step 3: This document issued by the concerned land authorities contains details like survey numbers, area, and date - from which current owner is registered as owner and Is the mutation effected or not in his name. Sometime the owner may not have the tax receipt with him, in such cases, contact the village office with the survey no. of the land and confirm the original owner of the land

Step 4: Encumbrance means the charges or liabilities created on a particular property, whereby it is held as a security for any debt of its owner which has not been discharged as on date. The certificate can be obtained from the concerned Sub-Register Office on an application in a prescribed form provided by the authority’s .In the normal course it will take around 2 weeks for obtaining the certificate. Government Authorities and Financial Institution like bank, etc... Demand 13 years of encumbrance. There will be a nominal fee for obtain, it depending upon the number of years. In an emergency there is a provision for paying “double fees" for getting it immediately. This certificate will show the geniuses of owners’ title....The normal course the certificate will be full proof document, but there can be clerical errors from the Sub-Registrar Office, our vigilances can check this error. Therefore, it is always advisable to inspect the property personally and to verify and confirm that the original title documents are available with property owner. Some additional safeguards like paper notification, searching in jurisdictional courts for any pending cases would be useful.

Step 5: It can obtained from the village office concerned for obtaining this certificate an application on white paper affixing the required court fee stamp addressed to the Village Officer concerned . There will be no fee obtaining for it .The Possession Certificate will prove the present possession of the property concerned as on date. On verifying the relevant documents and site inspection of the applicant by the Village Officer, he will certify with his signature and office seal.

Step 6: It shows the area of location of the requested property. It contains distance from main station and if any subway the distance from main road to the property .etc...The land mark of the property, boundaries of the property, measurement of the property, if there is any building or house the detailed description of the same will be mentioned in the location map.

Step 7: The village officer through the Tahsildar should note any revenue recovery regarding to any legal issue.

Step 8: An advocate issues the Title Certificate after conducting a search on the title of the property intended for purchase. 
The title certificate would state if the property is unencumbered and has a clear marketable title. Usually, a search on the title of the property is taken for a period of the last 30 years. It is mandatory for the developer to annex a copy of these reports in the "Agreement for Sale" with the intended purchaser of the apartment. 
These documents would state whether the title to the property is clear, marketable and free from encumbrance. It would state clearly whether or not there is any existing mortgage, litigation, condition or claim, which is likely to affect the title of the buyer adversely.

Step 9: If the land you are planning to buy is a paddy field or agricultural land and if you plant to use it for residential/commercial/industrial purpose, the agricultural land has to be converted to non-agricultural land and a Non Agriculture Order has to be obtained from the Collector of the District where the property is located. 
Along with this, one needs to take the latest receipts evidencing the payment of Non Agriculture Tax. In cases where the conversion from agricultural use to non-agriculture use is not done within the stipulated period then, there should be an order from the concerned authority extending the period. 37(I) Clearance [No objection certificate under section 269 (3) of the Income Tax Act, 1961]. If any immovable property in cities specified by the Appropriate Authority is transacted above a certain value, it needs to obtain a No Objection Certificate from the Appropriate Authority as defined under the Income Tax Act. A transaction would be incomplete and invalid if this clearance is not obtained. A statement in Form no. 37(I) needs to be jointly submitted by the seller and purchaser. The appropriate authority would issue a No Objection Certificate, if it feels that the property has not been undervalued. If the appropriate authority feels that the property is undervalued, then it would do pre-emptive purchase of this property and sell it subsequently through an auction/tender. Various transaction limits have been set for various cities.

 

Process for Buying Land

Once all the initial checks are made and the land to be bought is properly examined and the negotiation of the price is done, comes the process of actually buying the land.

Step 1: Draft an agreement between the parties involved in the transaction. An agreement is made to make sure that none of the parties involved in the transaction change their mind and go back on what has been decided about the transaction.

This agreement has to be made on Rs.50 stamp paper.

The agreement should cover the following basic things:

  • Agreed cost of the land between seller and buyer
  • Advance amount given by the buyer
  • Time span in which the actual sale should take place
  • What procedure has to be adopted if any of the parties default on the agreement
  • How the losses have to be covered if any of the parties default
  • Particulars of the land

An experienced lawyer should carefully draft this agreement. Many a times, because of an agreement that is not well drafted it becomes possible for one of the parties to default and get away with it.

A long with this agreement, the agreed advance has to be paid by the buyer. After the document is drafted and verified it has to be signed by both parties and two witnesses.

Step 2: Prepare a title deed. You could get the title deed written by a government licensed “Document Writer”.

Even lawyers can prepare the deed, but the document can only be computer printed or typed, not handwritten. Only those who hold the “scribe license” can prepare handwritten documents. Make sure all the details mentioned are accurate.

Step 3: The land is to be registered in a sub registrar office. If there is incorrectness in the documents after registering, new documents with the correct details have to be registered and depending on the incorrectness, the registration expenses will have to be repeated.

Make sure that the title deed is registered within the time limit mentioned in the agreement.  Along with the title deed, the other documents that are required for registration are:

  • Original title deed
  • Previous deeds
  • Property/House Tax receipts
  • Torence Plan (optional) etc. plus two witnesses are needed for registering the property.

Note:
Torence plan is a detailed plan of the property prepared by a licensed surveyor that will have accurate details of the measurements including width, length, borders etc. This plan is needed only in some specific areas.

For land costing more than 5 lakhs, the seller should submit either Pan card or Form Number 16 during registration.

Step 4: The expenses involved during registration include Stamp Duty, registration fees, Document writers/lawyer’s fees etc.

The stamp duty will depend on the cost of the property and varies from location to location. 2% will be charged as the registration fees. Document writer’s fee also depends on the cost of the property and varies with individuals. There is a percentage prescribed by the government as Document writer’s fee and they cannot charge more than the prescribed limit.

Process of registration at the sub-registrar’s office:

  • Take all the documents mentioned above.
  • Submit the document along with “input form” at the token window and get the token number.
  • Wait till the token number is announced.
  • On token number being announced, all parties to the document must present themselves before the sub-registrar to admit execution of the document, photographed, thumb impression and signature taken on additional sheet of paper in presence of sub-registrar.
  • Pay the required registration fees and computer service charges in cash as per the receipt (Computer service charges are @ Rs.20 per page)
  • The document will be returned within 30 minutes of getting the receipt

Note: Please deal only with Officers and staff of the Registration Department who                                 always display government identity card with Government Seal.