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Property Due Diligence

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Are you buying your sweet home from a builder? This might be your most cherished dream. But hold on… Don’t you think it is high time that you need to check the property documents with due diligence. With Campa-Cola Compound demolition in Worli, Mumbai – 2013 still fresh in the mind it would be smart to know the verifications that you need to do to avoid the unfortunate fate of 140 families in Campa-Cola Compound in Worli.

So let us be sure on the property that you are willing to buy. How do you prove that you are Indian citizen? How do you prove that you are working in a company? Through relevant documents like and Election Photo Identification Card (EPIC) and Offer Letters. Likewise, we do need to check those property documents so as to not lose sleep over any issues later. Let us now look at the documents that are to be examined before you put ink on that dotted line to buy your dream property.

Land Record: Title deed is the most important document as it gives details about ownership, rights, obligations and mortgages on the property. So it validates whether the land where the project is coming up has been registered and development rights transferred. Get a copy of it from the builder and cross-check the information with the land record office.

Construction Clearances: A ‘certificate of commencement’ is mandatory to commence any construction of a property. The certificate is issued by the town planning and engineering department post the inspection of the basic foundation for a superstructure and building boundaries. This also means that the builder would have obtained the required licenses, sanctions and permissions for the map that are required before you can even start excavating.

Approved Planning: It is good to run an additional check and verify that the building plan and layout plan has been approved and no byelaw applicable in the area has been broken. Make sure that the floor where you have booked your flat has been approved in the building plan.

The layout should be in accordance with the National Building Code of India (NBC). NBC is a comprehensive guideline, a code, for regulating the building construction activities across the country. Get this document verified with the local municipal authorities.

Also, some projects claim a ‘green status’. In that case it should be either certified by the Indian Green Building Council or be rated by Green Buildings Rating System India (GRIHA), a TERI University initiative. The focus areas of all such certification for a building are energy, water and waste management. There are a couple of other rating systems also available right now in India, but GRIHA is the most popular and has standardized norms.

Land Use Certificate: It is illegal to have residential properties on a commercial or industrial zone. Apply to the urban development authority and check the certificate to ensure that the property you plan to purchase is in the residential zone. Sometimes the land will be in what is called a ‘converted zone’. Cities are expanding and often agricultural land is converted for non-residential usage by paying a fee to the government. In such a case, check for the endorsement order given by the tehsildar or deputy commissioner of the zone that licenses residential construction on that land.

Master Plan of the Area: Often builders claim future infrastructural development of the area such as upcoming metro or highway near the project. Don’t believe everything blindly. Look at the area’s master planning to verify. These plans are easily available with the town planning department.

No Objection Certificates (NOCs): The builder should also be able to give you a copy of the urban land ceiling NOC (if applicable), an environment clearance NOC as well as NOCs from the electricity, water and lift authorities, if there is one.

Apart from the threat of a legal battle, you also compromise on safety. “Illegal construction continues to mushroom in unplanned areas of our cities to accommodate the growing population. There is no homogeneity in terms of plot sizes, street widths, height, and gross built area in these locations. Old buildings that collapse are ones that have been built without proper permits and lack structural safety standards,” said Sachin Sandhir, managing director, RICS South Asia, a self-regulatory professional body dealing in land, property and construction.

You must remember that if the government decides to evict you from your house, which is proven to be illegal, you have no choice but to vacate. Living in the anticipation that the house will eventually get approved is like betting in a casino.

 

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