Key Documents You Need to Check Before Buying a Plot in India

Key Documents You Need to Check Before Buying a Plot in India

Purchasing a plot of land in India can be a lucrative investment option, as land prices tend to appreciate over time and offer flexibility for future development. However, buying a plot also involves a lot of legal formalities and paperwork, which can be daunting for a first-time buyer. In order to avoid any frauds, disputes, or hassles, it is vital to verify the legitimacy and validity of the plot and the seller before finalising the deal. This article will discuss critical documents you must check before buying a plot or obtaining a plot loan in India.

 

1. Title Deed / Sale Deed

 

The title deed or sale deed is the most important document proving the plot’s ownership and transfer. It contains the details of the plot, such as the location, area, boundaries, survey number, etc., as well as the details of the seller and the buyer, such as the names, addresses, signatures, etc. The title deed or sale deed should be registered at the office of the sub-registrar of the area where the plot is located, and the buyer should obtain a copy of the same. Before applying for a plot loan, the buyer should also verify that the seller has a clear and marketable title to the plot and that there are no encumbrances, liens, or disputes on the property.

 

2. Encumbrance Certificate

 

The encumbrance certificate is a document that shows the history of transactions and charges on the plot for a specified period, usually 10 to 30 years. The sub-registrar’s office issues it, and it helps to ascertain that the plot is free from any legal or monetary liabilities, such as mortgages, loans, court cases, etc. The buyer, should obtain the encumbrance certificate for the plot before obtaining housing finance and check for any entries that may affect the title or value of the property.

 

3. NA Order

 

NA stands for non-agricultural, and it is a document that certifies that the plot has been converted from agricultural to non-agricultural use by the competent authority. This is necessary for plots in rural or semi-urban areas, where most of the land is classified as agricultural by default. The buyer should check the NA order for the plot and ensure it is valid and current. The NA order also specifies the type and purpose of the non-agricultural use, such as residential, commercial, industrial, etc., and the buyer should ensure that it matches their intended use of the plot.

 

4. Property Tax Receipts 

 

The buyer should also check the property tax receipts and approval documents from the local authority, such as the municipal corporation, gram panchayat, development authority, etc., for the plot. The property tax receipts show that the seller has paid the annual tax on the plot, and the approval documents show that the plot has been sanctioned and approved for development by the local authority. These documents also indicate the dimensions, layout, zoning, and building norms of the plot, and the buyer should verify that they are per their expectations and requirements.

 

5. Stamp Duty and Registration

 

Lastly, the buyer must check the stamp duty and registration documents. The stamp duty is a tax that the state government levies on the transfer of property, and the registration is a process that records the transfer of property in the official records. The buyer should pay the stamp duty, register the sale deed or title deed at the sub-registrar’s office within the stipulated time frame, and obtain a copy of the same. The stamp duty and registration document serves as legal proof of the buyer’s ownership and possession of the plot.

 

Conclusion

 

Having a plot can be a rewarding investment, but it also calls for a lot of due diligence and verification of the documents. The buyer should check the title deed or sale deed, encumbrance certificate, NA order, property tax receipts and approval documents from the local authority, release certificate, and stamp duty and registration document before buying a plot in India. The buyer should also consult a lawyer and a property consultant for expert guidance and assistance in the process. By following these steps, the buyer can ensure a smooth and hassle-free transaction and enjoy the benefits of owning a plot in India.