LEGAL GUIDELINES FOR BUYERS
Emerging markets like India have investment hotspots. The real estate boom in India in the last few years can be attributed to a combination of factors working in its favour .If we overview the property market in India real estate sector is growing day by day by the contribution of residential property sector. While the time may indeed be right for investing in residential property in India , one need to watch for certain potential pit falls. The laws for acquisition of property in India are still fairly complicated. The consequences of entering into a contract without being aware of the laws and procedures could be grave. However, it would be wise to acquaint yourself with at least the most fundamental aspects of acquiring property in India
Overview of legal guidelines would help you to understand the real estate legal organization, procedures for financing , buying ,selling , developing and leasing property . you can gather substancial expertise knowledge and experience in buying and selling of real estates and the full spectrum of real estate and have innovative solutions in a practical , constructive ,beneficial and business oriental manner. You can be aware of the most competitive cost and fees involved in a transaction and make sure that buyer / seller have the best possible prices. Our endeavour is to inform the buyer/ seller regarding risks , technicalities and legal considerations involved in the transactions. This awareness helps you to deal in following subject matters:

• Establishing title to the property.
• Ensuring all documents are properly executed and delivered.
• o Preparing and evaluating all the documents necessary to complete a
• transaction efficiently and correctly.
• Negotiating, drafting and reviewing sale and purchase agreements.
• A through physical inspection of the property in order to negotiate a better purchase price.
• Recommending financing options.
• Representations before various authorities such as Sub Division Megistrate, Registrar, Courts etc.
• Litigation.

Things you must check before you buy land !
The most important thing to do before you buy a particular piece of land you are interested in is to see whether the land can be sold by the person who is selling it. So before you even take the first step towards buying the land you are interested in, you got to check a few things positively.

1. TITLE DEED/CERTIFICATE OF TITLE OF LAND:-
   Title deed is a document providing a person s right to property as defined by a law dictionary. An advocate prepares a title deed after studying and scrutinizing the property and verifying that all is in order .
   So as a buyer what you need to do is ask the owner of the land you wish to purchase for the title deed and review it properly. Do not accept a Xerox copy of the deed .Ask for the original title deed .Sometimes the seller might have taken a loan and given in the original deed .
   You need to make sure through the title deed that the land is in the name of the seller. Also you need to verify that he has full right to sell the land and that he is the sole owner of the land and no one else is .It would be wise to get the title deed reviewed by a trusted lawyer just to make sure that there are no loop holes.
   As a buyer you may also ask for previous title deeds of the land and get these verified too by a lawyer.
   
2. ENCUMBRANCE CERTIFICATE:-
   The next step is to demand Encumbrance certificate. This is basically a certificate that says that the land is not under any sort of legal dispute .The encumbrance certificate can be obtained from the sub-registrars office where the deed for the land has been registered. The encumbrance certificate for the past 13 years should be taken and verified. You can ask for the encumbrance certificate of the last 30 years for more clarifications.
   
3. PLEDGED LAND:-
   Some people may have pledged their land previously for taking a loan . In this case, it would be wise to ensure that all the loan payments have been made and that no amount is due. Ask, the seller to produce the Release Certificate from the bank that is necessary to release all debts over the land legally.
   
4. MEASURE THE LAND AND IDENTIFYING THE AREA/ SPACE REQUIREENT:-
   Get a recognized surveyor to measure the land and see that the dimensions, area ,borders etc. are accurate as stated by the seller. You have to identify the carpet area of the property required i.e. the actual space available for usage. Usually area is quoted in terms of: a) Carpet area ,b)Built-up area and c) Built up area and super built up area are arrived at adding a certain percentage to carpet area. This factor varies from builder to builder and from property to property. You should clearly identify your carpet requirement and determine what you are paying for.
   
5. IF THERE IS MORE THEN ONE OWNER:-
   If there is more than one owner, it would be wise to get a release certificate from everyone involved before going ahead with the process.
   
6. THE OWNER IS N R I/P I O:-
   If the owner of the land is N R I(non resident of India), then the seller of the land in India should be given Power of Attorney to sell the land on behalf of the NRI. The power of attorney has to be signed by an officer of the Indian embassy in the presence of a witness. P I O is a person of Indian origin ,Reserve Bank has granted general permission to PIO regardless where they are resident of i.e. India or overseas to purchase property in India for residential or investment purposes.
   
7. INCOME TAX CLEARANCE (37-I AND 230 A):-
   A transaction is incomplete and invalid if no objection certificate from the appropriate authority is not obtained in case of immovable properties .when buying a property that costs over rupees 25,00,000 the Income tax requires you to inform the Income tax department , alongwith all the details of the property you are buying under the prescribed form 37-I. The idea behind this section of the Income tax Act is to make the accquistion ofproperty at the fair market value. The objective of this section is to try and cut out the black money transactions from property transactions.
   The seller must obtain a Income Tax clearance certificate u/s230 A of the Income Tax Act 1961 specifying that the seller has no dues/outstanding in terms of the Income Tax payable by him. It is necessary to submit this certificate at the time of registration of the property.
   
8. STAMP DUTY AND REGISTRATION:-
   Stamp duty is a charge in the form of taxes levied by the state government. Under section 30 of Bombay Stamp Act ,1958 stamp duty is payable as per true market value as per rates prescribed by the stamp office. The stamps can be purchased in the name of either of the executors to the instrument. The market value of a property refers to the price at which the property can be purchased in the open market on the execution of such instrument. The stamp duty has to be paid either on the property value stated in the agreement ,or the marketvalue, whichever is higher.
   The agreement is to be registered with the sub-registrar under the provisions of the Indian Registeration Act with a period of four months from the date of its execution.
   
9. TAKING POSSESSION OF THE PROPERTY PURCHASED:-
   Ensure that you receive the vacant and peaceful possession of the property on the date specified in the agreement. Is there a provision in the agreement for refund of the amounts due by the seller along with simple interest @9% p. a. from the date of receipt in the event the seller fails to give possession of the property by stipulated date or mutually agreed extended date. Inspect the flat with the amenities stated in the agreement and ensure that there is running supply of electricity and water in the premises.
   Conclusively check list for buying a property includes land titles, constructions permits and approvals from authorities such as:-

• Ownership of land in favour of the seller
• Conveyance of property in favour of buyer
• Urban Land Ceiling and Regulation Act clearance certifificate, if applicable
• Power of attorney in favour of developer.
• Permission to use land for non agricultural purposes
• Original plans approved by municipal authorities
• Commencement certificate issued by municipal authorities permitting developers to begin construction
• Occupation certificate issued by authorities certifyiny that the property is complete and fit for occupation
  

ACTUAL PROCESS AND FORMALITIES INVOVING IN 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.
The first step of actually buying the land is to 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/payment schedule.
• 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 I .e. plot no, area,property schedule, amenities are clearly specified.
• This agreement duly stamped and signed.
• Original stamped receipts and previous sale /conveyance deed in case of resale properties.
  
  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.
  
  The next step is to prepare a title deed. You could get the title deed written by a government licenced 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.
  

After the agreement is prepared, the next step is REGISTRATION.

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 expanses 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 AND
• Torence Plan (optional) etc plus two witnesses are needed for registering the property.

What is a Torence Plan?
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 his Pan card or Form Number 16 during registration.

THE EXPENSES INVOLVED
The expenses involved during registration include Stamp Duty, registration fees, Document writers/lawyers 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 writers fees also depend on the cost of the property and varies with individuals. There is a cost of the property and varies with individuals. There is a percentage prescribed by the government as Document writers fee and they cannot charge more than the prescribed limit.

THE ACTUAL PROCESS OF REGISRATION AT THE SUB- REGISTRARS 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.

KNOW YOUR RIGHTS- BUYERS RIGHT
A buyer of immovable of property has rights and liabilities. According to the Transfer of Property Act , buyers are entitled to some rights and have some responsibilities, which they need to fulfill statutorily. A buyer is should disclose to a seller any fact as to the nature or extent of the seller s interest in the property of which the buyer is aware, but of which he has reason to believe that the seller is not aware, and which materially increases the value of such interest.

Also the buyer is liable to pay or tender , at the time and place of completing the sale , the purchase money to the seller or such person as he directs. The payment should be as per the agreed terms and conditions. Where the property is sold free from encumbrance , the buyer may retain out of the purchase money the amount of any encumbrances on the property existing at the date of the sale, and should pay the amount so retained to the persons entitled to get the encumbrances released.
In addition to this , where the ownership of the property has passed to the buyer , he has to bear any loss arising from the destruction, injury or decrease in the value of the property not caused by the seller . The buyer becomes liable for any loss or damage to the property as soon as the buyer becomes the owner and the seller ceases to be the owner of the property .

More over , where the ownership of the property has passed to the buyer , as between himself and the seller, the buyer is liable to pay the public charges and rent which may become payable in respect of the property, the principal money due on any encumbrances subject to which the property is sold and the interest due later. Once the ownership has been transferred to the buyer, the buyer is liable to pay all the statutory charges like municipal taxes, property taxes, electricity and water charges etc.