Real estate is a part of every individual's life. Sometime or other you either decide on selling your existing property or plan to buy a new one. You should be very careful about proper documentation to avoid future troubles.
Sale Agreement:
Every important details like area, number of the apartment, cost, payment modalities, payment tenure, and date of possession are mentioned in this document.
Title deed:
Title deed is extremely important as this is the only document that declares that the property really belongs to you. If you wish to avail some loan against your property, the original title deed has to be produced. If you sale your property, you must retain a copy of it. Every original paper related to the original title has to be given away to the new owner. But, you should always keep copies of the entire set. You will be able to calculate your long-term capital gains with these papers.
But do not handover the original documents if you intend to sell part of your property. Here, as you bought the whole property but selling it in parts, you should retain the original documents. True and certified photocopies of the original papers are to be handed over to the purchasers.
Letter attesting property ownership:
There are many cases where the seller mortgaged the property but did not inform the buyer about it. You must ask for two very crucial documents to avoid such fraud.
The first document is the original copy of the title deed. The owner will not have it if it is being mortgaged. The second will be the letter attesting the property ownership. This document is given while buying land or when the transaction amount is high. Otherwise, the lawyer of the buyer will have to investigate before the deal. This can be done either by confirming from the neighbors or by checking the records of the registrar of assurance's office, where record of all properties mortgaged are archived. If the buyer ever decides to mortgage the property, he or she would need these two documents.
Certificate that attests payment of income tax dues:
A seller, who has defaulted income tax, can legally be prohibited from selling his or her property. The seller can be restricted to sell until all dues are cleared. The seller will have to get a clearance certificate from the Income Tax department stating that all dues are cleared. It can be procured within 7 to 10 days.
Memorandum of understanding:
A memorandum of understanding is to be signed stating all the payment terms and conditions if you are going to make the payments in parts. This single document would record the details regarding the amount and the tenure, and, therefore, you should be very careful in checking the owed sum.
Form 37I:
If the property value is over Rs 75,00,000 (for Mumbai), , Rs 50,00,000 (for Delhi), Rs 25,00,000 (for cities like Ahmedabad, Bangalore, Calcutta, Chennai, and Pune), and Rs 20,00,000 (for Baroda, Bhopal, Bhubhaneshwar, Chandigarh, Cochin, Coimbatore, Cuttack, Faridabad, Ghaziabad, Hyderabad, Indore, Jaipur, Kanpur, Lucknow, Madurai, Nagpur, Noida, Patna, Surat, Trivandrum, Gurgaon property), you would require government permission to carry out a transaction. The buyer and the seller both will have to file the document and it would take almost three months after the procedure is initiated.
Stamp duty:
Stamp duty is imposed by state governments on all property-related agreement and, therefore, it varies from one state to the other. The amount of stamp duty will be decided on the basis of the value shown in the sale agreement. For example, a purchase worth Rs. 10,00,000 in Maharastra would need Rs 38,750 as stamp duty. For any amount over Rs 10,00,000 would need 8% of the value over Rs. 38,750. Stamp duty is to be paid during the registration of the property.? ???
Registration:
Registration is the process of official recording of the agreement, which is done by a state government-appointed Registering Officer. It is carried out after a certain number of days of the due execution date. The amount and date varies from state to state. In Maharastra, it is four months from the execution date and the rate is 1% of the amount with maximum of Rs. 20,000.
For agricultural land dealing, a document, Fard, has to be prepared that would have all the necessary details like ownership, land quality, mortgage details, if any, who is presently cultivating the land, etc. You must procure the most recent copy of the Fard from the owner. Once the transaction is complete and the sale deed is prepared in your name, meet the local 'Patwari' to apply for the new Fard. Be sure the new document has your name as the new owner and cultivator of the land. For more details on real estate India, visit MastGhar.com.
