While most assets may face periods where the value will decrease due to various factors, land is one of the very few assets that is impervious to fluctuations of the market, with its value only increasing as the years pass by. However, buying land has become a tricky affair, with blatant corruption surrounding the deals.
This includes creation of fake documents, demand for payment to be made in cash, and the sale of disputed land. So, if you are looking to a buy a piece of land as an investment or to build your home, here 5 things you should know and check:
1. Title Deed / Certificate of Title A title deed is a legal document that proves a person’s ownership of a property. So, when you are buying a plot of land, you should ask the owner of the land to provide the title deed of the land, and read it properly and thoroughly. Never accept a photocopy of the title deed; always ask for the original. As a buyer, you need to make sure that land is legally owned by the seller. You will also need to make sure that the seller has the full right to sell the land, and that he/she is the sole owner of the land. The title deed will answer these questions for you. It is advisable that you get the title deed reviewed by a trusted lawyer. This will ensure that there is nothing wrong with the title deed, and everything is in order. You can also ask the buyer for the previous title deeds of the land and have them verified by a lawyer.
2. Encumbrance Certificate As a buyer, the next thing you should demand to check is the “Encumbrance Certificate”. Encumbrance certificate basically says that the land is not under any kind of legal dispute. This certificate can be obtained from the sub-registrars’ office where deed of the land has been registered. Usually, the encumbrance certificate for the past 13 years should be taken and verified, but if you want to be extra cautious, you can ask for an encumbrance certificate of the last 30 years.
3. In case of Pledged Land In some cases, people pledge their land for taking a loan. In such cases, it would be wise to ensure that the loan has been repaid and no amount is due anymore. Ask the owner/seller to provide the “Release Certificate” to vet the same.
4. Property Tax Receipts and Bills Ask the seller/owner to provide original bills and receipts again. This will ensure all the payments have been made, as non-payment of property tax can lead to legal complications in the future.
5. In Case Land is Co-Owned or is Owned by a NRI If the land you intend to buy is owned by more than one person, it would be advisable that you get a release certificate from everyone involved before going ahead with the purchase. In case the owner is a NRI, then ensure that the seller of the land in India has “Power of Attorney” to sell the land on behalf of the NRI.
6. Get the land Measured When you are satisfied on every other front, the last thing to do is to get a recognized surveyor to measure the land. This will ensure that the area of the land is the same as stated by the seller. When you have made all these checks and are sure that there is nothing suspicious, you can go ahead and sign on the dotted line to purchase the land.