Dev Singhraha
Relocation Expert
It is said that the buyers should be always careful, take due diligence during property transactions. Being careful is a necessary step in the home buying process and refers to the crucial steps that all buyers should take to measure the risks associated with the property you are planning to buy. This basically means that the buyer should do his or her homework by checking all necessary documents before making the purchase.

Although property lawyers carry on due diligence throughout the property transaction but buyers should also understand the basic terms used in the report and what do the terms actually mean in order to mean to make a wise decision. With the help of due diligence all facts related to the history of the property, title and other such details are confirmed.

There are two types of due-diligence reports

  1. Full search report: a full search due-diligence report is generally conducted for a title period that dates back 30 years from the date on which the seller came into existence. The report comprise of all the details related to the history of the property.
  2. Limited search report: this report is prepared for a property transaction wherein the property is taken on lease. It is restricted for a period of 15 years.

Points to check in the due diligence report

The due diligence report should specifically state the legal capacity of the seller. The present owner or the predecessor owner or title holders should not be a minor or someone of unsound mind.
  • If the owner of the property is a minor then the property cannot be purchase or leased without the permission of the competent authorities.
  • If the property owner is of unsound mind then a person appointed as the guardian by the court under the Mental Health Act, 1987, can sell the property on behalf of the owner.
The report should also mention the nature of the present owner’s right on the property.

If the property have joint owners then an NOC is required from both the co-owners.

If the property is held by a Hindu Undivided Family then check the family tree and recheck the facts accordingly.

If the property belongs to a society, trust or a partnership firm then checking the copy of the partnership deed becomes necessary.

The buyer should check whether the seller have paid all the taxes or not. Taxes such as property taxes should be cleared by the seller till the time the seller have held the property.
  
Make sure documents are in placeOccupation and completion certificates: Occupation certificate is given to a building by the municipal authority after verification of all supporting documents. The possession of flat is valid only after it receives a completion certificate and an occupation certificate.Sale deed: You must check the original sale deed which should be in the name of the seller and ensure that property is not mortgaged.Power of attorney: When the seller is not physically present to sell the property, he might appoint an agent with the power to sell by giving him a power of attorney (PoA).  In case of the owner is an NRI and the PoA is executed in a foreign country, it should be notarised before the Indian Consulate for the purpose of authentication. It needs to be attested by the sub-registrar, too.Allotment letter and possession letter: When a property is acquired from the State Industrial Area Development Board like the Delhi Development Authority, documents relating to allotment, lease-cum- sale agreement, possession certificate or builder-buyer agreement needs to be checked.Land records and mutation entries: These are the record of rights, tenancy and cultivation, issued by the registrar of land holdings.

They could be obtained from the Tehsildar’s office.Khata extract and certificate: For any registration obtained after paying the tax, a khata certificate is issued to the owner of the property or to his family members. This certificate is required to apply for water and electricity connection.Additionally, you should also check whether a green clerance has been given to the project.
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