Legal Precautions You should take Before Buying a Property


It is very well known saying “Precaution is better than cure” and this proverb is quite suitable while buying an immovable property. In this article, Money Dial is telling you the checklist of legal precautions you should take before buying a property.

In India buying a property is not an easy job, so you must be aware of all the documents which you should check before you go to buy a property. There are few checklists as following

Legal Precautions you should take before Buying a Property

  1. Basic Paper of Property (Official Government Document):

Basic paper is an official government document; it is released by Government authority or government agency

For example, there is a development authority in Delhi ‘DDA: Delhi Development Authority’.

Suppose DDA has allotted a plot to Mr. ‘X’, so this is a basic document, which says that the origin of the property is from Government agency or a Government authorized a person, where DDA is the origin of that property, which is a Government authority.

  1. Registration Document:

Now suppose Mr. ‘X’ has sold that property to Mr. ‘Y’ then Mr. ‘Y’ must ensure that the registration document must be there in place, which says that Mr. ‘X’ has sold the property to Mr. ‘Y’.

  1. Payment Receipt:payment recipt

Along with registration document Mr. ‘Y’ should also ensure to have a payment receipt, which is legal proof of Mr. ‘Y’ has made the payment to Mr. ‘X’ through cheque or cash and Mr.’X’ has received the payment.

  1. Ownership Document:

Ownership document shows that how someone became the owner of the property. So if there is a chain of selling a property like Mr. ’X’ sold property to Mr. ‘Y’ then Mr. ‘Y’ sold a property to Mr. ‘Z’ and so on, in this chain of selling the property it is necessary to check that the person from whom you are buying the property, how he/she became the owner of that property, however, he is a first owner, second owner, third owner or ‘n’ number of owner.

Ownership of document provides you the complete information about the chain of sellers and finally the origin of the property. So in nutshell, a complete chain of the document is required.

  1. Base Documents:documents

There are a number of documents of origin property; like Allotment letter or Possession letter. So here you have to check three important things

  • Check, whether the seller, from whom you are purchasing the property, has made all the required payments to the concerned authority.
  • If the seller has made all the required payments to the concerned authority then ensure that all the payment receipts should be in place.
  • Plus, original documents whether it is Builder-buyer agreement or allotment letter or any other document related to the origin of the property, which clearly says that the transfer of the property has been done via proper registry or registration.
  1. Search Report:search result

In order to check the above documents, you can also contact the registrar office. There are particular numbers of sale deed; those are registered with the registrar, so you can look for a search report of the property you are planning to buy.

For search report, go to the concerned registrar office and request them to provide the search report of that property. For this report, they charge some normal fees.

This search report provides complete information that who is the real owner of the property and you can check that whether the person from whom you are buying the property is the same person or not.

The Search report will help you to identify the fake documents if any attached to the property. If you need you can also take help of any professional in order to bring out the search report from registrar office and to analyze it.

  1. Due Diligence of the Property:

Apart from search report, you can also go for due diligence of the property.

Basically, due diligence means taking a complete process of legal precautions with various ways like visiting the property, review all the documents thoroughly, calculating the involved cost and analyzing various facts before buying the property.

It is not an easy process, it takes time and very few people have an idea about how to perform due diligence while buying property. You have to give your time to perform the due diligence of the property.

So, for your convenience, we will discuss ‘How to perform Due Diligence before buying the property?” in our next article with complete detail.

One more important thing – once you have done with all the process and complete the transactions, you must ensure that the seller has paid all the bills till the date of transfer of the property.

Bills like: Electricity bill, water bill, and most important house tax. If the property is connected with any society then check whether the seller had paid the maintenance of the society till the date of transfer of the property.

If you check whether all dues have been paid by the seller till the date of transfer of the property you will save a lot of your money and escape yourself from bearing unnecessary expenses.

Also, watch the video on Legal Precautions you should take before Buying a Property:

Visit Money Dial to get an expert financial advisor on Home Loan.


About Author

Money Dial is your destination to gain knowledge and earn greater returns in the world of financial market. Through Money Dial, we aim to help you sail smooth in your finances, rise high on returns and invest on success with tips, advice and market gyaan. Whenever you need a little extra help, our team of financial experts is here to guide you through the complex financial world by simplifying it and providing expert solutions to your problems.