Buying a home is one of the biggest financial investments made by a first-time buyer which is why the whole buying process is elaborate with a lot of legal documentation involved. If you are a first-time buyer it is also natural to feel a bit overwhelmed with all the legal jargons and documentation process.
But given how capital intensive buying a home or property can be, it is extremely important to examine and verify these document to avoid pitfalls and ensure smooth and secure property investment. And the first step of this process is to make yourself aware of the legal documents involved while buying a home and this blog is going to provide you with the same.
Here is the list of key legal documents you need while buying a flat in Hyderabad:
Sale Agreement:
Any purchase and sale of the property are kick-started with the agreement of the sale and it is the first document prepared in the process, preceding the sale deed. It is a technical document that shows the willingness of the seller to sell the property in future upon satisfaction of all the terms and conditions the document outlines.
The sale agreement contains all the terms and conditions, description of the property that is being sold, negotiated price, status of legal encumbrances, mode of the payment, time frame upon which the property will be transferred, action recourse in the event non-completion of the sale and all the other matters related to the proposed sale.
Given the document has its own legal sanctity, few states consider sale agreements as legally binding only when it is registered at the office of sub-registrar. So we advise you to check the regulations of your local authority regarding the registrations for sale agreement. Since it is like a legal promise for transfer of ownership in the future the seller doesn’t have any right in the property until the sale deed is executed.
Approvals for building, layout & infrastructure:
Before starting the construction, the builder must ensure proper sanctions and approvals (both building and layout), water, electricity, sewage, fire safety, environmental clearance, and other infrastructure facilities from regulatory authorities. A most common mistake made by a first time buyers is to not thoroughly verify the approval status which may result in penalties and fines when the authorities arrive for spot-checking. The approval documents and No objection certificates state that the residential project in which you are planning to buy a flat in Hyderabad has got all the stated approvals and is steered clear of all the hurdles. If you are buying a flat from a builder then you must also closely scrutinise the building/layout plan before finalising your decision.
Encumbrance Certificate (EC):
The encumbrance certificate is another important document that plays a crucial role in buying or selling a property. Also called EC, the Encumbrance Certificate contains all the details of registered transactions made on the property up to a certain period of time. It stands as an assurance that the property you are going to purchase if free from legal and monetary liability (loan clearance). And hence it is crucial to obtain Encumbrance Certificate for the property you wish to purchase to not only seek the legal title but also to apply for a home loan as EC is mandatory for gauge loan eligibility. You can directly apply for EC at the sub-registrar office where the property has been registered. Given it contains details of all the transactions it is a crucial document in the buying and selling process. However, it may not contain all the necessary information that is mandatory to prove the ownership of the property. So, as for selling the property, possession certificate has to be obtained in addition to the EC.
The list doesn’t end there are more legal documents which are needed at different parts of the purchase process and as a first time buyer you need to be aware of this documentation.
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But that said, you must still make yourself aware of other documentation in the process which there are a few. You can know about Possession certificate and other key legal documents in our part-2 of Key Legal Documents You Need to Check While Buying a Flat in Hyderabad, here.