Buying land in India can be a lucrative investment option, as it offers the flexibility to build your dream home or use it for commercial purposes. However, it also involves certain risks and challenges, such as legal disputes, encroachments, fraud, etc. Therefore, it is essential to do thorough due diligence before finalising a plot deal. Here are some important things you should check when buying land in India.
1. Title and Ownership
The first and foremost thing to check before obtaining a loan for land purchase is the title and ownership of the land. You should verify if the seller owns the land and has the legal rights to sell it. You should also check the history of the land and trace the title for at least 30 years to ensure no disputes or claims on the land. You can ask the seller to provide the original title deed, sale deed, property tax receipts, and other relevant documents. You can also consult a lawyer to verify the authenticity and validity of these documents.
2. Encumbrance Certificate
An encumbrance certificate is a document that certifies that the land involved in a loan against property is free from any liabilities or charges, such as mortgages, loans, litigation, etc. It is issued by the sub-registrar office where the land is registered. You should obtain the encumbrance certificate for the land for the last 30 years to ensure no pending dues or legal issues on the land. You can also check the online portal of the state government or the National Land Records Modernisation Programme (NLRMP) for the encumbrance status of the land.
3. Non-Agricultural Order
In India, all land is deemed agricultural land by default unless the government has designated it for some other purpose. Therefore, if you buy land for residential or commercial use, you should check if the land has a non-agricultural (NA) order. An NA order is permission granted by the revenue department to convert agricultural land into non-agricultural land. Ask the seller to provide the land's NA order, the receipt for the conversion charges, and the land use certificate.
4. Approvals and Permissions
Before buying land, you should also check if it has all the necessary approvals and permissions from the concerned authorities, such as the municipal corporation, development authority, town planning department, etc. You should also check if the land complies with the zoning regulations, building bylaws, environmental norms, etc. Ask the seller to provide the layout plan, sanction plan, commencement certificate, completion certificate, occupancy certificate, and other relevant documents for the land.
5. Taxes and Khatha
Another essential thing to check is the taxes and khatha of the land. Taxes are the levies the government imposes on the land, such as property tax, capital gains tax, stamp duty, registration fee, etc. You should check if the seller has paid all the taxes on the land and has the receipts for the same. Khatha is a document that records the details of the land, such as the owner's name, size, location, etc. It is issued by the local civic body and is required for paying taxes and obtaining loans. You should check if the seller has the khatha for the land and if it is updated and transferred in their name.
6. Local Laws and Regulations
Before buying land, you should also know the local laws and regulations that govern the land. Different states and regions have different rules and restrictions on land transactions, such as the ceiling limit, land reforms act, tenancy act, etc. You should check if the land falls under these laws and regulations and if you can buy it. You should also check if the land is affected by any government schemes or projects, such as road widening, metro rail, etc., and if it impacts the value and usability of the land.
7. Tenure and Type of Land
Another thing to check is the tenure and type of land. Tenure refers to the nature of land ownership, such as freehold, leasehold, or cooperative. Freehold land is the most preferred option, giving you full ownership and rights over the land. Leasehold land is the one that is leased from the government or a private entity for a fixed period. Cooperative land is the one that is owned by a group of people who have formed a cooperative society. You should check the tenure of the land and the terms and conditions of the lease or cooperative agreement, if any.
Conclusion
To sum up, keeping these parameters in mind will ensure you do not fall trapped in any disputed property.
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