Purchasing a resale flat is a profitable purchase from the perspective of a buyer. What can be a better deal than getting ownership of a flat at a price lower than the market rate? Moreover, when you buy a flat in resale you save the money that you spend in paying house rent. Instead you can use the amount to pay the EMIs of your home loan opted for buying the resale flat. You can also take possession of the flat immediately after the purchase without waiting for months or years.
However, since a resale flat has changed multiple hands in the past, the process of its purchase involves several complex legal procedures and technical implications. Hence, before taking the final decision of purchasing a resale flat in Bangalore or in any other city in India, you should check and verify all the property papers and legal documents involved in the purchase in order to ensure that the flat has all the required government approvals and the seller has the right to sell it.
You need to have the entire chain of documents and agreements related to the property. You should also acquire and verify all other agreements and papers pertaining to the buying and selling of the flat till date. Here is the list of the documents that you need to check before purchasing a resale flat:
- Title Report - You should ideally conduct a Title Search at the Registrar’s office in order to retrieve the chain of documents that reflect the history of the flat. Once done you will be provided with a written analysis of the flat in the form of the Title Report containing its description and other information related to its tax rate, title holder’s name, joint encumbrances along with details of property tax, liens, and mortgages associated with it.
- NOC from Bank - It is vital to check if the flat is mortgaged against a loan. If there is any loan on the flat check its debt status. In order to ensure that all the pending dues have been paid back to the bank, ask the seller to get a No Dues Certificate from the concerned bank. This certificate assures that the bank has received all the dues from the seller and there are no more dues related to the flat and you can buy it without any worry.
- Building Approval Certificate - An illegal construction can give you trouble later. Hence, you should verify whether the flat is built following a building plan approved by the local municipal authority or not. This plan will reflect the blueprint of the flat, its layout, utilities, and other equipment. If any extra unapproved construction has been carried out there is a risk that the flat can be demolished or declared unfit for occupancy in the long run.
- Completion/Occupancy Certificate - The Completion Certificate is issued by the municipal authorities on the completion of a project and an Occupancy Certificate is issued by a local government agency after the project is declared suitable for occupancy. Thus, it is important to collect both documents in the previous owner’s name in order to verify that the flat is constructed following the approved plans and other legal guidelines of the authorities and is fit to be occupied. You will be asked to provide these at the time of its legal verification.
- Encumbrance Certificate - Make sure to check the Encumbrance Certificate (EC) which ensures that the property has no dues, the title of the property is clear and marketable, and it is not partially sold to some other person. It will also inform you about the legal issues associated with the property or any other complaints. Moreover, all the transactions related to the flat that you are going to purchase will be displayed on this certificate.
- Utility Bills - Checking the utility bills such as water bills, electricity bills, gas bills, etc. is an important part of property verification. It will let you know if all the bills have been paid on time or if there is anything that is yet to be paid. You should also make sure that the bills that the seller has produced against the flat is in the name of the owner.
- Latest Tax Paid Receipts - You should check all the latest tax receipts before buying a resale flat. This will ensure that there are no outstanding dues attached to the property. This will also ensure that the previous owner had been paying the taxes on time and there is no involvement of any fraudulent activity.
- No Objection Certificate (NOC) - Don’t make any payment towards the resale flat before checking the No Objection Certificates (NOCs) from the competent authorities. NOCs are given out by different establishments such as gas, water board, electricity, safety, sanitation, etc. A seller can’t legally sell a property without providing NOCs to the buyer. Hence, if the seller is not able to provide you NOCs for the flat, it will be wise not to buy it.
- No Dues Certificate from Society - If you are buying a flat in a Co-operative Housing Society it is vital to get NOCs or No Dues Certificates from the society. These documents certify that the seller has abided by all the society rules and is not liable to pay any dues. You also need to procure letters from the society stating the year of construction of the building, the built-up area, and the number of floors and lifts. The NOC also signifies that the society has no objection to transfer the Share Certificate to the buyer.
- Title Deed - Make sure to procure the original ‘Title Deed’ of the flat which signifies the sale and transfer of property ownership from the seller to the buyer. It will contain the seller's name, details of the loans, if there are any, and other information pertaining to the property. This verifies that the flat has a marketable title and ensures that the seller has clear ownership of it. Once the title is transferred to your name make sure to collect the Immediate Title Deed as it will be the primary proof of your ownership.
- Sale Deed - The Sale Deed is a document which acts as the chief proof of ownership for the sale of a property in the future. It must be registered in the Registrar's office after the purchase of the flat. It is the most important document that you have to acquire after the title of the flat is transferred to you by the seller in the form of Title Deed. It is essential to go through all the terms and conditions before signing this core legal document.
- Possession Certificate - The certificate is required while purchasing a privately built resale flat. This document is handed over to the buyer after he/she has physical possession of the property. It is issued by the builder of a flat to its first owner. Hence, when you are buying a resale flat it is important that you obtain the possession paper from the seller. It will not be reissued to you at the time of selling the property, rather it will be handed over to you by the seller after you get the ownership in the form of Sale Deed.
- Share Certificate - While buying a resale flat in a cooperative group housing society, you need to get it transferred to you by means of a new Share Certificate issued by the society. It will contain the name of all the previous owners. Thus, once you receive the Sale Deed, collect the original Share Certificate from the seller which has to be submitted to the Society along with a transfer form mutually signed by you and the seller. After you submit the document, a new Share Certificate will be issued to you by the Society entitling you as the new owner.
All these documents form a crucial part of the chain of documents that you need at the time of buying a resale flat. You are also required to submit these to the bank while applying for a resale home loan. Hence, if any of these documents are missing or the seller is unable to provide them it is suggested not to buy the flat as it can land you in trouble in the future during property sale or while applying for electricity, water or other services from the respective authorities.
- Do I have to get my name mutated while purchasing a resale flat?
It is not compulsory to get your name mutated while purchasing a residential resale flat. Since mutation is not the proof of ownership you can buy the flat without it. However, the mutation is important to get the property recorded in your name in the land revenue department. It is also required during the transfer of ownership from one individual to another during the sale/transfer of the property. Hence, you must get your name mutated in the revenue record within 6 months of the purchase.
- Can I apply for a home loan to buy a resale flat?
Yes, you can apply for a home loan to buy a resale flat. Several top banks in India offer low-interest rate home loans for buying resale properties. You can also get your home-loan pre-approved from the bank where you already have an account. This will reduce your hassle and your loan will get sanctioned within a few hours of placing the request.
- Which documents do I need to submit while applying for a home loan for a resale flat?
Banks ask for several legal documents for approving a home loan for buying a resale flat. Though the required documents may vary from one bank to another, here are the most important documents that you need to submit while applying for a home loan to purchase a resale flat:
- Agreement to Sell (ATS)
- Chain of Title or Sale Deed
- NOC from the society or other concerned bodies
- Share Certificates in case of societies
- Title Report
- Occupancy/Completion Certificate (OC)
- Encumbrance Certificate (EC)
- Is it important to check the tax paid receipts while buying a resale flat?
Yes, it is very important to check all the latest tax paid receipts while you are purchasing a resale property. This will enable you to know whether the property has any outstanding dues or not. If there are any outstanding dues attached to the property you should at first, ask the seller to settle the dues before selling the property. You should also ensure that the seller doesn't have any other dues owed to the building or society.
- What are the documents that need to be submitted in the sub-registrar's office during the purchase of resale flat?
The Sale Deed is the most important document that needs to be submitted. Other than this, you will also have to submit a letter from the society which contains details such as the year of construction of the building, the number of floors and elevators in the building, the built-up area of the apartment, etc.
- How to verify the authenticity/originality of the documents provided by the seller?
You can verify whether the project approvals are genuine or not from the sanctioning authority's office or the corporation office. The ownership documents can be verified from the office of the Sub Registrar from where their registration has been done. In order to verify the Share Certificate, talk to the concerned society who has issued them.
- Which documents are required for the registration of a resale property?
In order to duly register a resale property in your name, you need to get a new Sale Deed, your PAN card, and photographs.
- How to purchase a resale flat which is mortgaged?
In case you are planning to buy a mortgaged flat at first ask the seller to obtain a release certificate from the bank stating that it is ready to provide the property documents to the buyer once the full payment of the loan is done. In this case, the seller must give an undertaking to the bank that he/she has agreed to give property documents to the buyer after closing the loan. Upon receiving the document, you can transfer the purchase money to the bank account of the seller either in cash or by means of a home loan. The bank will immediately release the original property documents together with a Non-Dues Certificate or NOC.
- How to know whether the seller is the true owner of the property or not?
Before you purchase a resale flat it is very important to check whether the seller is the true owner of the property or not. In order to confirm the ownership of the seller, you should ask for a clear ownership history in case of properties that have been sold and purchased multiple times. The authenticity of the documents can be established by the administrative officer who has registered the property.
- What should I do to check whether the seller has cleared the dues with the society?
You need to get a no-objection certificate (NOC) from the society in order to confirm that the seller doesn’t owe any dues with the society.
