Introduction to Real Estate Investment
Real estate is one of the most promising and risk-free avenues of investment. For centuries, land has been an element of wealth, and people have always wished to possess it. For many people who have not stepped into the real estate market before, purchasing a property can be a daunting experience. Because real estate transactions are likely to be the investment of a lifetime, it becomes critical to understand the legal considerations that can ensure that the purchase is successfully completed.
Important Legal Aspects to Consider
To start with, these are a couple of important legal aspects to have in mind before making an investment in a property.
1. Verify the Title Deed
The title deed is a document that must be held dearly as it makes an individual the legal owner of a property. Until the title deed has been made without any flaws, the owner of a property cannot dispose of it. You can go to the Sub-Registrar’s office to look for the title deed and check the legal claim that is on the property. You should check the title for claims and also make sure that the owner of the property is the builder in its entirety. Come over to where the builder or the landowner has the property’s documents to ensure that the property is not encumbered.
2. Property Tax Receipts
Every year the builder has to pay the land tax on the property to safeguard the exact measure, character and legal registration of the land. When that is done, and all legal documents are being assessed, the land tax receipts ought not to be overlooked. Before selling a property, the builder has to clear any owing property taxes. Failing which, you may become liable to pay the same. So, as a buyer, it is your duty to check that any tax obligations are fulfilled by the builder prior to making the acquisition of the said property. For many legal matters or similar incidents that would impact the property purchases, all the information will be available in the Sub-Registrar’s office that you would require to know.
3. Obtain and Review the Encumbrance Certificate
Any property that you are considering purchasing should have no outstanding dues or litigation. An Encumbrance Certificate is a document which is issued by the Sub-Registrar bearing the encumbrance of the concerned property. You may reach the office of the Sub-Registrar to uncover further details on the title of the Property. On application, you can obtain that certificate pertaining to other encumbrances of a particular property. This is applied for and received online, confirming that the land is free of encumbrances and liabilities. It is also a confirmation title insurance policy.
4. Conversion Certificate or KLU Certificate
In cases where a structure has to be put up on agricultural land, a Conversion Certificate and a No Objection Certificate are required before commencing the work. This allows the land to switch its designation from an agricultural zone to a residential zone. Make sure that the property you are purchasing and planning to build is not built in violation of NOC and Conversion Certificate from planning authorities. Further, apply for and view the latest possession/location certificates and BTR, which will give you a comprehensive history of the land.
5. Approved Construction Drawing
To entice customers, a lot of contractors tend to misrepresent claims about the creations of a certain area. For any development, there has to be a sanctioned building plan that has been approved by the local area authority. This sanctioned building plan is supposed to be granted by the authorities only when certain specific documents are presented by the developer and such documents are legally valid and meet the building requirements. Please confirm that you have verified this document in order to prevent any legal issues in the future.
6. Certificate of CRZ clearance
If you are considering purchasing a waterfront property, please keep in mind the guidelines set forth by the Union Environment Ministry on Coastal Regulation Zone (CRZ) which overrides any local rules or laws. CRZ clearance is mandatory for all properties that are at a distance of 100 sq.m or more from water bodies such as lakes, rivers, seas, canals and mangroves managed under Kerala Coastal Zone Management Authority. If a building is to be constructed near a water body, which doesn’t violate the CRZ, then the builder in question needs an NOC from KCZMA. The intention behind these rules is acknowledging the need of preserving the coastal area. The restrictions depend on different parameters like population, ecological vulnerability, distance to the shore, etc. The CRZ maps and other legal and related data can be availed on the KCZMA website. A legal property consultant can also assist you in further understanding this issue in more detail.
7. Environmental clearance
In case the construction site area exceeds 20,000 sq.m. it is important that you have a clearance certificate from the Central Government’s Forest and Environmental Department. This is another important document to check before purchasing a property.
8. Necessary No Objection Certificates
- Fire Department: Construction starts with a NOC from the department and a final NOC is issued after the entire project is completed.
- Pollution Control Board: Both before the construction begins and after the construction is done, the Department issues Consent to Establish and Consent to Operate respectively.
- Aviation Clearance: If the zone lies within a twenty (20) kilometer vicinity of the airport, it has to be availed by the airport authority before the construction begins.
- Railway Authorities: If the construction site is in proximity of any railway line, the builder needs to get a NOC from the concerned railway department before proceeding for the construction.
- National Highway NOC: Where the development site is adjacent to a National Highway or it has direct access from NH.
9. Confirm RERA Registration
With effect from January 1st, 2020 all real estate developers are required to register their ongoing, as well as any future developments, with RERA in order to ensure that such developments comply with the required modern conditions and legal regulations. RERA registration applies to any project in which there is a plot of land that is to be developed that is 500 sq.m or greater, and there are eight or more apartments including all phases of the project. All projects for which the occupancy or completion certificate has not been issued are also required to rera registration. Therefore, you must always verify the Remaining Extension Registration Line Number before acquiring new assets. It was expected that all unfinished projects were to be registered by RERA by 3103202020 and subsequently that only projects which were approved by RERA were to be promoted. Therefore, purchasing property post April 1 2020 without examining RERA registration details is a complete no no.
10. Occupancy Certificate
An occupiers certificate, more commonly known as a completion certificate, is permission by the relevant authorities which allows a certain structure to be occupied. A building without it cannot be occupied or modified.
Conclusion
Foremost there could be a builder’s legal report that can be constructed, with the legal checklist and report of documents outstanding.
We trust that this legal checklist will be of aid to the buyers when they are looking out for properties in Kerala. Builder who are well known in Kerala shall make it a point that all legal papers and formalities are done well in advance. Ideally, a construction company should be forthright about legal affairs. We recommend that you engage the services of a qualified attorney before you purchase a property in this region.
Author – Dream Location
As the top real estate brand in the country, we at Dream Location aim at creating an easy, effective and clear platform for the home buyers for anything and everything that is related to buying a house. We have blogs that are well-written and educational providing relevant information in various aspects of the real estate industry.
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