Are legal checks mandatory for new properties?

Due diligence is an essential part of property purchase be it commercial or residential property especially in India where litigations are on the rise. When one thinks of owning or investing in a new property which is a crucial process and involves lot of money as well one should necessarily take precautionary measures just to avoid future litigations.

Few of the mandatory checks that a purchaser while buying property needs to do are:

• Check whether the title is clear.
• Check that there is no encumbrance on the property. 
• Check that the property is not mortgaged. 
• Check that the property is constructed according to the approved plans.
• Check the Completion Certificate (CC) and the Occupancy Certificate (OC) in case of newly constructed properties. 
• Ensure that there isn’t any builder’s loan pending on the property and if at all there is a loan, insists on a bank NOC. 

The realtors suggest certain guidelines and state that it’s legally not advisable to buy a property at the pre-launch stage although the offer may seem lucrative as the prices are low but there are no legal rights or interests being created at this stage. Even if someone buys a resale property one should still insist on the original legal deeds and should get a proper due diligence conducted on the property to ensure that there are no encumbrances. 

 
When the experts were asked about the ways of checking the authenticity of a property claimed by the builders the answer was to get a thorough due diligence done both from legal and technical point of view.

 
Regarding the credibility check of a local builder the experts feel that there is no steadfast way to do it. The ways are that one can get the financials audited by a Chartered Accountant if the builder allows. Although a good track record for the last three or four years may indicate that there was good financial standing. Searching on Google on the internet about the builder can be a better option. Different aggregator sites and review sites can be browsed by checking the reviews about the builder. 
The question often arises in the minds of the customers that whether they should trust reputed builders. The people who are already stuck in legal hassles can get recourse which depends upon the termination clause which is there in the agreement being entered into. In case the seller represents a clear and sellable title, one may adopt proceedings. In case the property is being bought with the knowledge of the legal hassles then negotiation and amicable and mutual settlement may be of help. 

 In case one is buying a land plot with the Gram Panchayat one should ensure that the proposed plot is properly demarcated and a separate revenue card is available for that particular plot. A thorough due diligence regarding that plot is strongly advisable. 

The expert’s advice to the seller is one should give the photocopy of the title documents to the proposed buyer. However the seller should collect a sum as earnest money deposit to ensure the authenticity of the buyer. 

Not withstanding all these hassles and the paraphernalia attached with the purchase of the property one must keep in mind that buying a property is a lifetime affair involving one’s life time saving. If one have to spend few more bucks in due diligence and investigation it is always advisable rather than getting stuck in legal hassles later.