Land buying guide

for India

Table of

Contents

Title Check

Appoint a Land

Surveyor

General Power

of Attorney

Encumbrance

Certificate

Mutation

Change of Land

Use (CLU) Approval

PTCL Endorsement

(Prevention of Transfer

of Certain Lands Act)

Contents of a

Sale Deed

Doctrine of

Caveat Emptor

Title check

First check and the most important one is verifying

whether the seller actually has the right to sell the

property which you intend to buy f rom them or not?

Always confirm beforehand whether the seller actually

has the right to sell or not, by appointing a property

lawyer .

Check the authenticity of the title deed through the

Title Search Report submitted by the lawyer.

Even though a lawyer will do the title search, here is a

list of all the essential components which the title

search document should have:

(i) Full description of the property

(ii) Full description of the title holder including his name ,

address and proofs related to these li e Aadhar card k .

(iii) Any municipal or other taxes pending

v Chronological description of all the titles going back

(i )

to at least 30 years.

v During this check, whether all of the title deeds were

( )

v
a aila ble or not? Whether the original copies were available
or photocopies or certi fied copies?

v Whether the title chain was intact or was it broken

( i)

some where? If yes then what was the reason? If not having
the original title deed is the reason then ho w was the title
deed o wner verified? Here the lawyer ’s opinion will be stated.

v
( ii) Whether the property in question requires any special
permission for its sale from the local authority . If yes then has
the permission been obtained or not?

v
( iii) The date and details of when the lawyer visited the sub
registrar s of ’ fice to carry out this title search and also the
receipt which he has got with respect to this.

(ix) The date and details of when the lawyer visited the sub
registrar s of ’ fice to carry out this title search and also the
receipt which he has got with respect to this.

(x) Final certi ficate from the lawyer regarding whether the
property is mar eta k ble or not? Marketable means that after
buying the property you will have the absolute right to sell it or
not ?

Note:
Have a written agreement with your lawyer stating "I
shall act in the capacity of a legal representative of my

client and shall at all times act only in the best interests

of my client ." This is also known as fiduciary duty.

Appoint a
Land Surveyor

You should appoint a land surveyor to measure the

exact position of the property. An official surveyor can
be requested from the local teshildars.

The surveyor will measure the exact plot of land and

verify whether the dimensions match the original sale
and title deeds or not.

The property descriptions in each transfer document need to

be checked to ensure that the same exact property has been
transferred each time. Any discrepancies in this can cause
disputes on title and your right to fully enjoy that property as
it’s legal owner.

The land use approval might restrict you from certain

activities and hence should be checked by the local
surveyor to avoid legal disputes.

Floor Space Index (FSI): Floor Space Index also known as

Floor area ratio is the ratio of a building's total floor area to
the size of the piece of land upon which it is required to be
built. This is defined by the local town or state’s planning
department and hence must be checked through the
lawyer.

Local Development Plan: If you are buying land from a

developer or in a place which is not yet fully developed
with roads, be sure to check the local development plan to
understand exactly where the roads are and how much is
their minimum width.

General Power
of Attorney

Avoid buying a land basis General

Power of Attorney (GPA)

You should never buy a property just on the basis of a general

power of attorney or a GPA.

But there might be instances where property can be sold through

a GPA but do ensure that the GPA has special clauses allowing the
holder to

(i) Sell the property on the owner’s behalf

(ii) Sign the sale deed on the owner’s behalf

(iii) Do all acts that may be necessary to ensure

legitimate transfer of title from the owner to the
buyer.

Note:
the GPA should mention the reason why the owner is not
personally present for the sale.

Transfer in case of an NRI Owner

If the owner is not residing in India and the GPA is being signed by the
owner outside India, the GPA must be apostilled or notarised before it
can be used in India.

Depending on the country of residence of the owner, either an

apostille or a notary certificate verifying the authenticity of the GPA
would be required for it to be considered valid in India.

Without this process, the GPA will not be considered valid in India and
the transfer will not be valid and can be contested at any point in time.

Encumbrance
Certificate

This is a check which has to be done in order to verify whether

there are any pending dues or liabilities on the property or not.

(i) This is a necessary check because you would not want to

buy a property which has any government or other dues
pending on it

(ii) In a worst case scenario, the government can even seize

or foreclose the property.

(iii)This is a check which the lawyer can perform while inspecting

the title but something which you also need to be aware of.

For example, the land being mortgaged with a bank against a

loan or any pending municipal charges (like, property tax)

Mutation

(Locally known as, 7/12, dakhil khariz)

For example, the land being mortgaged with a bank against a

loan or any pending municipal charges (like, property tax)

The mutation process has to be completed by the buyer once

the payment has been made and the sale deed executed.

(i) Through this process, you have to get the title of the
property changed in your name in the revenue records of the
state where the land is in

(ii) The owner is liable to pay any taxes on the property and
thus will have his name in the tax receipts.

(iii) Mutation also serves as a good title check. You can check the
revenue records for the name of the property owner. In case the
owner’s title is good, the revenue records will have his name.

You can also ask the seller for the property tax receipts to
verify this. If the seller hesitates or denies to give them to you,
then there is definitely some issue with the title.

Change of Land ₹

Use (CLU) Approval

In India, more than 60% of land is considered to be agricultural

land and you cannot build a house or utilise it for any other
purpose. So when you are buying any property to build a house or
for any purpose other than agriculture, ensure that the seller has
the CLU approval and NA, i.e., Non Agricultural certificate.

You can ask the seller to

show this to you.

 PTCL

You can ask the builder or the seller to get a PTCL

endorsement. This is to ascertain that the property is

not on land granted to person(s) belonging to the SC/

ST communities.

A sale made to a non SC/ST individual f rom an

individual of the prescribed category is not valid for

PTCL Lands.

Either the Tehsildar or the District Commissioner can issue

this document.

Contents of

a Sale Deed

What should a sale deed contain?

Sale deed is the document through which the

transfer of ownership of the land takes effect.

(i) A sale deed should always be registered in the office of

the sub registrar

(ii) This should be done within 4 months from the date

when the sale happened,failing which results in a penalty

and the sale deed being declared invalid .

(iii) This should be done within 4 months from the date when

the sale happened,failing which results in a penalty and the

sale deed being declared invalid.

(iv) Always insist on a certificate of sound mind attested by a

medical health professional so as to save yourself from years of

court battle and also have two people as attesting witnesses or

executing witnesses to the sale deed.

Why Certificate of Sound Mind?

The sale deed is essentially a contract which is governed by

the Indian Contracts Act. Under this, an individual can only

enter into a contract if he satisfies certain conditions which

primarily include:

(i) Has attained 18 years of age

(ii) Is of sound mind, and

(iii) Not disqualified by the law of the land to enter into a

contract (alien enemy, insolvents, felons or convicts, corporations

and married women who are not allowed to enter into a

’
contract on behalf of their husband for the husband s property )

Doctrine of
Caveat Emptor

The sale deed is essentially a contract which is governed by

the Indian Contracts Act. Under this, an individual can only

enter into a contract if he satisfies certain conditions which

primarily include:

(i) Do their entire due diligence (through a lawyer) to ensure

they have done everything to establish the title

(ii) Attach all the due diligence documents to the sale

agreement and final sale dee d

The sale deed is essentially a contract which is governed

by the Indian Contracts Act. Under this, an individual can

only enter into a contract if he satisfies certain conditions

which primarily include:

Doing due diligence of your own also offers

you one more protection -

When you buy a property f rom a seller who is not legally

empowered to sell the property, but even after verifying

all the documents and going through all the checks, you

were still not able to ascertain this f raud.

If in future, the original owner comes to claim the property,

the court will protect your right as a buyer because you

bought the property in good faith and did all the due

diligence which you could. Your ownership will remain

intact.

Newspaper Advertisement

To further cement the due diligence process, before the

x
e ecution of the sale deed and making the final payment,

you can take out an advertisement in the local newspaper.

j
Through this, you can invite any ob ections f rom the

general public regarding the sale of the said property,

x
within a fi ed time period.