A quick Google check shows that most people look for an EC or encumbrance certificate. While this is an important document, there is a lot more to it than only this. While we provide Home Inspection services many still don’t know about the documents required.
With headlines like these it is but natural for us to worry about whether our home is demolition-safe?
We will discuss what are the few things that one needs to be aware of and ensure so that your home is demolition-safe.
“In a ruling on May 4, the NGT barred construction activity within 75 metres of the periphery of water bodies and also set limits for buildings near feeder canals. Karnataka’s Environment Impact Assessment Authority has put on hold environmental clearance for 10 mega construction projects in Bengaluru, including large residential projects, for alleged encroachment of lakes and drains.”
Everyone desires a home close to a lake, forest or a hillock which is natural and a nice thing. But make sure that your property has not been built on encroached forest land, lake bed or even a rajakaluve. These are serious offences and are an absolute way to lose your hard earned money.
For example, consider what happened to the ill-informed in Kochi-
“Builders flouting rules is nothing new in India. They have repeatedly got away with it too. Think Adarsh Society in Mumbai that is yet to be demolished despite multiple violations. However, four builders who made a mockery of coastal regulation zone (CRZ) rules in Maradu, Kochi were not so lucky. All four buildings were demolished”
Even in our very own Bangalore we’ve seen over 400 houses demolished as they were deemed to have been constructed over encroached lake bed – “Is Your House Situated On A Lake Bed In Bengaluru? Chances Are It Might Be Demolished Soon”
There has been a push to also try and regularise illegal construction with fines – Penalty for unauthorised constructions in Bengaluru. This in our opinion only exacerbates the already miasmic situation. On the other hand the Karnataka High Court has said “Zero tolerance for illegal constructions: Karnataka High court”. At the very same time we also get to read things like this – “HC rejects BBMP report on 980 illegal buildings in Bengaluru”
Land Usage Rules
There are also several land usage rules that homebuyers must be aware of. For example, there are several restrictions about building near a water body like lakes, canals, rivers etc. This is applicable to any area whether it is coastal or interior. Apart from near water bodies there are also restrictions about construction on agricultural land. To ensure your home is safe from demolition ask your builder for a certificate issued by the appropriate local authorities that states that the land is fit for residential construction.
Even if your home is built on residential land you have to find out if the title of the property is clear and there is no ongoing dispute. There are various reasons that a property title may be defective too which will need your attention.
A defective property title can leave any homebuyer regretting their buying decision. Getting the title corrected could be a lengthy and financially exhausting process. Thus, it is advisable to do a thorough check for the clarity of the title.
Here are some reasons why a homeowner might get stuck with a defective property title:
1. Break in the chain of title
Human error while filing the paperwork related to the property transfer could lead to a break in the chain of title. When a lawyer misspells a name in haste or misses out the name of the grantor or grantee in a necessary field in the agreement, the result could be a defective title. Additionally, in the case of multiple potential inheritors of the property, the chain of title may break after the demise of the original owner and no clear Will.
An encumbrance is when a creditor or any third party other than the seller claims ownership of the property, which deters the transfer of the property. The claimant has the right to sell a part of the property to recover any pending dues.
A third party might claim legal ownership of the property that someone is trying to sell to you in case the seller fails to pay the specified debt. This is known as a lien, which the claimant files through the district registrar. If the debt is not paid in full, the creditor, in this case, the claimant, can repossess a specific piece of the property.
3. Conditional ownership
The rights of the owners are restrictive in a conditional ownership setup. Say, a property was developed by a development authority and given as leasehold property to a builder. If you were to buy such property from the builder, you would only enjoy conditional ownership of the property. You would be awarded a conditional title certificate, which would bar you from ownership benefits such as resale or transfer of title, securing a loan, etc.
4. Multiple buyers
A fraudulent seller may sell their property to multiple buyers and collect the amount for the sale from all the parties to clear pending dues. A scammer may go to extreme lengths to make the sale seem legitimate, sometimes forging multiple sale deeds.
5. Rediscovered Will
In case the previous owner passes away without any sign of a Will, the State assumes the responsibility of their assets. The buyer then assumes ownership of the property when the State sells the property to them. However, in the off chance that the Will of the previous owner is discovered years later, your rights to the property might be challenged based on the contents of the Will.
6. False impersonation or forgery
A person might falsely impersonate the owner of a property or go as far as forging important documents including the title in the sale deed. If such inaccuracies in the documents come to light after the property is transferred to you, it may jeopardise your ownership of the property, and there may also be serious legal implications of the same.
7. Survey disputes
The seller may show you false surveys of the property that depict boundaries which are not actually a part of the property. A third party might point these discrepancies out, claiming ownership over a portion of the property.
How to avoid title issues
To ensure, with absolute certainty, that the title of the property is free of defects and is marketable, it is best to consult with a legal expert. The lawyer can help you determine whether the sale deed is free of any hidden encumbrances and can help include airtight clauses in the agreement to safeguard your interest.
The lawyer prepares a land Title Search Report (TSR) to trace the history of the ownership of the property – how many entities the property has been owned by, before reaching the current seller. The lawyer checks with the registrar’s office and inspects all the property-related documents, after which they issue the title certificate. As an added precaution, you can also invest in a title insurance.
It is imperative that you have the sanctioned plans scrutinised or you do it yourself, because there have been many instances where builders have constructed beyond sanctions.
Example – A builder may get a sanction for building 20 floors, they end up building 25 floors in the hope that at a later stage it would get regularised. If that doesn’t turn out in your favour then those extra 5 floors will be up for demolition.
Homebuyers must take the approved plan from the builders and cross check with local authorities .
Power of Attorney
Many times property is sold through a person holding power of attorney (POA) on behalf of the owner. This POA should be closely scrutinised to ensure that it is properly executed.
Tenure of Land
This aspect should also be considered. For example, if the land is leasehold and the residue tenure of lease is short and if there is no provision for renewal on old rent, additional ground rent may be payable by the purchaser on renewal of the lease. It is also possible that there may be no renewal clause at all
NOC and Dues
Although no-objection of a society is not required for sale as per the new model bye-laws, it is preferable to obtain such a no objection as well as a no dues letter from the society if the premises are in a society.
In case the building is not conveyed to the society by the builder, then no objection of the builder should be obtained. It should be verified that the seller has paid all his dues such as property tax, service-tax, VAT and other outgoings to the society or the builder, as the case may be
One may investigate whether there are any proceedings against the seller under section 281 of the Income-tax Act, 1961. Further if the seller is a nonresident of India, TDS may be deductible from the consideration paid unless certificate for non-deduction or lower deduction is obtained from the concerned Income-tax officer.
Permitted user and Restrictions
This aspect should be verified as well. For example, one should see whether the property is residential or commercial as per the Development Control Regulations. Other factors such as heritage rules, set-back for road widening may apply to certain buildings, which should also be considered.
Proper documentation should be put in place for purchase of the property. The sale document should be properly stamped and registered and the original title deeds should be taken by the purchaser from the seller
Unsure how you can do all of this? Not to worry you can get in touch with us and we will put you across to the appropriate people
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