HOW TO EXAMINE TITLE DEEDS OF HOUSE PROPERTY?

(This article envisions what are the title deeds of a property, how to examine them and how to find out the construction is legal and authorized etc.)

Identifying a property for purchase is not just about the price of the property, locality, or amenities like gym, club swimming pool etc. Along with identifying a property that suits your above requirements, you have to consider two important aspects before entering into the sale agreement with the vendor. The first job is to ascertain whether the seller has absolute title over the property. The second aspect is that you need to find out whether the construction is legal and authorized. Your job is made slightly easier when you apply for the loan, as the lender also looks into the above aspects before releasing the loan, still you need to be in the loop. Therefore, once you identify a property for purchase, you have to go for preliminary verification of title deeds of identified property on your own. If you are not conversant with the method of verification of title deeds, you need to take the help of someone who has at least rudimentary knowledge of verification of title deeds. Preliminary verification of title would avoid unnecessary legal expenses if the vendor does not have the title on the face of the available documents.

What are the title deeds of a property?

The title deed means a registered document such as Sale deed, Settlement deed, Release deed, Partition deed, Will etc. An unregistered document cannot be considered as the title deed. A Will cannot be considered as a title deed unless it is proved in a Court of law or a letter of probate is obtained.

Preliminary examination of title deeds :

To start with, before entering into the sale agreement with the vendor, you may find out from the records or question the vendor of the property in the following lines.

i. If the property description is not clear the sale deed may become invalid. Therefore, the extent of area, boundaries, Survey no. Door no. plan etc. should be clearly described in the title deeds. The property should be physically identified with the exact property description in the title deed.

ii. The title deed of the immovable property should confer the title on the proposed seller and not merely because of the tax receipt, discharged mortgage deed etc.in the name of the seller.

iii. If the property is an inherited property and the title deed is in the name of deceased person say in his late father’s name or late mother’s name as the case may be, the legal heirship certificate and or release deed executed by other legal heirs to be verified. If the succession has taken place before one or two generations, the genealogy table (family tree) should be obtained from appropriate revenue authority.

iv. If the property to be purchased is from a share of  undivided joint property that may cause the problem in enforcing the owner’s right. Similarly, if the property is sold by an owner of the limit.

v. The chain of title flown without  the break should be verified from transactions taken from person to persons starting from the original purchaser of the property to the last, by way of registered sale deed, registered partition deed or through legal heir-ship, etc. It is necessary to go back and check title transfer in the last 30 years.

vi. It is very important to verify whether the property is in the physical possession of the seller. If the land was given to a tenant on lease and the tenant is claiming his/her  right over the property, or property is encroached by unauthorized person, it may be difficult to take possession of the property after purchase.

vii. It is equally important to ensure “nil” encumbrance over the property to be purchased for a period of 13years. In some states, EC is issued by Sub-Registrar’s office and in some state, it should be examined through the lawyer.

viii. There may be local laws prohibiting the use of agricultural land for non-agricultural purposes. The property might have been notified for acquisition by the State Government. You will have to verify the proposed immovable property is not falling under such notifications.

ix. If the original title deed or predecessor’s title deed is lost or missing, in such cases of absence of original title deeds, the matter may require further inquiries through a senior advocate for considering the acceptability of the property.

x. If the developer is the seller, sale deed, development agreement, conveyance deed, and power of attorney in his favour should be verified. If the builder is not ready to part with earlier title documents, you should ask the builder for the building agreement and demand for the title certificate issued by the developer’s lawyer.

xi. If the flat to be purchased is in a co-operative society, you have to call for seller’s share certificate and letter from the society confirming that the seller is the owner of the flat and there is no lien/encumbrance against the property and also ‘No due certificate’ towards regular maintenance and other usual collections from the society.

xii. The records maintained by the Central Registry (CERSAI)will be available for search by any lender or any other person desirous of dealing with the property. The availability of such records would prevent fraud involving multiple lending against the security of the same property as well as the fraudulent sale of property without disclosing the security interest over such property.

How to find out the construction is legal and authorized?

It is most important to verify the Intimation of Disapproval (IOD) and the building completion certificate issued by the appropriate authority to the developer. In the case of construction projects, if the builder and developers want to legally construct a building he needs IOD issued by the Municipal Corporation which contains a set of instructions that a developer needs to comply with. If the building is under construction, you need to verify the commencement certificate for the particular floor which you intend to buy.