Things to watch out for before buying property in Kerala.

Are you considering buying property in Kerala? Here are a few tips that could help you. First, it would be a good idea to hire a competent Advocate to check all the original documents of the property you plan to buy.

The reason is, if the title is not clear, lots of complications could arise in future. First of all, no bank will be willing to offer loan against the property if the title deed is not clear. Again, you may face problems when you wish to sell the property.

Here are a few things that you should check and verify before buying a property -

  • Documents relevant to the Land / Project / Building / Apartment
  • Documents relating to the Premises
  • Stamp Duty and Registration

Here are a few things you should check for -

Land Documents

Conveyance Deed or Sale Deed
This is a deed document. By this, the title of property is 'conveyed' by the seller to the purchaser. Conveyance is the act of transferring ownership of the property from a seller to the buyer. This document will help you ascertain whether the flat in an apartment complex which you are buying, is on land belonging to the society/ builder/development authority in which the property is located.

7/12 Extract
This document issued by the concerned land authorities contains details like survey numbers, area, date - from which current owner is registered as owner.

Index II
This document issued by the Sub Registrar's office mentions the names of the sellers & purchasers of the property, for which the document is registered.

Title Certificate
An advocate issues the Title Certificate after conducting a search on the title of the property intended for purchase.

The title certificate would state if the property is unencumbered and has a clear marketable title.

Usually, a search on the title of the property is taken for a period of the last 30 years. It is mandatory for the developer to annex a copy of these reports in the "Agreement for Sale" with the intended purchaser of the apartment.

These documents would state whether the title to the property is clear, marketable and free from encumbrance. It would state clearly whether or not there is any existing mortgage, litigation, condition or claim, which is likely to affect the title of the buyer adversely.


Non-Agricultural Land Permission
If the land you are planning to buy is a paddy field or agricultural land and if you plant to use it for residential/commercial/industrial purpose, the agricultural land has to be converted to non-agricultural land and an Non Agriculture Order has to be obtained from the Collector of the District where the property is located.

Along with this, one needs to take the latest receipts evidencing the payment of Non Agriculture Tax. In cases where the conversion from agricultural use to non-agriculture use is not done within the stipulated period then, there should be an order from the concerned authority extending the period.


37(I) Clearance [No objection certificate under section 269 (3) of the Income Tax Act, 1961]
If any immovable property in cities specified by the Appropriate Authority is transacted above a certain value, it needs to obtain a No Objection Certificate from the Appropriate Authority as defined under the Income Tax Act. A transaction would be incomplete and invalid if this clearance is not obtained.

A statement in Form no. 37(I) needs to be jointly submitted by the seller and purchaser.

The appropriate authority would issue a No Objection Certificate, if it feels that the property has not been undervalued. If the appropriate authority feels that the property is undervalued, then it would do pre-emptive purchase of this property and sell it subsequently through an auction/tender.

Various transaction limits have been set for various cities.


Things to check when you buy an Apartment / Flat !

Development Agreement
The Development Agreement is an agreement entered into by the builder with the landowner if the builder does not already own the land or has a contract with the landowner. It contains details regarding the terms and conditions on which the landowner has permitted development on his property. By this agreement, the landowner engages the developer to develop and build on their plot of land. This agreement generally may also have a Power of Attorney in favor of the developer.

Approved Building Plan
The building plan has to be approved by the Corporation or the concerned authority. The approved building plans should be checked.

Commencement Certificate
The certificate, issued by the Municipal Corporation permits the developer to begin construction once the plans have been approved.

Completion Certificate
This is a Certificate given by the concerned authorities to the developer once the building project work is complete and fit for occupation.