About to Sell or Buy Property? Here's Your Guide to Legal Must-Haves

By LODHA

Clicking well-lit photographs, uploading them on a website, and hitting submit; is all it takes to put your property up for sale these days. If you're buying a house or apartment, you can do so from the comfort of your own home, by simply scrolling on your phone. While real estate agents and websites have made it easier to buy and sell property, the legal processes involved can make or break a deal. Whether you're a first-time home buyer or simply don't have the time to research all the legalities involved, this checklist will help you complete a property transfer seamlessly. No matter what side of the transaction you fall on, it's imperative you know more about the legal prerequisites and formalities that will help you sell or buy real estate. 

5 Legal Considerations for Buying or Selling Real Estate Property 

Title Deeds

The first step of the house-buying legal process is to check the title of the property. The title of the property determines who the legal owner is and helps you trace the list of previous owners. To understand how the property has been passed through various hands, you need to examine property documents. Doing so will also help you confirm that the individual selling the property is the rightful owner. Only the rightful owner of the property has the right to put it up for sale.

As a potential buyer, you might have to examine documents like the title deed, sale deed, tax-based receipts, and other important documents like encumbrance certificates and so on. If you're thinking of selling your property, make sure to have these documents ready and ensure that the title of your property is clear. Verifying the title helps avoid any disputes and makes the transfer seamless for both parties. 

Sale Agreement

After the title of the property has been verified, the next step is to enter into a sale agreement. A sale agreement is a document that precedes the signing of the sale deed. It must be executed on a non-judicial stamp paper and delineate terms of the sale related to the price, payment details and date of possession. It also outlines other clauses regarding the property's warranties, liabilities and conditions. 

Essentially, a sale agreement splits the buyer's and seller's rights and responsibilities and makes every aspect of the transaction clear. Ideally, it is best to go through a sale agreement carefully before signing, regardless of whether you are a buyer or seller. If needed, you can also engage a lawyer to help you go over it with a fine-toothed comb. 

Payment

As soon as the sale agreement and sale deed have been signed by both parties, an exchange of funds needs to take place. Normally, the buyer is supposed to pay a small token amount to the seller as a gesture of commitment towards the flat or house sale. The amount exchanged is also referred to as the deposit or advance money. Once the buyer has paid the deposit, the sale can proceed. However, if you are a seller, you must make sure to convey how you would most like to receive further payments. You can either agree to receive the balance amount via instalments or a lump sum amount. 

Ideally, the sale agreement should have a clause related to the mode of payment. While the seller has to ensure that the transfer of funds takes place legally, the buyer must take care that all the required documents are in order. 

Registration

Next, you can go ahead with getting the property registered. Once a property is being sold and changing owners, the registration duties also transfer from the seller to the buyer. If you are the buyer, you will have to register the property for sale with the local authorities and provide the required fees and stamp duty. If you're not familiar, stamp duty is the tax that the state government charges on transactions related to property. Similarly, the registration fee is a charge levied by the local municipal authorities to register the property in the new owner's name. To register the property, you will have to submit certain documents such as the sale agreement, title deed, and other relevant documents as asked for by the authorities.

Possession

After completing the registration process and the entire sum has been paid by the buyer, they can take possession of the property. Usually, the possession date is listed in the sale agreement. If you are selling your property, you need to be ready to transfer possession of the property on or before the date listed. If you're buying property, you need to have a clear idea about the possession period before signing any agreement. You should also check that the property is in the same condition as was agreed upon in the agreement. From the possession date onwards, all the utility connections are also transferred to the buyer, and they oversee paying bills for electricity, water, gas, and so on. 

Whether you're looking for a house to buy or are selling your property, this checklist will help you sail through the process easily.