Buying a home is a long-cherished dream for many. But often it ends up being a nightmare due to unscrupulous sellers, lax checking by authorities and questionable property records. In order to protect themselves from financial loss, legal battles and stress, buyers must arm themselves with basic legal and procedural knowledge.
Shyam Sunder, a practising advocate in Chennai who has helped banks such as SBI detect fraud in property documents to the tune of Rs 55 crore, has some suggestions.
There are a few red flags you can spot quickly. If you are buying a flat, check the approved building plan drawings to know the ratio of building area to land area ratio, known as Floor Space Index (FSI). FSI is normally 1.5 in Tamil Nadu. You can calculate the undivided share of land (UDS) and check if the builder is offering you this. When you are buying a 1,000 sq.ft apartment, for instance, your builder may reduce it to, say, 300 sq. ft instead of 666 sq. ft (1,000 divide by 1.5).
Pointing out that that builders may allot higher UDS for apartments they retain or may construct unauthorised apartments in the premises, Sunder advises that you check that the total number of apartments constructed tallies with what is mentioned in the approval permit. Further, he says, ensure that the builder does not have terrace rights on the constructed building.
Say you are buying a plot which is part of a panchayat-approved layout: be aware that only the Local Planning Authority (LPA) and Department of Town and Country Planning (DTCP) have the authority to accord layout sanctions.
You must know which authority has approval powers for your locality regarding project size and use (residential or commercial), and what the rules are. For instance a panchayat can provide approvals for only up to 4,000 sq.ft for residential (G+2 floors with a maximum of four dwellings) and 2,000 sq. ft for commercial (G+1 floor) buildings.
Ensuring that the documents your seller shows are genuine is important and, in many cases, can be done with the help of online sources. Shyam Sunder gives the instance of a seller who provided his father’s death certificate along with legal heir and other house-related documents. A simple check of online records of births and deaths dating all the way back to 1930 for registrations in Chennai revealed that the death certificate was fake.
Many property-related documents such as village pattas and building permits are available online in Tamil Nadu. Detailed land use classification for all areas falling within CMDA limits can be verified on their website. Many identiy proof documents such as PAN card and voter ID can also be verified online. There are also other ways to verify if the document is forged. Sale deed numbers start at number one every January.
So, based on the average number of transactions that happen in a month, you can check for issues.
For example, you should be suspicious of a January dated sale deed with a high number, or one in December with a very low number. Of course, you need to compare the certified copy of a title deed document from the sub-registrar’s office against the original to check if it matches.
BEWARE OF POA
Sales done through Power of Attorney (POA) tend to be rife with issues, says Sunder. In many instances the POA holder sells the property after the death of the owner (Principal) who granted the POA. The legal heirs may claim rights to the property and the law usually declares that the sale invalid.
You must ensure that the POA has not been revoked, that it clearly indicates the holder is authorised to sell the property, and that the Principal is alive.
If the POA is from a builder, ensure that all the partners in the partnership firm have signed.
In Tamil Nadu, POA details of a sale are recorded in the Encumbrance Certificate (EC), if the POA is registered after October 1, 2010.