Precautions while buying a land

by Admin on March 13, 2011 · 0 comments · Property


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For 32-year-old Sumana Chatterjee and her husband Sumitro Mukherjee, 33, it was a fruitful end to house hunting when they bought a plot of land in Vadodara, Gujarat.

However, a few months after paying the full amount, the couple was shocked when they received a stop work notice from the court on the construction of their bungalow. "We found that there was another claimant for the land and that the property was under litigation," says Chatterjee.

The couple had no reason to be suspicious as many of their friends had invested in the same project. "We had a tough time getting our money back. As we had taken a personal loan, we lost nearly `1.5 lakh in interest payments," says Mukherjee.

The duo could have avoided the botheration if they had verified all the documents before buying the plot. Unfortunately, most buyers are unaware of the paperwork involved and the facts that need to be corroborated; the sellers exploit this ignorance to con them.

One needs to go through several records to verify the legality and authenticity of the land and ownership (see box), or check if it is agricultural.

"If it is, a non-farmer may not be able to buy it unless he has permission from the right” alt=”property investment” height=”820″ src=”http://www.investmentkit.com/articles/wp-content/uploads/land.jpg” width=”273″ />district collector," says Nilesh Patel, managing director of Patel Trading Company, a Mumbai-based property trading firm with realty projects in Maharashtra.

Buyer's checks: The first thing a buyer should crosscheck is the title deed and the ownership of land for the past 30 years.

If the owner can't be present when the deal is being conducted, he can authorise someone to sell the land on his behalf through a power of attorney (PoA).

However, most frauds related to land transactions involve PoAs, so it is advisable to check with a lawyer before signing on the dotted line. In the case of NRIs, the PoA should be signed by an officer of the Indian embassy in the presence of a witness.

Even if your documentation is in order, there can be other problems, such as encroachment.

"If you are not vigilant, there is a chance that the property will be encroached upon by anti-social elements," says Partha Gupta, director of Gujarat-based Ideal Interactive & Folio Services Pvt Ltd, which trades in realty plots in Maharashtra as well as Gujarat.

This problem can be avoided if buyers resort to some safeguards. Manoj Asrani, marketing head, Soham World Property Developers, says, "The buyer should hire a solicitor who can enlist the property and ensure that the neighbours are aware of the purchase.

He must also put up a fence and a notice board stating that the property belongs to him."

Finance can be another roadblock a buyer comes up against as most banks and housing finance companies do not provide loans for purchase of plots.

You will have to opt either for a personal loan or take one for constructing a home, that is, for buying the land and building a house on it.

Source: Economic Times

 





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Admin March 13, 2011

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