New to buying a home? Let us illustrate the documentation required for purchasing a home

Fulfilling a long-cherished dream of buying a home is a rite of passage in everyone’s life. You feel you have arrived at last and thank your lucky stars for shining for you.

However, buying a home can be nerve-wracking, vague and intimidating for a first-time homebuyer. They can feel overwhelmed by the deluge of real estate documentation procedures they have to wade through before the property is handed over to them. The legalities and endless paperwork can flummox even the smartest of homebuyers.

It is therefore imperative to school yourself with the entire documentation portfolio so that you don’t feel the nerves when you come across a barrage of home-buying documents.

While it can sound like a task to search for the documents one by one, we have cut the inconvenience for you. Here is a list of documents to help you avoid the pitfalls while buying a property. Enjoy the ride.

  1. Layout Approval: This refers to a government document that a builder has to procure from the concerned authorities before starting the construction of any project. It is important to ask the builder to furnish the layout approval document so that you can rest assured that the project has been given a green signal by the land authority.
  2. Master Plan: A master plan is a graphic representation of the project that contains every minute detail including dimensions, adjacent plots and boundaries. You can also find the entry and exit points of the project, various amenities like open spaces, gardens, sports arenas and the main routes that connect the project. Master plans are of three types: a) thin rectangular plots b) triangular plots c) phase-wise development.
  3. Land Records: Land records serve for authentication of the property in terms of pending loans, the current owner of the property and how many times the land has changed hands. Today land records have become digitized; hence it has become easy to check property frauds, whether the property is under litigation and know market-based pricing.
  4. Land Use Certificate: Land use certificate is an important document that contains information about the type of land a project is coming up on. Residential projects cannot be erected on commercial or agricultural land. The Land Use certificate ensures that. It is also known as CLC (Change of Land Use).
  5. Occupancy Certificate: Also known as Possession Certificate, this document is issued by the local development or municipal authorities. Occupancy Certificate is only passed on to the homeowner after the building has been thoroughly checked and deemed fit for occupation by the buyer. In the absence of an OC, a building can be termed as unauthorized and demolished.
  6. Allotment letter: An allotment letter is an all-encompassing document containing the details of the housing project, payment options, miscellaneous charges, building plans, delivery date and builder’s liability. This document is important for a homebuyer as it helps him to extract home loans from the bank. The document also ensures timely completion and delivery of a project.
  7. No Objection Certificate: A No Objection Certificate (NOC) proves the complete ownership of the property. A NOC certificate declares that there are no pending payments against the property. NOC involved in property transactions are of three types: a) NOC from real estate developer-Document handed over by builder to homebuyer for taking ownership of a property. b) NOC from State Real Estate Authority-According to sec 15 of RERA, if a developer wishes to hand over a project to another developer, then a NOC is required from two-thirds of the allottees of the project. c) NOC from collector– If a property owner wants to transfer his property to someone else, he needs a NOC from the collector. d) NOC for NRI property transaction– If you are an NRI and want to transfer your property to someone else in India or vice versa, then a NOC as directed by RBI and FEMA needs to be obtained. e) NOC from banks or financial institutions-It is issued by the bank after the whole loan amount has been repaid by the homebuyer.
  8. Certificate of Commencement: A certificate of commencement must be obtained by a builder before embarking on the construction of a project. It is approved by the local municipal authority or land development authority after all legal requirements and sanctions are met.
  9. Completion Certificate: A document issued by the municipal corporation or local development authority to a real estate project upon completion after a thorough inspection of the project. The completion certificate is required to ensure the supply of utilities like water, electricity and drainage systems.
  10. Builder-Buyer Agreement: Coming into force under the RERA enactment, the builder-buyer agreement is a legal document consisting of all terms and conditions regarding the sale of property from a builder to a buyer. In case of any breach of the agreement either by buyer or builder, they can furnish the document to register a complaint.
  11. Sale deed Registration: A sale deed registration is a legal document obtained from the registrar’s office which declares the rightful ownership of the property after its completion. A homebuyer must collect this document if he wants to proceed with registration and mutation of the property.
  12. Title Deed: A title deed shows the rightful owner of a property. It includes the rights, loan details, legal obligations and mortgage obligations of the property owner. It is important for the homebuyer to obtain this upon registration of the property.
  13. Encumbrance Certificate: An encumbrance certificate is a certificate of assurance that a property isn’t mired in any legal tangles or financial hassles including mortgage or pending loan. Homebuyers must obtain this certificate as evidence of ownership of their property. This document is also important for those obtaining a loan against property.
  14. Change in Share Certificate: Change in share certificate is a document that is to be submitted by the home buyer duly signed by both buyer and seller after obtaining the sale deed. After submission, the housing society will hand over a new certificate declaring you as the owner.
  15. Mutation of Property: Mutation of property is a document that shows the change in title ownership of a property from one property to another when it is sold or transferred. The name of the current owner gets recorded in the land revenue department records and the government charges tax from the rightful owner.

So, there you go! A complete explanation of the documents you can bump into during a property purchase deal. We hope after a good brush up of the terms above, you can embark on a property expedition with renewed confidence. And when you have the most respected brokerage, Square Yards by your side, home-buying will become a delightful, memorable journey for you. Now enjoy home buying from your couch from our digital real estate platform with virtual home tours, digital transaction tools, digitally secured paperwork, and exclusive handholding from our real estate executives. Happy Home Shopping for you!

Sumit Mondal Content Analyst at Square Yards
Sumit Mondal Content Analyst at Square Yards