Marketable Titles in Real Estate

The Indian legal system registers and records ownership and transfer of land through a varied mechanism requiring multiple documents and records to be created and maintained by different departments and stored in different formats. In a bid to create a more efficient and effective method of recording and storing land records, the government of India introduced the Digital India Land Record Modernization Program (DILRMP) in 2008. This has, to some extent, made it easier to verify documents presented as proof of ownership at the time of a sale. However, due to the complex nature of the prevalent system, it is imperative as a home buyer to ascertain the accurate title of the land on which the property you wish to purchase has been built. A marketable title is one which is free of encumbrances, has proper records of ownership and has not tax liabilities. A three-step perspective can be adopted when trying to establish the merit of a title:

Documentation

 In India, the Survey Department is responsible for measuring land, setting boundaries and maintaining land records. As per the Transfer of Properties Act 1882 and the Indian Registration Act 1908 transfer of any immoveable property exceeding the value of Rs.100/- must be registered with the government. All changes to the title and ownership must be recorded and registered as well. Therefore, the first step towards understanding the legal title of land is to procure the legal title report for the same. For all RERA registered projects, this can be found on the RERA website by entering the project’s RERA registration number. For projects that are not RERA registered, a buyer must look for the Property Card or Index II. A Property Card is an extract obtained from the urban land records register. It is a government certified document that proves ownership. It contains details of the history of ownership of the land, land description, taxes paid and unpaid, mutation records, encumbrances, etc. This card can be obtained from the city survey officer or downloaded from the official government website. A property Index II is an autogenerated document that is created at the time of registration of a transfer. It contains a short description of the registered documents and details of the immoveable property. It summarizes and legitimizes the transfer but does not prove validity of the contents of the registered documents. It is issued and maintained by the sub registrar’s office and stamp duty department and is usually found attached to the registered documents.

Government Sanctions

In order to begin construction, a builder must procure certain NOCs and certifications from the government. These are issued only when the project plans are in tandem with the local laws and do not violate any zoning norms. A Commencement Certificate (CC) is issued for a project once all necessary NOCs are procured and the civic plans have been approved. RERA protects buyers by issuing a registration number only to those projects that have received a CC. Once a building is complete a builder must procure and Occupation Certificate (OC) from the local authorities to make it legal for owners to move in and occupy their flat. An OC is needed to get water lines, electrical lines and other essential services in a project. Without an OC it is illegal for an owner to occupy their flat. Therefore, it is imperative as a home buyer to ensure that the building in which you wish to purchase a flat has received its OC. For RERA registered projects you can find an uploaded copy of the CC and OC on the RERA website by entering the project’s RERA registration number.

Physical Possession

Physical possession refers to who inhabits the property in question. A flat that is available in the market for sale may have tenants living in it or other claimants. Especially in the case of a plot of land, it is extremely important to determine if there are any encroachments, squatters or claimants by adverse possession. A property that is inherited under the HUF Law may require a NOC from all heirs before it can be transferred. In cooperative housing societies, upon the death of an owner, the shares of his flat are not immediately transferred to the registered nominee. The nominee is simply a custodian and does not have the legal right to claim ownership solely on the basis of his or her nomination. Therefore, it is important to ascertain the authenticity of an individual’s claim of ownership of a property and identify if there are any challenges to their claim, before getting into any sale agreement.

It is not always easy to be able to identify, procure, study and infer the accurate status of a project from the documents that are made available to the general public. Although the government has taken several measures to make the entire process more transparent it is difficult for a common man to make sense of all of it. Many documents are published in local languages and in legal jargon that can confuse even the most informed buyer. Moreover, due to the nature of our current system no one single document can prove complete ownership. Whether you choose to buy a plot of land, an independent house or a flat it is vital that you seek the right assistance and advice to decipher the documents available and ascertain the true nature of the ownership history and present title of the plot, house or flat you wish to purchase.

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