Buying a Flat in India: 8 Legal Checks Before You Pay

For most families, a flat is the largest purchase of a lifetime. Most problems that surface years later, such as a disputed title, an unapproved floor or a missing completion certificate, could have been spotted before the first payment. Here are eight checks worth completing first.

1. Trace the title of the land

Ask the developer for the chain of title deeds for the land, along with any development agreement and power of attorney between the landowner and the developer. A common practice is to trace the title back about 30 years. Each transfer in the chain should be a registered document, and the names and plot details should match throughout.

2. Check the land records

Confirm that the land is recorded in the owner's name in the state's record of rights (known by different names across India, such as khatian, 7/12 extract, jamabandi or patta), with the correct survey or plot number and land classification. Most states require permission to convert agricultural land to non-agricultural use before residential construction; in West Bengal, for example, this is under Section 4C of the West Bengal Land Reforms Act, 1955.¹

3. Look for encumbrances

A search of the registration records shows whether the property has been mortgaged, sold or otherwise dealt with earlier. Also ask whether any bank has financed the project, and whether a no-objection letter from that bank will be given for your flat.

4. Verify RERA registration

Real estate projects across India are regulated under the Real Estate (Regulation and Development) Act, 2016 (RERA), through a Real Estate Regulatory Authority in each state or union territory. Section 3 of the Act requires most projects to be registered before they are advertised or sold; small projects are exempt.² The Supreme Court has also held that a state cannot run its own parallel law in place of RERA.³ Check the project on your state's RERA website and compare the approved plan and completion date with what you are told.

5. Match the sanctioned plan with your flat

Ask for the building plan sanctioned by the municipality or development authority, and make sure your floor and flat appear in it. Floors added beyond the sanctioned plan are a common source of trouble.

6. Ask about the completion certificate

Under Section 11(4)(b) of the RERA Act, the promoter is responsible for obtaining the completion certificate or occupancy certificate and making it available to buyers.² For a ready flat, ask to see it. Without it, mutation, home loans and resale can become difficult.

7. Read the agreement for sale carefully

Check the carpet area, payment schedule, possession date, the consequences of delay, the specifications, parking and common areas, and what happens if either side cancels. Under Section 13(1) of the RERA Act, a promoter cannot accept more than 10% of the cost as an advance or application fee without first entering into a written agreement for sale and registering it.²

8. Register the sale deed and complete mutation

Ownership of immovable property worth one hundred rupees or more passes only through a registered instrument, with the proper stamp duty paid.⁴ After registration, apply for mutation in your name with the municipality or, for land, with the revenue or land records office, so that taxes and records reflect the new owner.

A short legal review before you pay is usually far cheaper than resolving a defect after you have moved in.