November 2001 :: Page No.

04

Initial Steps towards Property Purchase

Verification of the Title.
Scrutiny of title deeds of the property is the first and foremost exercise the
purchaser's advocate has to undertake before entering into an agreement with the
seller. A clean and marketable title, free from all doubts and encumbrances vested
with physical possession, is very important. The ownership of the titleholder can be
traced from the title deeds and revenue records.
It is the duty and responsibility of the purchaser's advocate to safeguard the
interest of his client. The advocate shall thoroughly search and scrutinize the
marketable title of the property and genuineness of the documents. He shall make it
very clear to his client the extent of risk involved in the transaction and how to make
payments to the seller.
Origin of the Property
The origin of a property is very important to trace the title of the property. It is
otherwise called 'Root of the Title'. It is the safest way to determine the origin of the
property and trace it's marketable title. Documents covering a minimum period of 42
years must be scrutinized. In the case of Adverse Possession against individuals or
Conflicting Claims (other than mortgage) against individuals, documents covering a
minimum period of 12 years must be checked. As regards the period of limitation
against the Government, documents covering a minimum period of 30 years must be
checked. If a person is enjoying the property for more than 30 years, he will get title
by adverse interest against the Government as per the Limitation Act (article 112 of
the schedule as per section 21J) and 3 of the Limitation Act. Also, as per the Section
90 of the Indian Evidence Act 1872, a document executed 30 years before is
presumed to be valid.
Subsequent Transfers
After ascertaining the origin of the property, it should be followed up by methodical
examination of events and further transaction, if any, in an uninterrupted and
sequential manner, involving the previous owners and the present owner of the
property. Here, the purchaser's advocate has to very carefully look into all aspects
from various legal angles as to how the property was transferred from the previous
owners to the present owner. Such a transfer may be by possession, inheritance,
settlement, will, sale, mortgage, release, gift etc., involving such intermediate parties.
For supporting such a transaction, the advocate has to carefully examine the title
deeds and other supporting documents like revenue documents and other records.
Also, verification of the identities of the names of the parties and their family
connection, wherever they are relevant, and proceedings, if any, involving the
parties before any court of law, other legal forums and authorities including revenue
authorities, must be done.

Statutory Clearance
The nature of various statutory clearances obtained from the relevant authorities like
revenue, land reforms, income tax, etc., required for completing the transaction must
be informed to the parties. In case of purchase of agricultural land, various
clearances must be obtained before executing the deed of conveyance.
Present Status
The 'present status' of the property is the most important point to be examined. The
advocate has to find out who is the present owner, how he got the property, what
title deeds and supporting documents he is holding, is it ancestral property or self
acquired property and who are his legal heirs. If the legal heirs are majors in age, the
vendor must ensure their presence while executing the deed of conveyance. If they
are minors in age, the vendor has to get the permission from the court before
executing the deed of conveyance. In some cases the vendor may conceal the fact of
legal heirs. To find out the truth, the advocate must ask the vendor to produce either
the succession certificate or the family genealogical tree issued by the revenue
authority. If necessary he must see the family ration card for further clarification.
The advocate must find out in whose name the khata stands, whether the khatedar
possesses up-to-date tax paid receipt in his name and up-to-date encumbrance
certificate, to establish his right, title and interest in the property. The advocate has
to check Encumbrance Certificate for a relevant period, generally above 12 years up
to 42 years from which it would be known what kind of charge has been created on
the property and whether such an encumbrance is existing or not. Municipal and
other revenue authorities too maintain records as to who is in possession of the
property, what is the amount of tax payable on the property and up to what period
tax has been paid. All this can be learnt from these records. 'Present status' is one of
the important factors to establish the present ownership of the property.
Genuineness of documents
After thoroughly scrutinizing the documents, the purchaser or his advocate has to
check up all documents for legality with the concerned departments just to ensure
that the documents are genuine, that they originated from the departments and that
they are not fakes. In addition, the advocate has to find out from the department
whether there is any attestation, notification or proceedings against the present
owner. In case of buildings it must be ensured that it has not been served with a
demolition notice.
Identity of the property
The identity of the property must be checked on the spot. Measurements mentioned
in the documents must tally with actual physical measurement of the land available
on the property. It must also be ensured that there is no encroachment on the
property. In case of encroachment, the measurement of the available land must be
recorded and this must be mentioned in the deed of conveyance. The boundaries
mentioned in the schedule surrounding the property must be checked physically.

Also, the purchaser may make enquiries tactfully with the adjacent property owners
about the ownership of the property he is proposing to buy.
Paper Notification
Though the paper notification is optional, it is always advisable to notify in a leading
local newspaper about the buyer's intention to purchase the property. This is done
to safeguard the interest of the purchaser. Even after examining the various
documents, the Advocate may not be able to find out whether the property is truly
free from any claim or not. A paper notification will beget response from a genuine
claimant. Therefore, paper notification is the best way to avoid legal problems for
the purchaser at a later date.
Physical Possession
In case of vacant site, the purchaser may, with the permission of the vendor fence the
property with barbed wire or he may construct a compound and put a signboard, if
necessary, to intimate the ownership of the property. Verification of title is very
important. It is not merely tracing the title on the record but also examination of the
genuineness of the records, identification of the property, notification in a
newspaper and physical possession of the title of the property. Even after entering
into an 'Agreement to Sell', the purchaser still makes queries about the Title on the
Scheduled Price to the vendor. A doubtful title cannot be forced upon the purchaser.
Purchaser is not bound to complete the sale if there are defects in the title, material
or latent, which are not discernible in ordinary course. A mere suspicion of fraud
that cannot be made out will not make the title doubtful and the purchaser cannot
reject the title.

Purchase of BDA Property

While buying a BDA site from the
allottee, the purchaser shall collect the
following original documents from the
seller at the time of execution of the
Sale Deed.
1. Allotment Letter.
2. Sale consideration paid receipts.
3. Possession certificates.
4. Agreement to sell executed by the
BDA and the original allottee.
5. Katha Certificate.
6. All up-to-date tax paid receipts.
7. Encumbrance from the date of
allotment.
8. Absolute Sale Deed executed by the
BDA.
9,Other papers mentioned in the above
said Documents.

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