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Friday 19 June 2015

PREVENTIVE STEPS BEFORE PURCHASE OF PRE-OWNED PROPERTY


If you are purchasing an independent pre-owned property or a flat in a housing society, initially ask for the original share certificate. One way of ensuring right ownership for property, is to verify the house agreement.  To double check, you can also peruse the telephone and/or electricity bills, as they are issued only in the name of the lawful owner of property. Alternatively, you can check the housing society’s maintenance bill which contains the owner’s name and property tax details.This document will also highlight any pending charges that are due payable by the owner of the house or flat which you propose to buy. This is crucial because, if the owner sell the flat without paying his entire outstanding dues, the society may recover the same from the new owner. In order to avoid such hassles, better to ask the Housing Society to issue a No-Due Certificate or a No Objection Certificate.

Please note that any pending litigation on the property should also be a warning signal because the purchaser is legally bound by the result of the suit, and in case the Court establishes that the seller was not the rightful owner, you will have to hand over the property to the true owner who obtains a Judgment and Decree to that effect issued by the Court of Law. 

To check for pending litigations on the property, the lis-pendens registry available at Sub Registrar’s Office need to be verified, as it will contain the owner’s name in case any litigation is pending.

Mortgaged properties are the other lemons, you need to watch out for.  In such cases, the original documents of the property are invariably held by the concerned lending Institution.  As such, in case the Seller fails to show you the original documents of the property, there is every reason  for you to be more alert.  In case the Seller claims that he has cleared the entire outstanding dues, then insist for Bank’s full satisfaction letter or original discharge letter.

Before conclusion, it is generally opined that a clear title is not assurance enough and as such one should even consider to contact previous owners, to rule out any fraudulent transaction. As a prudent purchaser, it is better to publish a ‘public notice’ in the newspaper inviting objections if any against your proposed purchase of said property.

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