Kerala has a burgeoning real estate market. The infrastructure growth, rapid urbanization, and growing urban economic centers have given a fillip to the development of the real estate sector in the state. The number of transactions is increasing every year. With property values soaring and home buyers and investors investing in real estate like never before, the legalities involved in the transactions become crucial. The involved parties, the buyer and seller need to be aware of all the legal aspects involved in the property buying process. In this blog, we will understand the legal aspects involved in buying property in Kerala.
1. Title Verification
The first step is to check if the property is in the seller’s name. Two documents that ensure that the title of the property is clear and that there is no ambiguity are:
A. Title Deed (Sale deed/Settlement Deed/ Gift Deed/ Will): The seller should have a clear and marketable title deed as this establishes the ownership of the property in their name.
B. Possession Certificate
Confirms legal ownership of a property.
C.Property Tax Receipt/ Land Tax Receipt
These receipts should be in the name of the property owner which ensures the mutation and the property ownership.
D. Encumbrance Certificate: The encumbrance certificate proves there are no pending legal or financial liabilities with the said property. The encumbrance certificate for the last 15 to 30 years should be clear of any liabilities.
2. Property Documents
Important documents that the builder must possess are:
A. Prior documents
The sales deed is the primary legal document that confirms that the said property was transferred from the earliest seller to the current seller. The document’s authenticity should be validated.
3. Approvals
A. Plan Approvals
The local municipality or Panchayat should have approved the structure plans of the property or the project.
B. Zone Clearance
Builders in Kerala should have zoning clearance from all regulations, like agricultural, forest, residential, commercial, and coastal regulation authorities for their projects for sale.
C. Environment Clearance
Large-scale developments and residential projects should have mandatory environmental clearance.
D. Occupancy Certificate (OC)
Occupancy certificate is issued when a property is ready to be occupied. This is a very important document, and the prospective buyers of an upcoming apartment should necessarily ask for this. OC certifies that the construction of the property is done according to the approved plan and in adherence with existing building norms and regulations.
4. Registration process
A. Stamp Duty and Registration Charges
In Kerala, the stamp duty is 8% of the property value and the registration charges are 2%. These charges need to be paid during the property registration process when the transfer of the title goes from the seller to the buyer. The property registration takes place at the local sub-registrar office, where the legal procedure of the ownership transfer takes place.
A home buyer should consult a legal expert who specializes in real estate especially when they are buying property for the first time. The legal expert can verify the authenticity of all the documents, cross-check if the fine print in the agreements meets the rules and regulations, and guide the home buyer in the complete buying process. This way the home buyer can complete the process without any doubts and ambiguities.
