Purchasing a piece of land for your dream home is an exciting milestone, however, it can also be a daunting process for first-time buyers. Being well-prepared for your initial conversation with the seller is very critical in ensuring you make an informed land-purchase decision. From understanding zoning laws to assessing utility access, knowing what questions to ask or what information to review can save you time, money, and potential headaches down the line.
If you are a first-time land buyer, you have landed in the right place, and even if this is not your first time, it doesn’t hurt to be well prepared. We will walk you through the essential questions and information you need to gather before committing to your land purchase, thereby empowering you to approach the buying process with confidence and clarity.
- 7/12 Extract (or record of rights)
- PR Card (or property card)
- Property Tax Bill
- Power of Attorney
- Title Report
- Encumbrance Certificate (or EC)
- Government/ Regulatory Authority (or ULB)
- Applicable Byelaws
- Development Plan (or DP)
- Utilities
10 Documents You Must Review
Let’s get started. It’s important to have a clear understanding of the key documents and information you should seek from the seller and review. These will provide you with a comprehensive overview of the property’s legal status, potential issues, and future prospects. By being thorough in your initial inquiry, you’ll be better equipped to make a sound investment. Here are the crucial details and documents you need to request from the seller.
1. 7/12 Extract (or record of rights)
7/12 extract is a crucial document that provides detailed information about a specific piece of land in the rural and semi-urban areas. It includes essential details such as survey number, area, owner’s name, and land usage specifics listed in Forms 7 and 12. This document is managed by the revenue department and is vital for verifying the legal status of a plot, identifying past disputes or legal issues, and recording historical land activities. The latest copy of 7/12 extract shall be obtained from the seller to ensure transparency and legality about the land parcel before proceeding with purchase.
2. PR Card (or property card)
The Property card is a government-issued electronic document aimed at enhancing transparency and reducing forgery in land transactions, in the urban areas. It stores comprehensive details such as past ownerships, survey number, village name, and legal status of a property. It plays a crucial role in verifying the land ownership and assessing the history of all the transactions on the said land parcel, thereby promoting confidence and security in property investments.
3. Property Tax Bill
It will help you ensure that the property tax payments are up to date and will reveal if there is any outstanding tax liability on the property.
4. Power of Attorney
In case you are dealing with NRI seller, Power of Attorney (POA) becomes a critical document. It is a legal instrument that authorizes an individual (the attorney-in-fact) to act on behalf of another person (the principal) in legal and property matters. It grants the attorney-in-fact specific powers to manage the principal’s affairs, make decisions, and sign documents related to the property.
5. Title Report
A pre-prepared title report (if available) can provide clarity on the land’s ownership history and any legal issues not captured under 7/12 extract or PR card. Typically, sellers might not have title report in case of small size land dealings.
6. Encumbrance Certificate (or EC)
It is a vital document that verifies whether a property is free from any financial or legal liabilities such as mortgages, liens, or pending legal disputes. It is obtained from the Sub-Registrar’s Office and is crucial for ensuring the property’s clear title before purchase. The EC helps potential buyers and lenders ascertain the property’s ownership history and any existing encumbrances that may affect its transfer or use.
7. Government/ Regulator Authority (or ULB)
It is important to know the Urban Local Body (ULB) that regulates the development projects for your land parcel as it may affect the development regulations applicable on the land parcel under consideration.
8. Applicable Byelaws
Ensure that you understand any local regulations or building codes that apply to the property. These would determine the maximum construction you can do on the land parcel for both redevelopment/ new construction.
9. Development Plan (or DP)
A development plan sets out a local authority’s policies and proposals for land use in their area. It is crucial to review the development plan for following 2 important reasons – 1) determine permissible land uses, any planned infrastructure changes like road widening or DP/ TP (town planning) or other zoning remarks for your land parcel, and 2) check for any planned changes on adjacent land parcels that might directly impact your land parcel in future.
10. Utilities
Confirm the availability and connection of essential utilities such as water, electricity, and sewage.
Purchasing a piece of land is a significant investment that requires thorough preparation and due diligence. By familiarizing yourself with essential documents such as the 7/12 Extract, Property Card, Encumbrance Certificate, and others mentioned here, you can navigate the complexities of land transactions with confidence. These documents not only ensure legal clarity but also protect you from potential disputes and financial liabilities.
Whether you’re a first-time buyer or seasoned investor, being well-informed about these aspects will empower you to make informed decisions and secure your dream property without unforeseen challenges. Don’t forget to check out Archonet’s land potential estimator to understand the development potential on your land parcel. Happy land hunting!
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