While entering into an agreement for purchase of a property, it is
advisable that some basic points be kept in mind. This will not only
expedite the registration process, it also saves the buyer from unwarranted
delays and harassment by the seller at a later stage.
Payment terms
The buyer and the seller should explicitly agree on the price to
be paid and payment terms. Payment should invariably include a clause
on payment of last instalment on possession and registration of
the property, and not prior to that. The sale deed or agreement
to sell must be executed by the seller and buyer. This should include
full details and origin to the title to the property, proper identification
to the property, details of neighbouring survey numbers, payments
terms, payments made so far, and cheque and draft references.
It should be ensured that the buyer-seller agreements are equitable
and do not contain clauses that are violative of the rights and
interests of the buyer. Buyers should ensure that all the issues
agreed upon by the seller at the negotiation stages are written
and documented in the agreement. These may include issues like location
of particular house, fittings and fixtures to be provided etc.
Stamp duty
The stamp duty varies from State to State in India. The buyer should
ensure that the stamp duty at the prevailing rates is remitted.
It is levied on the land value and in some cases it is on the total
value of land and building. The levy is on the registered value
of the property. However, in many cases some minimum rates are already
fixed by the authorities.
Transfer of title
On completion of the construction the seller should execute the
transfer of title to the buyer by getting it registered with the
local sub-registrar of properties under whose jurisdiction the property
is located. The buyer's presence is not necessary. He can authorise
his representative to execute the document. The seller must be present
and transfer the title by signing on the transfer deeds and all
appropriate documents.
Sale deed
The sale deed prepared earlier is only an initial contract. Before
registration, the final sale deed is prepared on stamp paper of
appropriate value which will be the prevailing rate of stamp duty
in the respective State. This set of documents should be executed
by the seller. Irrespective of the value shown in the documents,
the sub-registrar will determine the market value of the property
and the stamp duty payable.
In case of purchase of an apartment, proportionate share of the
land on which the apartments are built is also registered. The agreement
should accompany plans, drawings and specifications of each item
of work.
Source: TNN
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