If you are going to buy a home for the first time, there are several things that should be on your checklist, the most important of which is the paperwork. Property buying involves a lot of formalities before you can finally get the keys to your dream home. Banks also need to see a whole bunch of documents before they can grant you a home loan. From Sale Deed to the Occupancy Certificate, here are 7 most important property documents that first-time homebuyers must know about.
Sales Deed
Also known as the title deed, this document is the proof of sale and the transfer of the property’s ownership from one person to another. Even if you are purchasing a resale property, a sale deed is quite important as it determines that the buyer is now the legal owner of the property. The sale deed must be registered in the sub-registrar’s office belonging to the area where the property is situated.
- Khata Certificate
Khata Certificate or Extracts is a vital document at the time of property registration and transfer of a property. Different states have different names for a Khata Certificate. This is a proof of the enrollment of the said property in the local municipal records and that it has been constructed as per a plan that was approved by the authorities. This is why banks and NBFCs ask for this document at the time of processing a home loan.
- NOC (No-objection Certificate)
Before your dream home starts taking shape, there are several NOCs that the developer is required to acquire from different authorities. It varies from one state to another. The developer is also required to share copies of all the NOCs with the homebuyers. You should keep these documents safely as they may be needed any time.
- Allotment Letter
For taking a home loan, the allotment letter is a must. Issued by either the developer or the regional housing authority, this document contains the details of the amount paid by the buyer to the seller/developer. An important point to note here is that the allotment letter is issued only to the first owner of the property. When it is resold, the new owner has to ask for a copy of the allotment letter from the seller.
- Sale Agreement
It is very easy to confuse the sale agreement with the allotment letter, as mentioned above. However, these two are completely different. The allotment letter is issued on the letterhead of the housing authority whereas a sale agreement is issued on a stamp paper. The Sale Agreement includes the details about the property- property plan, specifications, facilities, date of possession, etc. Original sale agreement is required at the time of procuring a home loan for property purchase.
- Encumbrance Certificate
Another important property document is the encumbrance certificate. It is proof of the fact that the said property does not have any pending legal dues. When you apply for a home loan, the bank will definitely ask for this document as it also contains the details of transactions that may have happened in relation to the property. If there are no encumbrances, a Form 16 will be issued. Otherwise a Form 15 will be issued along with the details of all pending dues and legalities.
- Completion and Occupancy Certificate
Again an important document when applying for a home loan, a completion certificate is proof that the property is constructed according to a plan that is approved by the proper authorities. Occupancy certificate, on the other hand, is issued by the local authorities to the developer and states that the building is ready to be occupied and possessions can be rolled out.
In addition to these 7 most important documents, there is some more paperwork involved with property buying. Being informed about these will help you secure a home loan and avoid falling in the trap of any illegalities.
