Comprehensive checklist for verifying legal aspects before purchasing a residential property in India

The Maharashtra Housing and Area Development Authority (MHADA) oversees over 50,000 housing projects in Maharashtra, India, under the Real Estate Regulation and Development Act (RERA) of 2016. This legislation, a significant push for housing transparency in the country, has given legal muscle to India's push for transparency in the real estate sector.

Maharashtra accounts for nearly 35% of all RERA-approved projects in the country, with the state's extensive housing market under the watchful eye of this legislation. However, it's important to remember that legal oversight is not pessimism but the dutiful protection that every homebuyer deserves, as Hema Sukhija, Vice President - Legal at Elan Group, rightly stated.

When buying property, it is essential to procure original ownership papers dating back 30 years or more. The Supreme Court of India has ruled that registration alone does not imply ownership. Properties should have sanctioned building plans, commencement certificates, occupancy certificates, and local NOCs such as fire, environment, and sewage. Lacking these documents can lead to penalties, legal notices, legal impediments, or even demolition orders.

Encumbrance certificates offer a vital filter, flagging mortgages, liens, attachments, or loans. If a project is not RERA registered, buyers should proceed with significantly more caution. Engaging a qualified property lawyer can help navigate these nuances, verify documents on government portals, mortgages, stay orders/injunctions, and launch litigation searches where needed.

RERA listing confirms the builder has legal approvals, a track record, and a public grievance mechanism. Properties tied to lapsed past approvals or developer delays can leave buyers stranded without recourse. Legal due diligence is the foundation of a safe, sustainable investment in home buying in India.

Physical property checks are important to confirm the land, boundary lines, and ensure there are no encroachments. Titles need to be clear, unambiguous, and traceable. If the seller inherited the property, transmission/transfers should be legally documented. Valid title deeds/documents are more important than registration.

The importance of legal due diligence in the real estate sector is underscored by the fact that nearly one-third of all property-related court cases in India involve title disputes or hidden encumbrances. RERA adjudication has helped recover over ₹1,400 crore in cases in one state, safeguarding buyer interests.

Looking ahead, India's real estate sector is projected to have a 9.2% CAGR from 2023 to 2028. With the right legal measures in place, this growth can lead to a more transparent, secure, and prosperous housing market for all.

Comprehensive checklist for verifying legal aspects before purchasing a residential property in India