Purchasing
a piece of property is one of the most important financial decisions you can
make in your life. There is something about buying land that makes you feel
proud and gives you a huge sense of accomplishment.
1. Identify the Property
The first step in purchasing a property is of course,
identifying it. Pick a location that you like, and choose a property that fits
your budget range. Then try to negotiate the price of the property, the mode of
payment and the tenure with the seller.
2. Get a Legal Opinion
Once you have spoken to the seller and finalized the terms, it
is crucial that you meet with a lawyer. They will help you obtain a legal title
report of the property you intend to purchase. Some basic checks need to be
done to clarify various aspects of the property and the proposed sale
transaction.
You can also conduct a research of all the property documents
along with your lawyer to ensure that you have all facts regarding the
property, and it is a reliable purchase. The legal title report is compiled
based on all the general information that has been collected. It usually takes
about 3 to 5 days to prepare and submit a title report.
3. Obtain the Encumbrance
Certificate
An encumbrance certificate is an important document that helps
you verify whether the immovable property you plan to buy is free from claims
such as loans, leases, unpaid debts, etc. The Sub-Registrar’s office
issues the encumbrance certificate after verification of the relevant property
documents, and it certifies all the transactions made on the property for the
time period you specify. It is important that you get the encumbrance
certificate (for a period of at least 30 years) before you enter into an
agreement for the sale.
4. Check the Revenue Records /
Mutation Details
When the title of a property is transferred from one person to
another, it is recorded in the revenue records as mutation of property. The
mutation is recorded in the Municipal records for property tax payment
purposes, and it does not refer to the legal title of the person to whom the
property has been mutated.
You will have to submit an application containing the relevant
information on plain paper, along with a non-judicial stamp of relevant value
to the Tahasildar of the area.
5. Sign the Agreement
An agreement is a written contract between the buyer and the
seller in the presence of a witness. The seller agrees to sell his property,
and you (the buyer) agree to buy it under the recorded terms and conditions.
These conditions are mentioned in the agreement and usually include the
property value, property extension, period of documentation, advance amount
paid, terms regarding property encumbrance, possession, previous document
details, etc. If there are any buildings or furniture present on the property, the
area of the building (in sqft), furniture details (if it is included in the
sale consideration amount), and a brief description of any type of plantations
present on the property are also recorded.
The agreement is prepared on stamp paper and it also includes
what kind of legal penalty is to be enforced if the buyer or seller violate the
terms of their agreement.
6. Register the Agreement
It is advisable to register the sale agreement at the respective
Sub-Registrar’s office. It would then reflect in the Sub-Registrar’s records,
and any subsequent buyer will be able to find the existence of a valid
agreement on the property. However, registering an agreement attracts the
relevant stamp duty and registration fees.
7. Buy Stamp Paper in the
Buyer’s name and Pay Stamp Duty
The Stamp Paper has to be purchased in the name of the buyer
from the State Treasury or Stamp Paper vendor depending on the value of the
stamp. The value of the stamp varies based on the purchase price.
You can get the stamp duty rate from the Registrar’s office or
from the official website of the Kerala Registration Department. The prevailing
rate in Kerala is 6%, irrespective of whether the property is located in a
Panchayat, Municipality or Corporation. This rate will be periodically revised
by the government.
8. Ascertain the Fair Value of
the Land
The stamp duty is calculated based on the actual sale value of
the property. However, it is mandatory that the sale value cannot be lower than
the “fair value” of land which is determined by the government.
The existing fair value of land in Kerala was fixed in 2010,
which will be revised as per the current budget proposals. The government will
introduce necessary amendments to the Government Stamp Act to enable these
changes.
Land in Kerala is categorized into 15 types for the purpose of
fair value calculation:
·
Commercially important Plot
·
Residential Plot with NH.PWD road
access
·
Residential Plot with
Corp.Mun.Panch. road aceess
·
Residential Plot with private road
access
·
Residential Plot without vehicular
access
·
Garden Land
·
Garden Land
·
Coastal belt
·
Water logged land
·
Rocky land
·
Waste land
·
Wet land
·
Hill Tract with road access
·
Hill Tract without road access
·
Government Property
The fair value of land in each district in Kerala can be
accessed using these links:
9. Get the Sale
The Sale Deed document should be drafted by a recommended
professional to ensure that it is defect free and does not cause any future
complications.
10. Register the Land in the
Registrar’s Office
The land has to then be registered in the Sub Registrar’s office
concerned. The registration must be done within the time frame recorded in the
sale agreement. 2% of the cost of the land will be charged as registration
fees, irrespective of the property’s location.
What You Need to Have Before
the Day of Registration
You need to ensure that you have the following in place before
you go for registration.
1.
Original Title Deed
2.
Encumbrance Certificate
3.
Possession Certificate
4.
Previous Deeds
5.
Land and Property Tax Receipts
6.
Two witnesses
7.
Passport size photographs of the
buyer and seller
8.
Identification details of the buyer
and seller
11.Receive the Documents after
Registration
Once the registration is done, the office will provide you a
receipt for the same. You can then collect the documents from the Registration
Office after a few weeks.
12. Get the Property Mutated /
Change the Title of the Property
In order to change the title of the property, you have to submit
an application with copies of relevant documents in the village office. This is
done to change the revenue record of the property from the seller’s name to the
buyer’s name. This process is called ‘Pokkuvaravu’ in Malayalam. It is also
referred to as ‘Thandaper Pidikkuka’ since you get a ‘Thandaper’ against your
name once you mutate a property to your name.
13. Pay the Property Tax and
Get Tax Receipts in Your Own Name
After the property is mutated, pay the applicable tax in your
name in the corresponding village office.
