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Dual identity of property and its verification

Saturday, June 23, 2018

Real estate or any kind of property has dual identity, one is physical, and another is legal. Unless these two physical and legal identities go hand in hand, its not safe to proceed with the transaction, warns Advocate Tanmay Ketkar

A property may continuously undergo change in its physical and legal identity. Therefore, for customer, its utmost important to verify the property and both its identities. Seeing is believing, therefore physical status or identity of a property must be assessed by visiting it. Once we get an idea of its physical status, we must then proceed to correlate it with its legal identity.

Many times, particularly with constructed premise, it so happens that a property in records is different from its actual physical status. Reason being the changes made in the property, e.g. enclosing or covering of open spaces, shifting of walls, etc. Legally speaking every such change requires a prior permission of a competent property. Unless and until there is a permission, all such changes would amount to unauthorised changes or construction and the holder or owner may face a legal action or penalty.

Beware of unauthorised construction
To avoid problems, a physical status of property must be compared with its sanctioned or amended plan. Anything outside such plans is unauthorised construction and would result in penalty. If the physical status of property is exactly same as shown in sanctioned plan the transaction can be proceeded with. However, if there is difference, buyer must be aware of possibility of unauthorised construction and possible penalty. In such cases, transaction shall not be proceeded unless the possibilities of unauthorised construction and penalty is assessed.

Apart from sanctioned plan, the property has other identities as well, eg. Share certificate, electricity and water connection, 7/12 extract, tax assessment record of local bodies etc. All these identities are to be considered while the transfer of property.

Many times, in property with multiple transaction, if all the sellers and purchasers, have not exercised due diligence, there is difference in various records of the property, eg. Share certificate may bear one name, electricity connection may bear another name and so on. In such cases it is difficult for new buyer to have all such records transferred in his own name. For a purchaser it is necessary to get the property transferred in his name physically as well as transfer of all records in his name. To assure this, before proceeding with the transaction, the customer must study all the records of a property.

Check documents thoroughly
If all records reflect name of the vendor, no problem. However, if the records reflect names of different people, it must be corrected, before proceeding with transaction. If there is any legal defect, e.g. mistake in details of property, names of purchaser and seller etc, in earlier transaction, it is carried forward unless and until it is corrected and continue to make all future agreements defective. To avoid this, its better to check all earlier chain agreements, as it would reveal any possible legal defect in any of the transactions, which in turn would protect the customer.

In nutshell, before proceeding with purchasing any property, its imperative to check its physical and legal identity. Moreover, checking all the records of property and earlier chain agreement would prevent the purchaser from possible loss. With RERA in place, it is now easier to verify most of the details online.

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