In Part 2 of this series, we looked at the kind of documents you need to scrutinise while buying any property in Bengaluru. In addition to these documents, you need to verify some specific documents while buying different types of property such as apartments, BDA sites, land with agricultural past, etc. In this article, we look at these requirements.
Documents for scrutiny before buying apartments
i. Joint development agreement & GPA
In recent times, the most popular method for building apartments is by way of a Joint Development agreement (JDA). This is an agreement signed between the landowner and the developer, where the landowner gives the land to the developer to build and sell apartments, and in return he gets a fixed set of apartments to sell. The landowner issues a GPA (General Power of Attorney) to the developer.
ii. Sharing Agreement
The Sharing Agreement shows the landowner’s share and developer’s share in a JDA. This will help you, the buyer, clarify whether the apartment/property you intend to buy belongs to the share of the landowner or developer.
iii. Inspection of original documents
The builder usually has all the original documents in his possession. But if he has pledged the property to a bank as collateral, he may not have the originals. If so, the builder has to provide a No Objection Certificate (NOC) from the bank prior to the registration of the property, stating that the money goes towards paying off the loan and that the property being sold is free of mortgage.
When buying the landowner’s share of the property, this scrutiny is not as crucial since the landowner’s share is typically free of mortgage in most JDAs.
Documents for properties with an agricultural past
i. Pahani or RTC
Pahani is a revenue record of tenancy and cultivation (RTC) that describes the rights, tenancy and crop details for the property, such as owners’ details, area of the land, land revenue details, water rate, soil type, nature of possession of the land, liabilities, crops grown, etc. Ideally, the seller should have the RTCs from 1969 to date, and all the mutations should be mentioned in the RTCs.
ii. Record of rights and index of lands
This document contains details such as the extent of the property, names of the owners, etc. Although this document has been discontinued by the Revenue Department, it is useful in the tracing of titles. Also, there are reports that it is still unofficially issued.
iii. Mutation extract
Mutation Extract is akin to an ‘agricultural khata’ and is issued by the village’s official accountant or Tehsildar. It contains an extract from the mutation register with relevant details, such as those regarding the previous owner, present owner, the mode of acquisition of the property (by way of sale or inheritance), and the total extent of the property.
iv. Tippani and Podi extract
Tippani is a hand-drawn sketch from the records of the Survey Department for a property with a single survey number (that is, property not sub-divided into different parts with different sub-survey numbers).
Podi Extract is a document that shows sub-division of a property among joint land owners. For instance, when an ancestral property is divided among children, they will get different sub-survey numbers such as 159/1, 159/2, etc.
v. Akarband extract
Akarband indicates the total extent, boundaries and classifications of the property. This is issued by the Survey Department.
vi. Village map
This document shows a clear map of the village in which the property is located.
Documents for BDA sites
Whenever government acquires land for the development of a layout, the previous title is extinguished by law, and the title starts from BDA’s acquisition of the property. The following documents are needed for such sites.
Primary documents of title
i. Allotment letter: Issued by the BDA in favour of the present owner if he/she is the original allottee
ii. Possession letter: Issued by the BDA in favour of the present owner, recording the handing over of the possession of the property to the present owner
iii. Lease-cum-sale deed: Executed and registered in favour of the allottee by the BDA
iv. Absolute sale deed: Executed and registered in favour of the allottee by the BDA, 10 years from the date of the original allotment
v. Building sanction plan: Issued by the BDA (or by the BBMP if the building was constructed after BDA handed over the land to the BBMP) for any building constructed on the property.
vi. The secondary documents of title for BDA sites are Khata, Tax paid receipts and EC, which have been explained among the list of general documents, in the previous article.
A thorough scrutiny and verification of these documents will enable you to ensure that the property you are buying has a clear, marketable title, and will help you avoid fraudulent sales and lengthy litigation.
For BDA site allotted as compensation to original land owners
When BDA acquires land (usually agricultural land) to create residential layouts, it incentivises the landowners. For every acre the BDA acquires, the landowner is to be given a 60X40 site. In principle, this scheme works well for the landowner because of the increase in land value once the layout is created and the market value appreciation of residential plots over time.
The allotment process of this site is different from that of a regular BDA site:
i. For the sake of convenience, the BDA registers the site in the name of the Khatedar.
ii. In normally-allotted BDA sites, all previous titles and titular claims are extinguished and the new allottee becomes the owner. But in the case of compensatory sites, the land would typically be ancestral land, and many individuals (heirs, minors, etc) can claim rights over the property. This ‘ancestral’ status carries forward into the compensatory site as is.
iii. In some cases, the original landowners would have been illiterate or didn’t have enough cash to even register the compensatory site in their name (transfer it to their name from the BDA). These owners might have then drawn up sale agreements with third parties or brokers. In such cases, it has been observed that sometimes the owners have gotten into agreements even before they are allotted the sites. The third parties then carry out the rest of the site acquisition formalities. They sometimes pay the money for registering the site itself.
All this would have happened by the time you run into such a site.
What you need to do: Compensatory sites can be identified from the allotment letter of the BDA itself, so always insist on seeing the allotment letter. A compensatory/incentive site will be mentioned as such. Note that you will not be able to spot the difference between a normally-allotted BDA site and a compensatory site from a site plan map stone which is sometimes located at key street intersections in the layout.
If you are buying such a site, you need to obtain the same documents that trace title claims, presence of minors, etc., as in the case of buying sites on land with agricultural past, described earlier in this section. Bring the entire owner’s family tree into the scrutiny process. Find information on all prior agreement holders.
It is important to have a competent and independent lawyer scrutinise all the property-related documents to ensure the property has a clear title.
[This article was originally published in the book ‘Buying, Renting and Investing in Property in Bengaluru’, and has been updated.]