Monday, April 30, 2012

Before buying a land in Kerala - A Checklist

Nowadays, most of the people invest a big part of their savings in land. But many people don't know what all things to check for while purchasing a land and this is the reason why people get trapped! Legal issues are the biggest challenge for a newcomer to the field. As the real estate becoming the real business these days, i hope this will be a helpful article for you.

Now, don't get hesitated.Just collect your funds and get ready for smart investing!Below are the important points to note while you get ready for investing in land


1) Check the 'Property Title deeds'

The first step is to see the title deed of the land.This will help you to confirm whether the land is in the name of the seller and that the full right to sell the land lies with only him and no other person. Please check the Original Deed and not the photostat copy. Sometimes the seller may have taken a loan by pledging the original deed.Kindly check whether the seller has permitted any entry/access to others through this land and whether any other fact has been left undisclosed by the land owner. Get the assistance of a lawyer if possible. Along with the title deed, the buyer can also demand to see the previous deeds of the land available with the seller. 

2) Check the property 'Tax receipt and bills'

Checking whether are taxes are paid up to date in the local bodies will be helpful to ascertain the authenticity of the land. The owner should also possess the latest tax paid receipts, which you may inspect. Enquiries should also be made in various departments of the municipality to ascertain whether any notices or requisitions relating to the property have been issued and are outstanding and not yet complied with. While inspecting the property tax receipt, it can be noted that there are two columns in the tax receipt. Make sure that the name entered in the owner's column is correct. The second column will be for the name of the one who paid the tax. Sometime the owner may not have the tax receipt with him, in such cases, contact the village office with the survey no. of the land and confirm the original owner of the land.

 If you are buying a house along with the property, then the house tax receipt should also be checked. Also ensure that the electricity and water bills are up-to-date and if there any is balance payment to be made, ensure that the seller makes it

3) Non-Agricultural Land Permission 

If the land you are planning to buy is a paddy field or agricultural land and if you plant to use it for residential/commercial/industrial purpose, the agricultural land has to be converted to non-agricultural land and a Non Agriculture Order has to be obtained from the Collector of the District where the property is located
Along with this, one needs to take the latest receipts evidencing the payment of Non Agriculture Tax. In cases where the conversion from agricultural use to non-agriculture use is not done within the stipulated period then, there should be an order from the concerned authority extending the period.
37(I) Clearance [No objection certificate under section 269 (3) of the Income Tax Act, 1961]
If any immovable property in cities specified by the Appropriate Authority is transacted above a certain value, it needs to obtain a No Objection Certificate from the Appropriate Authority as defined under the Income Tax Act. A transaction would be incomplete and invalid if this clearance is not obtained. A statement in Form no. 37(I) needs to be jointly submitted by the seller and purchaser. The appropriate authority would issue a No Objection Certificate, if it feels that the property has not been undervalued. If the appropriate authority feels that the property is undervalued, then it would do pre-emptive purchase of this property and sell it subsequently through an auction/tender. Various transaction limits have been set for various cities.

4) Check the property Encumbrance Certificate 

Before buying any land or house, it is important to confirm that the land does not have any legal dues. It is available as a certificate called encumbrance from the sub registrar office where the deed has been registered, stating that the said land does not have any legal dues and complaints. The encumbrance certificate for the past thirteen years should be taken or for more clarification, you could demand 20 years encumbrance certificate to be checked. If you still have any more doubts, you can take a Possession Certificate of the ownership of the particular land, which is available from the village office

5) Crosscheck whether it is a Pledged Property

In some cases, people take loan from bank pledging the property. In those cases, you will have to ensure that the seller has paid back all the dues.The receipt of the payment made can't be taken as a proof in all the cases. A release certificate from the bank is necessary to release all the debts over the land legally. You could buy a land without the release certificate. But if you want to take a loan in future, the release certificate is a must.

6) In case of More than one Holder

You should get a release certificate from each owner before buying the property. Otherwise it may lead to unnecessary legal issues afterwards.

7) If NRI/Foreign landowners

A person staying abroad can also sell his land in India by giving a Power of Attorney to a third person authorizing him the right to sell the land on his behalf. But in such cases, the power of attorney should be witnessed and duly signed by an officer in the Indian embassy in his province. There is no legal support for Power of attorney signed by a notary public.

8) Making a Property Agreement

When all other matters are settled between the parties, it is better to give an advance and a written agreement. This will ensure that the owner does not change his word regarding the cost as well as make a sale to someone else who offers more money. 

The agreement is written in Rs.50 Govt stamp paper. The agreement should state the actual cost, the advance amount, and the time span within which the actual sale should take place and how to proceed in case of any default from either party, to cover the loss. The agreement can be prepared by a lawyer and should be signed by both the parties and two witnesses. After signing the agreement if one of the parties makes a default, the other party can take legal action against him.

9) Registering the property

The land can be registered in a sub registrar office, after preparing the title deed including all the relevant information. You could get the title deed written by a government licensed Document writer. Even lawyers can prepare the deed, but the document can only be computer printed or typed, not handwritten. Only those who hold the scribe license can prepare handwritten documents.A draft should be prepared before actually writing the document in stamp paper. Make sure all the details mentioned are accurate. If there is incorrectness in the document after registering, a secondary document with the correct details has to be registered and depending on the incorrectness, the registration expenses will be repeated. Make sure that the deed is registered within the time limit mentioned in the agreement. Original title deed, previous deeds, Property/House Tax receipts, Survey Plan (optional) etc plus two witnesses are needed for registering the property.

 For land costing more than five lakhs, the seller should submit either his Pan card or Form Number 16 during registration.The expenses involved during registration include Stamp Duty, registration fees, Document writers/ lawyers' fees etc. The stamp duty will depend on the cost of the property and varies from Municipality to Corporation to Panchayat. In Panchayat the stamp duty will be 7% of the cost of the land whereas in Municipality it is 8% and in Corporation 9%. Two percentages will be charged as the registration fees. A document writer’s fee also depends on the cost of the property and varies with individuals. There is a percentage prescribed by the government as Document writers fee and they cannot charge more than the prescribed limit. After registration, the registered document will be received after 2-3 weeks, from the registrar office. 

10) Changing the title in Village office

Changing the title is a must.The whole legal procedure of buying the property will be complete only if the new owners name is added in the village office records. An application can be made along with the copy of the registered deed to the Village office for this.

11) Measurement of the Property 

It is better to measure the land before registering the land in your name. Ensure that the measurements of the plot and its borders are accurate. You can do this with the help of a recognized surveyor. This will avoid lots of problems in the future.It would be if you can take the survey sketch and compare!

All the best for those who enter in the real estate field for the first time.Remember trading land is like all other trades.There will be huge profits if you think and invest.Gambling is always dangerous. If you have money with you to invest, go on.If you don't have perks, plz don't gamble by just signing agreements because the land market is not in its full dynamics these days. It is a long term investment! Wish you a profitable deal!!!!!!!!!!!


  1. Good and useful to all especially for malayalees.

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  3. good and informative....Kerala Land providing information regarding flats and apartments sale in Kerala, land for sale in cochin, house for sale in cochin and all real estate matters in Kerala.

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  6. Thanks for posting this useful article.Sounds interesting.Nowadays most people are investing money on property that to have villas in it.As it is source of income in future.Can you please suggest what all things we have to consider while buying flats in cochin area.

  7. Hey nice post dude!!! it is really help ful for the buyers who are looking for Buy, Sell, Rent property at Hyderabad Bangalore properties for sale etc.

  8. Everyone must read this informative article before buying land or plot in Kerala. This blog clearly describes the things to check for while purchasing a land. Can you please give me some tips for buying apartments in Thrissur.

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  13. Hi ,

    I am from Tamilnadu and have a plan to buy 1 Acre of Farm land in iduki dist. So can you plese let know whether any specified certificate/letter required from Tamilnadu governmnet ?

  14. Hi,
    Thanks for sharing this article. Its really useful and informative.

  15. Hie, I just wanted to know how to see whether there is any further plan of Road Widning from the plot we are going to buy.
    How can one Check it.

  16. This can help so much! We're planning to buy house and lot in Pampanga, under a real estate community. Hoping that everything will be fine.

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  18. Great Post. We too have developed a post on similar lines. Land Buying Checklist

  19. Most accurate and useful information shared about Cochin Real Estate.
    I have subscribed your blog for future posts.

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