Step-by-Step Guide for Due Diligence When Purchasing an Apartment or Site in Karnataka
Buying an apartment or site in Karnataka involves careful verification of legal, financial, and regulatory aspects to ensure a secure and hassle-free transaction. Whether purchasing an independent site for construction or an apartment in a residential project, it is essential for buyers to conduct due diligence to verify ownership, ensure compliance with local regulations, and confirm the absence of any legal disputes. The following step-by-step guide provides a comprehensive approach to help buyers make informed decisions.
Step 1: Verify Title and Ownership of the Property
The first and most important step is to verify the title ownership of the site or apartment. The seller (whether an individual or a builder) must have clear ownership of the property and the legal right to sell it. Buyers should check RTC (Record of Rights, Tenancy, and Crops), mutation extracts, and obtain an Encumbrance Certificate (EC) to confirm clear ownership. For apartments, ensure that the builder has legal rights over the land and development approvals.
Step 2: Check Approvals and Compliance with Regulations
For sites, buyers must check land conversion status and approvals from local authorities like BDA, BBMP, or BMRDA. Apartments must have approvals such as Building Plan Approval, Commencement Certificate, Occupancy Certificate, and RERA registration. Without these approvals, future legal complications may arise.
Step 3: Conduct a Physical Inspection of the Property
A physical inspection helps verify if the property aligns with legal documents. Buyers should check for encroachments, road access, and proper infrastructure. For apartments, inspect unit layout, amenities, security, and construction quality.
Step 4: Review Financial and Tax Records
Buyers must verify all property tax payments, utility bill clearances, and mortgage status. For apartments, ensure no outstanding maintenance dues. If the property was financed earlier, obtain a No Objection Certificate (NOC) from banks.
Step 5: Verify Legal Documents
Ensure that all necessary legal documents, such as the Sale Agreement, Khata Certificate, NOCs, and Allotment Letters, are in order. These documents help in legal compliance and property transfer.
Step 6: Evaluate Market Value and Price
Research and compare the price of similar properties to ensure you are paying a fair price. Government property records such as Bhoomi and RERA Karnataka can help determine pricing trends.
Step 7: Register the Sale Agreement and Execute the Sale Deed
Once satisfied with all legal aspects, the Sale Agreement should be signed, and the final Sale Deed registered at the Sub-Registrar’s Office. Ensure Khata transfer is completed for tax purposes.
