• Home Loan BYTES FROM OUR KITCHEN

    Legal Aspects of a House

    Buying a home will require you to invest a lot of money and you will also need to invest precious years of your life to pay off the home loan that you will opt for to buy the house of your choice. Hence, you need to make sure that before investing your money you have a fair idea of what you are getting into and so you should inspect the property and make sure that all the legal documents and other factors are in order.

    Check the Land Registry - You should check the Land Registry to ensure that the house is in the name of the person who is going to sell it. You should also check that its location, size and other characteristics correspond to those that are recorded in the registry and enquire about any pending charges, find out if it has been rented in the past and also find information on expenditures and community statutes.

    Check with the Property Manager - You can check with the property manager to find out if the house has any pending community payouts.

    Check with the City Hall - Check with the City Hall if the seller is current with the payment of tax and other charges.

    Check with Mortgage Lenders - If there is any pending mortgage on the property with a bank or financial institution, you can check the same with the lender and make sure that the seller cancels the mortgage before selling the house to you. You should make sure that all the dues are paid off before signing the contract.

    Buying an already constructed home

    Before entering into any commitment to acquire an already built home, you should check some important aspects. To avoid any kind of fraud and risking your money, follow these steps:

    • Check the Companies Registry - Check the registration data of the developer or builder (registered office, share capital, etc.)
    • Check the Building Permit – Check and make sure that the building permit was applied for and granted.
    • Check the Property Registry - Verify that the ownership of the plot corresponds to the records of the developer or builder. Check also if there are any pending liabilities for the site (mortgages, liens, etc.)
    • Check the Insurance Policies – You should also verify that the house has all the insurance policies in order such as fire insurance, theft insurance etc. so that you can be protected against any damages.

    Purchase of Under Construction Properties

    Before you commit any amount of money to the developer, you must collect certain information:

    • Make sure that the project has been approved along with its technical aspect and that the builder has obtained the required building license.
    • Check the Certificate of Land Registry entry that will reflect the new construction and ownership of the seller, and the status of liens and encumbrances of the estate.
    • The builder should ensure, through an insurance policy or bank guarantee, that the amount paid as down payment for the property will be returned to you in case you do not get delivery of the property on time.

    At the time of signing the contract, the seller must provide the buyer with the document stating the expected completion date and the expected date of delivery of the property i.e. the day on which you will get possession of the completed house. If the deadline expires and you do not get possession of the house, you can either:

    • Terminate the contract, ask for refund of the amount paid as down payment along with all other charges such as legal fees, OR
    • Grant an extension, which shall be recorded in an attachment to the contract and will specify the new deadline.

    The sums paid as advanced by the various buyers should be placed in a separate bank account by the developer or the promoter and they can only use the funds deposited to this account for fulfilling the needs arising from the construction of the houses. This will ensure that the promoter can return the money of the buyers in case they are unable to construct and deliver the possession of the houses to the buyers.

    Why Should I opt for a Sale Deed?

    You may wonder whether it is worth spending time and money to opt for a Sale Deed. If you have doubts, here are three good reasons for writing and recording the purchase of your home with the help of a Sale Deed:

    If you want to apply for a home loan or a mortgage to purchase your new home or if you want to pledge it as collateral for a loan, the house should be registered in the Land Registry. And in order to register the house, you first need to have a Sale Deed of the same that will specify that you have purchased the property and you are its rightful owner.

    Once you have registered your house with the help of a Sale Deed and you have the full assurance that the house is in your name, no one else can claim that they are the legal owner of the house. Also you will have the assurance that the house agreement is fully compliant with the law.

    How Do You Write a Sale Deed?

    The usual practice in home buying is the signing of a private contract of sale, then converting the same to a Sale Deed. Once the private contract has been elevated to a Sale Deed, it becomes easier for the owner to register the property in their name and make sure that they do not have any problem in opting for different types of insurance policies for their house. If you want to convert your contract of sale into a Sale Deed, you will need to clear your property taxes and other taxes that can be applicable on the house that you have purchased.

    Before applying for a home loan, it is advisable that you take care of all the legal aspects of the house so that your loan application can be processed without any difficulty.

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