Buying a commercial property usually involves a huge amount of money and major care must be taken while conducting such a deal. A resale commercial property has various benefits and is preferred over under-construction projects by most investors. However, you must ensure that the property has clear ownership titles and all the government permissions are in place. Here is a guide of all the documents that must be scrutinized by you, while buying a commercial property that is up for resale.
One of the most important documents that you must examine from the seller of the resale property is its sale. The sale deed is the proof of the sale that must have occurred between the current owner and the previous owner. You must crosscheck all the contents of the sale deed rigorously and you can even ask questions related to some of the aspects of the sale deed from the current owner if you have any doubts.
The building plan is another pivotal document that you must examine to make sure whether the property has a sanctioned building plan or not. A building plan is mostly approved by the municipality of the locality. It consists of the blueprint of the property including the equipment layout and various utilities. In case any additional construction is done in the sanctioned building plan it is liable to be pulled down by the local authorities as it would be considered illegal.
A Completion Certificate is very crucial and will ensure that the building has been constructed in accordance with the local laws and is ready to be occupied by people. The certificate is issued by the municipal authority of the area and is crucial for obtaining loans from banks or NBFCs. It is also important for getting water and electricity connections in the building.
Any building is bound to pay various taxes to various government departments. You must inspect that all taxes have been paid and ask the current owner for the receipts before buying the property.
This certificate ensures that there are no dues or obligations against the building. This document is also very important and can be obtained from the sub registrar’s office where the property has been registered.
The builder must have given a Possession Certificate of the property in question, to the first owner. This document is not re-issued for the purpose of resale but the current owner must hand over the document to you.
The market value of the property
Market value signifies the price at which a property could be bought in the open market on the date of execution of such an instrument. The Stamp Duty is payable on the agreement value of the property or the market value, whichever is higher.
Encumbrance Certificate (EC)
Encumbrance means changes in the ownership or liabilities created on a property that is held against a home loan as security. An EC comprises all the registered transactions done on the property during the period for which the EC is sought. It is a certificate sought for a particular period evidencing the property purchase/sale, the presence of any transaction or mortgage. You shall submit a copy of the Sale Deed to obtain an EC.
Betterment charges receipt:
Before issuing a Khata Betterment charges also known as improvement fees are to be paid to the Municipality or Corporation Authority. The developers are entitled to pay a fixed amount as betterment charges to the municipal body. You should obtain the receipt of the same at the time of property buying.
Power of Attorney (POA)
It is a legal procedure that is used to give authority to another person by the property owner on his/her behalf. One is allowed to either give a Special Power of Attorney (SPA) or a General Power of Attorney (GPA) to transfer one’s rights over one’s property.
Building approval plan
A building plan is sanctioned by the respective Corporation or Municipal Authority. Zonal classification, road width, floor area ratio (FAR), and plot depth are the parameters based on which the authorities sanction a building approval plan. A set of documents are required to be submitted by the owner in order to obtain a building approval plan.
If you are planning to buy a commercial property, these are the set of documents that you will need in order to complete the process successfully.