Investing in a land? Here is our Checklist
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Land buying is not as simple as it might appear!! By deciding to buy a piece of land, you’ve taken a step towards building your dream, maybe in the form of a home or a commercial space! Vacant land is one of the most disregarded and misinterpreted real estate fundings in the world. Generally, most real estate investors completely go wrong in identifying the true potential and benefits that come with owning a land in its unaltered form.
A common man is often not aware of the hazards associated with buying a land and the complications associated with it. It should be always borne in mind that acquiring land is an entirely different kind of a ballgame as compared to buying a flat which is way too easier. Buying a plot of land is crucial as it implies a lot of money. Therefore, before making the big plunge, one should invariably take the following points into consideration as it will not only ensure a safe investment but also simplify things for you.
Let’s take a look at the checklist below
1.????To ascertain beforehand that it is the seller only that owns the land
Even if you have finalized this particular ‘piece of land’ and can’t get your eyes off it, it’s always better to verify if the seller/builder actually owns it before coming to any hasty conclusion. There have been innumerable cases of fraud and trickery that you really need to be watchful of when the need be. ?Check whether the seller at all holds the legal rights of selling it. Ask for proof in papers; don’t just trust in verbal assurances.
2.????Is the NA order in place?
Unless it’s clearly defined for some other purpose by the govt, all the land in India is by all means ‘AGRICULTURE LAND’. A non-agricultural piece of land in India is commonly defined as ‘NA’ by the real estate industry. An agricultural land can be used for cultivation. But if one desires to serve any non-agricultural purposes on it then, one has to first convert that Agri land to non-agricultural (NA). Nevertheless, just because a land has got an NA status, does not suggest that the same can be right away used for residential purposes. This is because the ‘NA land’ too has various categorizations.
So, if a plot of land is segregated as NA– Resort, that signifies that one can utilize it only for ‘resort making’ and not for any residential scheme. So, a proper categorization has to be there and is to be sought, whenever one goes for ‘land hunting’.?
3.????To validate if the owner opted for a loan to build the particular project
You need to cross-check with the owner whether they had taken a loan to purchase that piece of land. If they have, don’t be scared!! That’s a good sign which says that the land has gone through various legal verifications and validations and hence has been granted a loan by the bank. You just need to know whether the loan has been repaid or not. If not, refraining from buying that land would be a good option.
4.????To verify the floor space index (FSI) of your plot
Prior to the construction of your dream house, you have to mandatorily ensure as to how much land can you actually construct there. To put it simply, you have to have a firm idea about the Floor Space Index (FSI) of the plot. It basically relies on the location of the plot. Say for example you have bought a large piece of land but the FSI is really less for that location, you won’t get to construct much there. It turns out to be that it is really a waste of money and time for you!
5.????Enquire about the Sale Deed
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It is a widely practiced misconception that once the ‘sale agreement’ is done the buyers are legally safe as the plot is now registered under their name. Unfortunately, this is a complete myth and the “agreement to sell” does not necessarily make you a valid buyer. The ‘agreement to the sale’ is just the AGREEMENT TO SALE document, which means that there has only been a legal understanding between buyer and seller on the preliminary points and terms, based on which the sale will take place in the future. It simply chronicles the terms and conditions of the deal, how much are you paying and also the future dates; i.e., by when will you clear the payments, etc.
6.????The history of the land is important
In some cases, it is a pre-requisite that you are aware of the ownership of the land in the past decade. The ownership should properly reach down no gaps in between, should be there. This will help assure that no dispute takes place over the land, in future.
7.?????Calculate the Annual Maintenance Charges of the plot
Your ‘shelling of money’ doesn’t end with the purchase of a plot and bagging the ‘sale deed’.?What many are not aware that you also need to be accountable for the maintenance of the plot and its payments. ?For the upkeep of various facilities like gardens, water, security etc. you have to pay on a yearly basis and it’s proportional to the plot size. For example, if it’s Rs 8 per sqft and your plot size is 2000 sqft, then your maintenance per year would be Rs 16,000.
8.????Will an individual 7/12 extract be issued against my name?
Well, ‘7/12 extract’ is a term which is used rampantly in states like Maharashtra and Gujarat. In Karnataka, it’s termed as 7/12 Uttara. It’s nothing, but a document maintained by the revenue department which records how the land moved from one owner to the other, in the last 30 yrs. So, this document records all the intricate details of the sale and purchase of the land and this way, you will find out who the present owner of the land is.
9.?????The location of the plot is of utmost importance
One of the most important aspects, that one should always bear in mind before investing in a plot is its location. You might decide to sell the plot in the future and here comes the importance of ‘the area’. To get a good resale value, the plot needs to be well located. Also, whether the land is located on a plain or a slopy region, needs to be taken into account before making the closing call.
10. ?All the basic amenities need to be reviewed
One must do a thorough investigation in terms of the basic amenities including electricity, water supply, the pathways around, security and fencing of the plot etc. before signing the sale deed. Will it come from the municipality or the local corporation or they are having an arrangement of their own is something you need to ascertain in detail, beforehand.
Buying a piece of land in India can be quite a daunting task, for the uninitiated. However, with the above checklist, you’re unlikely to go wrong. Now that you’re fully equipped, it’s time to take the first step towards your dream home!
Last but not the least these tips ?might come in handy: