The Necessary Clearances Required for Transfer/Sale of Property in India
Getting necessary clearances is vital for shortlisting a real estate project in India.
Builders must always be able to produce certain valid documents. Unless they do, one should not proceed in purchasing a property from them.
Let us take a look at what these documents are and how builders can obtain them.
Vital Clearances a Builder Must Possess
- Land Registration or Title Deed of the property - To obtain the title deed, a builder needs to apply to the urban development authority. Some of the necessary documents include - site allotment notice, tax paid receipts, sale deed, certificate, registration certificate, possession certificate, and intermediate sale deeds. Another essential document to be produced is an Certificate. Then you need to obtain transfer certificate. The final step for registering this deed is paying a stamp duty and completing the process at the sub-registrar's office.
- No Objection Certificate - The land seller gives this to the builder. This is another essential document required in order to obtain necessary clearance. If you are interested in buying a property, make sure that the builder can produce a NOC. To get a NOC issued, builders must obtain, fill up and submit a copy of the appropriate NOC form. One can view resources like OnlineRTI to find out how a NOC can be issued. They can file RTIs at affordable rates.
- Plan Sanction Letter - The concerned local authorities have to approve the proof of construction plan. Also known as the plan sanction letter, this can be obtained by builders who provide valid documents for the property. One can contact their local authorities regarding details of necessary documents.
- Encumbrance Certificate - The application of an EncumbranceCertificate follows a certain procedure. An application needs to be made on form 22, with an affixed 2 Rupees stamp. This application needs to be supplied to a Tahsildar along with one’s current address. Following that, yearly search fees need to be paid. The form needs to be submitted at the designated sub-Registrar's office.
- Agriculture to Non-Agricultural Land Conversion Certificate - This is a clearance provided by a concerned town planning department to the builder. It functions as a NOC for the utilization of agricultural land for exclusively non-agricultural purposes. An application needs to be made to the land revenue department commissioner. Documents to be attached are the mutation extract, rights, tenancy and crops (RTC), original sale deed detailing ownership, partition deed, certified survey map, and the latest tax receipt.
- Land Use Certificate (certifies the residential use of a land) - To obtain a Land Use Certificate, builders need to produce their tax receipts till date. A nominal fee might be applicable. The information of applicants (builders in this case) needs to be filled in, along with land location, survey details etc. The good news is, one can obtain the certificate on relevant online portals. Keep in mind that without a valid Land Use Certificate, no building project can go on.
- Fire Department NOC - A No Objection Certificate (NOC) needs to be obtained by the builder during the pre-construction phase. The relevant application form for this NOC can be downloaded online. Builders must look on the website of their respective state authorities. It has to be filled in and submitted to the relevant issuer.
- Environmental clearance - Environmental clearance should be obtained from the respective State Pollution Control Boards. WIthout the appropriate approval, buildings cannot be constructed legally. The State Pollution Control Board under Air & Water Acts must grant a ‘Consent to Operate’, a local municipality NOC, fire safety department approval, and much more. Information regarding this is available online. Applying for RTI online on sites like OnlineRTI is a good idea. Gaining proper environmental clearance should always be a priority.
- Commencement Certificate - Keep in mind that a valid commencement of construction is necessary for any construction work to proceed. To gain this, a builder needs to submit the project plan to local authorities. Subsequently, all required NOCs need to be acquired by the builder. Clearances from departments of water, sewage, fire, and electricity need to be produced. Following that, the municipal authority will perform checks and approve the Commencement Certificate.
- Khata (Account) Certificate/ Extract of the Property - This represents a property’s current owner. It will be required during the process of transferring khata to your name from that of the builder. The Khata Certificate/Extract can be registered from the Sub-Registrar’s office, within whose jurisdiction the property is located.
- Tax receipts of the property - A builder should have possession of the tax receipts for the past three years. If you buy a property for which tax has not been paid as per requirements, you might be subject to paying monthly penalties to the tax department. As a prospective buyer, one should ensure that all receipts till date are easily accessible.
- Insurance premium receipts - Builders must be equipped with adequate insurance premium receipts. These documents are necessary to protect a property against unfortunate events. As a prospective new owner, you should take heed of all insurance receipts to avoid complications.
The above-mentioned clearances are necessary during the construction phase. Let us look at some additional requirements to be obtained from projects -
- Completion certificate - This needs to be obtained by builders following the completion of the project. Builders must apply for this certificate from relevant authorities. If the certificate is offered, the building has the green light for receiving requirements and supplies.
- Occupancy Certificate - To obtain this certificate, builders have to prove compliance with all building standards, drainage norms, fire safety, and elevator safety norms. Once this is obtained, the property is legally open for occupancy.
- Fire NOC (post-completion) - Following the completion of construction, the builder must apply for another fire NOC. Make sure that your chosen builder has this clearance.
These are all the documents/clearances one should ask for from prospective sellers/builders.
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