A real estate investment offers the investor a sense of financial security for the future. However, being legally safe while doing so is of utmost importance.
For most people, buying a site is an achievement and rightly so. Land is a tangible asset that is getting more expensive by the day, especially in a developing country like India. Even more so in the case of Tier-2 cities including Mysore.
Given that any real estate investment is a huge investment and in most cases a once-in-a-lifetime investment, potential investors consult their families and friends before taking a final call or even begin with it. However, while there are genuine developers and resellers, fraudsters disguising themselves in order to cheat investors in order to earn profit exists. Despite measures taken by the GoI to curb real estate fraud, they still happen almost on a daily basis. One needs to be aware of the dangers to avoid falling prey to fraudulent investments and losing money.
Through the words of Mr. Srihari Dwarkanath – Chairman of GSS Project Consultants Pvt Ltd – here are the precautions that need to be taken by any site buyer.
Points to note before considering a site for purchase:
The site must be residential (unless your need for investment is different, such as farming, in which case you should invest in agricultural land)
The site must be government-owned or private-owned
In case government-owned, was it owned before or is it being allotted to you for the first time
In the case of privately owned, is there clarity, clearance, proof of ownership and other documents
Approval of authority in charge – for example, MUDA (Mysore Urban Development Authority) for a site in Mysore. This ensures there are no legal complications, meaning that the property is legitimate
Lease deed, lease-cum-sale deed or sale deed – which of these does the property documents state?
An absolute sale deed gives the owner the authority to do anything with the property that is legally approved
A site can be owned without doing anything with it for years and land requires the least maintenance out of all types of properties. Site can also be leased out or resold at any point in time. In fact, given the high appreciation value of land with time, many investors purchase sites just to resell them in the future for profit.
Government-owned site allotment could take up to 20 years and such sites have the highest number of applicants. However, government-owned sites are 100% legitimate and free from litigation.
The allotment could also be handed over from the first buyer to the next, with the transfer of ownership (only applicable in the case of a sale deed and not a lease-cum-sale deed). Post this step, the site will be registered in relevant buyer’s name. Note that government may have imposed rules for lease-cum-sale deed such as 10 years or 5 years of ownership before the buyer can resell the site only after the government allots them an absolute sale deed.
In Mysore, 50%-52% is the available sital area. The rest constitues roads, civic amenities, etc. and the rights on these will be eventually transferred to the government (relinquishment deed).
Once private developers construct layout, the government verifies whether the legal norms including safety have been followed and once verified, offers the release deed for relevant sites to be made available for purchase. Buyers must check for the release deed before investing in site purchase and other factors such as directions are secondary and unlike the popular belief, not as important.
A buyer must ensure the transfer of legal titles from the rightful seller who currently holds the legal rights. This is the only way to claim proof of ownership of the said property.
In case property owner and developer are different, joint ownership is valid. In any case, a legal opinion on verification of title is a must and buyer should never skip this step, so as to avoid future legal complications.
The site measurements must also be verified by being physically present at the site and the promised vs. actual measurements must be compared, which should ideally match.
The stamp duty must always be paid according to the current guidelines by the government, regardless of the overall pricing of the site depending on the developer and the quality of the build.
According to RERA, the maintenance of the property must be done by the developer. Basically, the developer must take up the responsibility and one that does is a reliable developer who can be trusted.
The sure-shot way to invest in property safely is to go through a renowned and thus reliable consultant, such as GSS Projects. The experienced and qualified team will ensure that your investment is hassle-free and 100% safe. Given that GSS Projects is also a developer and has over 25 years of real estate experience, you also have assured legal protection when you opt for its developed property.
Winding up, be extra careful with the above-discussed points before buying a site and make a smart investment in your future.