House.Hunting?
Learn the when, from and how to go
about it. Here's the legal lowdown on house buying
One tough cookie That's what you have to be when house hunting. Because if you're sitting
back, working up visions of yourself as a proud owner of a fully furnished house, there's
something you need to do: Wake up and smell the coffee! There's a lot or pre-buying
problems you might face when buying your 'dream home'. |
WHOSE LAND IS IT ANYWAY?
Possibly the first thing you have to check once
you've spotted your space is to check on the title or the ownership paper of the property.
Who the owner is and how he or she got the property. Check if there are other possible
heirs to the land to avoid disputes later. How? Ask if anyone has a claim by putting out
advertisements in the papers. In case of ownership by a minor, there should be court
approval - minors can't enter into contract.
STAMP DUTY
Stamp duty has to be paid. The rates differ for each
state, but in Maharashtra, for residential
premises there is a duty of eight percent of market value of the property. And if it's
commercial property it's a flat 10 percent.
YOU NEED A SOCIETY
So you've got past the title and stamp duty but
there is no way you can escape that absolute essential - a building society. A building
society could be formed by the builder, and the flat purchasers become the members. Or
people come together and form one without the builder. The land and the ownership is in
the society's name, therefore, the municipal corporation will submit one bill to the
society who collects the money and pays it.
WHY YOU NEED MUNICIPAL CORPORATIONS
Before buying a house there are several certificates
you have to obtain from this esteem organization. To begin with, Floor Space Index (FSI) is the ceiling that the municipal
corporation has set for builders depending on the space available in each city. So, you
need to get a commencement of Intimation of Disapproval (IOD) certificate an occupation
certificate (so you that you can occupy the flat) and a completion certificate issued by
the municipal corporation. This will keep you safe from buildings collapsing over you
head! If you are buying a place near the sea check the Coastal regulation zone (CRZ) which
is the distance one can build from the high tide line.
MAKE SURE YOU AND YOUR BUILDER AGREE!
You've made it to the agreement phase! You're nearly
there. Though there are certain things that you should know. After you agree upon the
price, there is a transfer fee that you have to cough up. This varies from building to
building, and although the law permits only Rs 25,000 as a maximum payment in a
co-operative society, because of low times, at can vary. This is shared by the buyer and
seller. While the market practice says it should be a 50-50 share, there is no hard and
fast rule on it. You also have to get a society approval called society No Objection
Certificate (NOC)
37 I
It's yet another form... To avoid transaction of
black money, the government has introduced the 37 I form. This has to be submitted for
houses that cost beyond 75 lakhs in Mumbai, 50 lakhs in Delhi and 25 lakhs in Madras and
Bangalore. The form is then submitted to an authority called the "appropriate
authority" which is a part of the income tax department. The form must be submitted
within 15 days of signing the agreement but it takes up to three months to clear. It is to
cross check the value of the property.
THE GRAND FINALE
You now touch the finishing line by completing the
transaction. Pay the price, stamp duty, take possession and submit your forms to the
society. You may be asked to submit to the registrar, whereby you incur a registration
fee- a maximum of 20,000. This is not compulsory for transactions of co-operative
societies.
MORTGAGE
Taking a loan to buy a house means to mortgaging it.
Mortgage is a security against the loan, where one puts down a deposit and pays back the
interest and the principal in installments. The conditions differ from loaners like HDFC
and other banks. Now check with your advocate to make sure everything is in place.
Well, now that you're a near professional on the
do's and don'ts of buying a home, it's time to start dreaming.
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