Tags Posts tagged with "Release Certificate"

Release Certificate

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Buying a real estate property is often considered as one of the good investment strategies. It has been observed that people prefer investment on real estate considering it as the best long-term financial planning for retirement. Most of the people invest money into rental property hoping for good return after few years. However, you may face major loss if you are not well prepared before the property deal. It is a mandate that one should do a proper research before a property deal. So, here are few essential points that you should keep in your mind while buying real estate.

Approval and licenses:

Check all the paperwork done by the builder e.g. certificates for commencement of work, environmental clearance and approval for building plans. You should also check for the land title status and check if the land belongs to builder or the builder posses only the development rights. Below is a list of documents that you should verify.

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  • Title Deed:  Verify the title deed of the land to validate if the builder holds total right to it. Moreover, it is always wise to take a help of a lawyer to cross check the deed.
  • Release Certificate: If the property is in resale, then check if the property is under a bank loan. In such cases, ask for a release certificate from the concerned bank, which confirms that the loan on the possession has been closed. Also verify Encumbrance Certificate to check that the property is free from all legal dues.
  • Verify land use:  Check the land-use zone as per the city master plan for the plot. You can avail the plan from the local body office in the respective city. Also, ensure the layout holds approval from the development corporation as well as the local body of the city.  
  • Receipts of Property Tax: If the property is in resale, then ask for the previous property tax receipts from the seller and other bills as well. This will ensure you that there are no pending dues on the land.

List of banks financing the project: Once you decide the final property and ensure that all approvals are in place, make a list of banks which are ready to finance you and make a final choice with the bank that can provide you loan at the minimum interest rate.

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Calculate the total cost: It is seen that brokers usually mention the basic cost excluding other factors such as parking/club/statutory charges, preferential location charges, internal/external development fees, and service tax. On adding all, the total amount exceeds your budget bracket. So, always check for the final price of the property.

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Verify the Builder past record: It is always recommended to avoid the properties under litigation. Hence, one should do a thorough check on builder’s reputation in the market. For this, you can validate the builders’ current and past projects through posting queries on various online real estate forums.

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Buy Vs Rent: Most of the people purchase a property with a view to use the rent to pay the EMIs towards the property loan. Experts suggest not to adopt such approach, as the rental yield on residential properties is only 2 to 3%. Additionally, the property may remain unoccupied for months till you find a suitable tenant.

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The Right Plan: One must select a best option in terms of convenience cost out of all payment option available in the market such as flexi-payment plan, construction-linked plan, possession-linked plan and down-payment plan. For example, the price in subvention schemes is at least 10% higher than the charges under regular schemes. People should also recognize that any delay in payment or non-payment issue from builder in such schemes can affect their credit records. In guaranteed rental schemes the developer either pays rent for a fixed period during construction or for a certain period after possession. According to the first plan, the buyer receives regular payments from the developer during the construction, which helps him make up for a part of EMI or rent costs. In the second scheme, usually for properties outside the city limits, the developer provides rental income after the possession. But there is no guarantee.

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Size of the Apartment: Generally the area mentioned in brochures includes common areas such as lobby, staircase, etc. The actual area or the carpet area the property could be 30% less than the super built-up area. Make sure to check on built-uparea and carpet area of the property. The soil and topography are next concerns.

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Check the Infrastructure Plans: Metro connectivity or any other major infrastructure expansion in near future linked to the location of the property. This can really boost the return on investment terrifically. Also, ensure that the property is not close to any factory causing major pollution hazards.

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Check the Site: Usually the layout in brochure vary from the actual layout. So, it is suggested to do a thorough site visit before buying the property. If possible, it is always better to communicate with the neighborhood, which will help to know the location better.

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Register your Plot: Once you finalize the property, you must register it with the concerned authority to become its ,legal owner.

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