3 Things You Must Check Before Buying Plot in India

3 Things You Must Check Before Buying Plot in India 

“Buy land, they’re not making it anymore,” these golden words by Mark Twain still holds true with property values inching to a new high every year.

Since time immemorial, the land is an integral part of the investment portfolio of a typical Indian investor. After all, it is an appreciating asset that also gives one a sense of ownership.

Before the Real Estate (Regulation and Development) Act, 2016 came into existence, rampant plot dealings were very common in Indian cities. With stringent norms in place, the things have now changed for good. Having said that, it is always advisable to be cautious while buying a plot of land in India.

For your investment to be sound, we have created a step-by-step guide for you.

Step 1: The documentation

The tedious paperwork might sound like a nightmare but is it a necessity. Here’s a list of documents that you must ask the seller.

Title deed: This document ensures that the seller has undisputed legal ownership of the land. Do not accept a photocopy of the deed. Once you receive the original title deed, scrutinise it. The land must be in the name of the seller. Next, check whether the seller has full rights to sell the land and that he is the sole owner of it. You can check these by running a ‘title search’ on the registration website of the state government. You can always consult your lawyer to be sure.

As a smart buyer, you should also ask for previous title deeds of the land, if any.

Encumbrance certificate: The next document on our list is Encumbrance Certificate or EC. 

This document is essential to figure out if the plot is free from legal dispute. You can get it from the sub-registrar’s office where the Sale Deed of the land has been registered. You can take EC for the last 13 or 30 years.

If you are buying a plot of land in Karnataka, you can check the EC online on https://kaverionline.karnataka.gov.in/

Release certificate: Another one to add to your roster is the Release Certificate. This is only valid while buying a resale property. This is to ensure that the seller has cleared all the loans (if any) on the property. The bank issues release certificate, which also comes in handy in case of pledged land.

Original land deed: Also known as the 7/12 document (7/12 extract in Maharashtra and Gujarat and 7/12 Uttara in Karnataka), you must ask for the original land deed of the present owner and all the previous owners. 

Tax receipts and bills: Unless you want to be on the wrong side of the tax man, make sure to collect the original bills and tax receipts from the seller. 

NA order: Did you know that all the land in India is agriculture land unless designated for some other purpose by the government? Interesting, right? Thus, for carrying out any real estate activity, one has to first convert the land to non-agricultural land (NA). Now, there are various types of NA that you must know of. These include:

•    NA – Residential

•    NA – Commercial

•    NA – Warehouses

•    NA – Resort

•    NA – IT/ITeS

Thus, ask for a copy of NA – Residential order from the seller.

Local approvals: Lastly, ensure that the plot of land has all the requisite approvals in place.

If the owner is an NRI: If the owner of the land is an NRI, then also ask for a Power of Attorney (POA) from the seller.

Step 2: The ground-work

After the paperwork, it’s the time to check the ground realities.

Measure the land: Yes. The first step is to check the dimensions of the plot. You can also get a surveyor to do this.

Check the FSI: The Floor Space Index (FSI) of the land determines the extent of construction on a piece of land. For instance, if you have a plot sized 2,000 sq. ft. with an FSI of 100%, then you can build a house on 2,000 sq. ft. If the FSI for the same plot is 50%, then you can only construct on 1,000 sq. ft. of land.

Appreciation potential: Do your research and invest in a plot that will offer good returns in the times to come. If you are confident, you can also go with the stock market approach of picking an undervalued stock (plot) and waiting for it to appreciate. 

Step 3: The actual process

After Step 1 and Step 2, you need to arrange documents that you, as a buyer, should have for registration. These include:

Sale Agreement: As in the case of any property, the first step is to draft an sale agreement between both the parties involved. Your agreement should cover the following:

•    Particulars of the land

•    Agreed cost of the land between seller and buyer

•    The advance amount given by the buyer

•    The period in which the actual sale should take place

•    Cancellation claus

Title Deed: The next step is to get the Title Deed written by government licensed document writer.

Receipt from payment of stamp duty.

With the documents mentioned above, you can register the land in the sub-registrar’s office. During registration, for land priced over Rs 5 Lakh, the seller must submit either his Pan Card or Form Number 16 during registration. You will also need two witnesses for the registration of the land. 

Once your land is registered, the next step is to get the approval for your house plan. This is only valid if you wish to construct immediately. You will need the help of architect here for designing the building plan.

The registration charges

During registration, you need to pay stamp duty charges, registration fees, and document writer’s fees.

Keeping the above factors in mind will ensure that your investment will turn out to be a logical income-earning decision. If you still have doubts, you can always tell us in the comments!

37 Comments

    1. सर ।मुझे एक जानकारी चहिये। जिले/महानगर के अंदर किस जगह किस area के land/plots खरीदने के लिए उस plot का उस जिले के develolpment अथॉरिटी या rera से approved होना चाहिए?????? और कौन से जगह की plot को जिला पंचायत से approved होना अनिवार्य है

  1. I have identified a property to buy, bt the seller says that only finance banks will approve the loan. What might be the reason. I doubt the plot is not NA – residential. Can i build house on non residential plots as well?

    1. Hello Rupali, you can not build a house on a non-residential plot. We advice you to get the property papers checked by a lawyer.

  2. Thanks a lot for sharing this! I was planning to buy a property in Bengaluru . I had already decided to hire a lawyer for taking care of all paperwork . Is it ok to hire one from NoBroker? Or do you have any recommendations?

  3. Thanks for sharing this post, this is really helpful.

    I have identified a property and this property was allotted by government and a Buyer(1st Party) bought it and after sometime it was sold by him to another Buyer(2nd Party). Now, i am buying the property as i will be 3rd party, i am buying the property via a loan.

    1st party is saying that he do not have the title deed document but Bank is asking for the document, how should i proceed ? please advise.

  4. Excellent information,as iam planing to purchase an housing plot ,i do have lot of doubt in proces of purchase..But,your artical gave me full of confidence to go forward with out any hesitation…
    Thank you very much Madam Nikunj Joshi…

  5. Dear Nikunj. Am looking at purchasing a plot in a gated community in a neighbouring district of Bangalore called Chikkaballapur. While am still negotiating on the price, can you help me understand what approvals should the property have?

  6. We have identified a NA plot from a seller. He is a first party and he has purchased this plot 34 years ago and has original papers. Lawyer says online registration does not show data if he has sold the property more than 10 years ago. Is that true? Will we come to know during registration that he has sold to someone else? Please advise

  7. Thank you very much for the information. I’m planning to buy a property. The information provided in your article is concise, to the point, easily understandable without any complicated vocabulary and very important for a person investing his hard earned money. Thanks a lot.

  8. Thank You Nikunj for the information. We are about to finish a deal to buy a plot. They do not have the title deed, except for title deed they have MUDA allotment letter, Khata and sale deed available. They are promising us that they will get the title deed done before registeration. is it good to go ahead and pay them the advance money?

    Thanks in advance

    1. Hello Darshan,

      If possible, try to get the Title Deed. If you think that the builder is reliable, then (may be) you can go ahead!

  9. We bought plot 10years ago now I want to construct house there but some body saying that it is under ftl(full tank level) how can I know about it. What can I do please suggest me.

  10. I am trying to purchase a plot but property dealer tell me to booked first the plot and then registration but problem is property dealer not done plotting and how will i now where is my plot so what to do sir

  11. Can I buy a land based on advance paper i.e the actual owner sold to 1 st person and the 1 st person re selling to 2 Nd person with some profit with out registration and here iam 2 Nd person and if I want to write an advance paper whom should I write name in bond advance paper.so please tell me

  12. Sir, I bought the plot from a property dealer in hudkeshwar nagpur which is not NA sanctioned. Also he sold the public utility space to other customers. I want to know that after selling public utility place, NA can be done..?? If NA is not sanction, will it be possible to do final registry.. He is only doing agreement to sale with other customers who paid full amount.. Plz help me ..

    1. Hello Barbie Sahare,

      Please contact a legal expert to figure this out. An expert might be able to help you after reading the clauses mentioned in your initial agreement.

    2. Hello Barbie Sahare,

      Please contact a legal expert to figure this out. An expert might be able to help you after reading the clauses mentioned in your initial agreement.

  13. Hello madam
    The article is really very informative.
    As I am planning to buy a plot in a 200acres venture where in still some land in process of getting LP no in which I am supposed to buy. They are saying approval will come within a month and for booking advance to be paid and in course of time for sale agreement50%
    Of cost of the plot to be paid. Is it advisable to take plot in the venture. Please suggest
    Thank you

    1. Hello G Suneetha,

      Please ensure that the developer has all the approvals in place. If a particular approval is due to come in a month’s time, I suggest you wait for it rather than investing right away.

  14. Hi,

    We are planning to buy a land. The land has the sale deeds only from 1991. The person who sold the land in 1991 received it as a gift from his owner long ago with no documentation. How can we proceed in this case? Since1991 all the documents are clear.

    Regards,
    Lakshmi.

    1. Hello Lakshmi,

      Considering the owner has all the documents since 1991, you can proceed. Having said that, do get the documents verified by a property lawyer before signing the deal.
      Regards.

  15. I am purchasing a plot but its 2000sqft n seller sell me 900 sqft plot can i purchSe n rest of plot he sell a other 1 person so is it possible 2 maps are session on 1 plot for the make house can be purchase it

  16. It is a great blog post.I am always read your blog helpful and informative tips. I like it thanks for sharing this information with us

  17. Thank for sharing this wonderful article. I gained lots of knowledge in this article. Keep on sharing this article and keep motivating. I was searching for this kind of information for a long time. Fortunately, I got this article.

  18. Very informative article. I am looking to buy a plot in Lucknow. That’s why I wanted to know what documents are required from the seller.

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