Property Legal Due Diligence Checklist

Everything else on a checklist is secondary to those three. If any one of them fails, no discount makes the deal worth doing.

What do you need to check before buying property in India?

Why is a bank’s legal opinion not enough?

Because it protects the bank, not you. The lender’s advocate checks that the title is good enough to secure the loan amount.

Their risk is capped at the loan. Yours is the full price plus stamp duty plus everything you spend on the place afterwards.

A builder advertising approval by a large bank is telling you the bank was willing to lend. It is not telling you the title is clean. Instruct your own advocate.

What does an encumbrance certificate actually show?

It shows registered transactions on the property for the period you ask for. Sales, mortgages and gifts all appear on it.

Ask for a long period, not the minimum. Thirteen years is common practice and thirty years is better where the title chain is complicated.

Understand its limit. It only shows what was registered. An unwritten family arrangement will not appear on it. Nor will a court case. That is why the litigation search is a separate line in the table.

What are the tax and payment steps buyers get wrong?

Tax deducted at source on the purchase. Under section 194-IA, a buyer deducts 1% on the sale of immovable property where the consideration reaches ₹50,00,000. The buyer deducts and deposits it, not the seller.

Miss it and the liability, interest and penalty sit with you. Check the rate and threshold against our TDS rates chart before you release payment.

Then stamp duty, which is set by your state and varies widely. Estimate it early with our stamp duty calculator, because it is usually the largest single cost after the price itself.

What is different when buying an under-construction flat?

You are buying a promise, so the checks shift to the promise-maker. Verify the RERA registration number on your state authority’s website, not on the builder’s brochure.

Read the agreement for sale clause by clause, especially the delivery date, the penalty for delay and the definition of carpet area. Compare the penalty the builder pays for delay against the interest you pay for a late instalment. If those two numbers are wildly different, that tells you who wrote the contract.

For land purchases, the checks are different again. See our page on plot and construction loans.

What should you do after registration?

Get mutation done. Registration transfers ownership; mutation updates the municipal record so that property tax and utilities come to your name.

Then check that the property tax record shows you as owner and that there are no arrears carried forward. Our property tax by city page covers the local process.

Keep the originals safe. If you took a loan, the lender holds them, so collect and check every original document when you close the loan. See home loans for the wider borrowing picture.

Common questions

What is an encumbrance certificate and why do I need one?

It is a statement from the sub-registrar. It lists registered transactions on the property for a stated period, including mortgages and sales. You need it to confirm the seller has not already pledged the property. Ask for a long period. Read it alongside a court search, because unregistered disputes do not show up on it.

How many years of title documents should I check?

Thirty years is the safe answer where the chain has passed through inheritance, partition or gift. Thirteen years is common for straightforward resale. Your advocate should trace it back to a document that establishes clear original ownership, known as the mother deed, and follow every transfer since.

Is TDS applicable when buying a house?

Yes. Section 194-IA requires the buyer to deduct 1% tax at source on the sale of immovable property where the consideration reaches ₹50,00,000. You deduct it from the payment and deposit it against the seller’s PAN. This is a buyer obligation, and failing it leaves the buyer liable.

Can I buy a property without an occupancy certificate?

You can, but you should not. Without it, the building is not certified fit for occupation, utilities can be irregular, and resale becomes hard. Municipal action against the building remains possible. Treat a missing occupancy certificate as a reason to walk away rather than a point to negotiate on.

Do I need a lawyer if the bank has already approved the property?

Yes. The bank’s advocate acts for the bank and its exposure is limited to the loan. You are risking the whole purchase price plus stamp duty and registration. An independent title search costs a small fraction of that and is the cheapest insurance in the transaction.