Does the importance of the documents end with the registration of the property? The answer to this is no. You must keep the various documents of the property safe along with 2-3 sets of its photocopy. In cases wherein you have purchased the house by availing a bank loan, it is important to ensure that you take a few photocopies of the documents before you hand them over. The digitalization of the document is also recommended.
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What documents to keep after you buy or sell a house?
Some of the most important documents that you may need to keep after the purchase of the property are listed below:
Buyer’s agent agreement:
When you hire a real estate agent, the buyer and the agent get into an agreement called the buyer agency agreement. This document states that you have entered into a contract with the agent and has given him the authority to represent you in the purchase of the property. The law governing the buyer-agent relationship is the law of agency as stated under section 182 of the Indian Contract Act. The agreement is laid down the various terms of the relationship such as the payment to be given to the agent, the time duration for which the agreement shall stand valid and even terms such as the grounds for terminating the agreement.
This document is binding on the agent and it provides you a legal backing when the agent fails to perform by the terms of the contract. An agent who fails to perform the mandates of the principal can be charged with legal liabilities for his failure to fulfill the terms of the agreement.
Legally defined, a purchase agreement can be defined as a legally binding document that can list the various conditions of a particular transaction. Any failure on the part of either of the parties, the other party automatically acquires the right to terminate the contract as null and void. Every real estate transaction begins with the purchase agreement which is signed by both the seller and the buyer.
This agreement is proof that the parties have agreed on certain terms such as the purchase price, closing date, and other terms. The main reason to maintain and keep the document safe arises from the fact that if there is any default on the part of either of the parties there can be legal ramifications.
The seller is required by the law to disclose all the relevant facts concerning the property. According to Section 55 of The Transfer of the Property Act, 1882, the seller is bound by law to disclose both the past and the present problems relating to the house that he is aware of. He owes a duty to disclose any information on the property that could degrade the value of the property in the market.
Some of the common disclosures that a seller of the house is expected to make include lead-based paint, pest infestations, and renovations that were done without a permit. He is also expected to formally inform the buyer about any construction works carried out in the property that falls beyond the approved plan. The importance to preserve this document arises in circumstances wherein you realize that a material fact about the property, that can affect the use of the property, has not been disclosed to you. This document can aid your lawsuit in such circumstances.
Home inspection report:
Before making the purchase, the buyer of the property is expected to do due diligence inspection on the property that he or she is about to occupy. Due diligence is performed by professionals such as lawyers and real estate agents, that verify the property documents and also value the property after considering factors such as locality and the rate in which the homes in the neighborhood have been sold. The lawyers also prepare a title report in which a document is showing the past ownership of the property.
Generally, after conducting the home inspection, the person doing so is required to provide a report showing the various findings regarding the condition of the property, and the potential problems relating to the same. It is important to keep the document as it is a document that shows the detailed list of findings of the inspector. It is important when a circumstance arises in the future to show the records of the repair works carried out by the buyer on the property.
The title insurance is a document that offers protection to the buyer in cases of any title disputed or competent claims on the property. As a part of this, the insurer conducts the due diligence to verify the identity of the previous owners and also the checks for any fraudulent signature in the public records of the property. The insurer also searches if there is any lien pending on the property. You will be required to keep the documents as they will act as evidence if a situation arises wherein the previous owners are claiming the property.
The purchase deed is also called as the sales deed and is a supreme document that establishes your ownership in the property. The law under section 17 of the Indian Registration Act of 1908, states that the sale of any immovable property for an amount higher than Rs. 100 needs to be registered. The registration works are to be carried out by making an application to the sub registrar’s office in whose jurisdiction the property is situated.
This also implies that all the sales deed needs to be registered as in the present scenario no property is sold for a price below Rs. 100. It is always important to keep the original sales deed and in cases wherein the property is to be pledged, the buyer has to keep a minimum of two copies of the document. When there arises a situation wherein the title of the property is disputed, the sales deed or the purchase deed and its authenticity is the most conclusive evidence to establish title in the property.
Documents like the encumbrance certificate, tax bills, occupancy certificate, building approval plan, etc. are important documents that are required for the sale of the property. You are also required to keep the Addenda and Amendments. These are documents that are used whereby changes are to be made to the original deed. Thus summing up, it is to be stated that the requirement of the property does not end with the registration of the property. The property needs to be kept even after the registration to curb any unforeseeable situation that may arise and for the resale of the property in the future.