While dealing with real estate property, it is necessary to conduct a title search. A title is an important document proving the ownership rights of a particular property.
A title search of a property is essential in order to prevent legal disputes after the sale of a property. It is generally done with the help of an advocate. The advocate will determine by going through the previous records of the property. So, it can be seen that a title search holds a major significance in the sale of a property.
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What is the difference between the title search and the title report?
A title search is a search of the property through all the records available to determine the true and correct owner of the property. The search confirms if the seller has the legal right to sell the property to another person. A title search reveals any problems that may be present on the property.
The title report is the outcome of the title search process. The report puts together all the information which is gathered during the title search in order to help the potential buyer make an informed choice of continuing with the property transaction. The report indicates whether the land is free from any encumbrance and if there is a mortgage that exists over the property.
Is there any way to obtain a property title without doing the title search?
A title document of a property can be used to prove ownership of the property. In the case of a legal dispute, the title document could be used as an authoritative record. In the absence of a title document, it is difficult to prove ownership of the property.
A property title may be obtained without conducting a title search over the property, however, doing so, would put the potential buyer under huge risk. It is always better to do a title search of the property before purchasing it, in order to find out the true owner of the property and to find out if there are any claims on the property. A title search can prevent unsuspecting new owners from accepting any liability which arises out of past issues. It shows the occurrence of past liability, like the existence of an outstanding lien or mortgage, or unpaid tax on the property.
How can I do a title search for my property and what are the various methods?
Title search reveals all information regarding the taxes, unresolved ownership claims, conditions, restrictions, etc. The following steps are followed while conducting a title verification of the property –
- A title search on the property is conducted by an advocate who will go through the previous records of the property. The property might have chains of title on it.
- The advocate has to see whether there is any encumbrance on the property.
- It is also necessary to find out the true owner of the property because only the true owner will have the right to sell the property. If there is more than one person as the owner of the property, it is necessary to determine the true owner.
- It is important to verify the documents of the property in the area where the property is registered. It is important to have a clear sequence of transfer of title from the first owner to the current owner of the property.
- The receipts of the tax paid on the property should be checked before the property is bought by the buyer
It is not necessary that the search should only be done by the advocate. A person can also do a survey of the title of the property himself by visiting the office of the registrar.
How to get a search report of property in India?
The search report of property is prepared by an advocate. The advocate, after visiting the registrar’s office and inspecting the documents of the property, may issue a title certificate. It is an important part of a housing loan process and helps in the approval of a loan. In order to avail a loan, the title of the property should be clear and marketable.
What are the documents required for the search report?
The following documents are required for a search report:
Agreement to sell –
It is the first document prepared in anticipation of the sale of the property. It contains a detailed description of the property and states the terms of conditions between the buyer and the seller, including the purchase price as agreed upon.
Absolute sale deed and title deed –
The sale deed or title deed is the most important document that records the actual transfer of ownership of the property. It needs to be registered at the sub registrar’s office under whose jurisdiction the property would fall.
Title search and report –
Property title search is a process of retrieving the chain of documents relating to the history of the property that has been registered with the concerned authority. It includes a description of the property and names of titleholders, joint tenancy, etc. It is especially important for procuring a home loan.
Khata certificate –
This document is known by different names in different states and it provides proof that the property has an entry in the local municipal records.
Receipt of property tax –
The receipts of property tax hold that the previous owner or occupier had paid all the taxes and none have been left as due. They also establish the legal status of the property and therefore serve as an important document of evidence.
Encumbrance certificate –
An encumbrance certificate states that the property is free from all encumbrances or loans. It is a key document for procuring a loan against property from banks. It has all the details about transactions relating to the property. (Read on: What is the Encumbrance Certificate And Why It Is Important? )
Occupancy certificate –
An occupancy certificate or completion certificate is given by the municipal corporation after the construction of a building to establish that it was constructed according to a sanctioned plan and that it is ready to be occupied.
Statement from the bank if loan outstanding –
If any loan is outstanding on the property that is being purchased, it is safe to procure the statements relating to the loan so that there is full disclosure in that regard.
Non-objection certificates –
It is important to ask the developer to produce copies of various NOCs that must be procured from various departments such as the Sewage Board, Pollution Board, Environment Department, Traffic and Coordination Department, etc. This forms the ‘intimation of disapproval’ for the construction of the building
Sanctioned building plan by statutory authority –
This is to ensure that the buyers are cautious about any deviations from the sanctioned plan made by the developer.
Power of Attorney/s, if any –
A Power of Attorney is required in the original if any person is acting on the authorization of the owner of the property. It could be general or specific.
It can be seen that a title search is an important factor while purchasing a real estate property. It provides for the authenticity of the parties that are involved in the transactions. A land title search report, helps in knowing about the status of the land, whether it has any encumbrance over it, such as the existence of any mortgage or any other claim which may exist on it. The report assures the buyer that the property being purchased by him is free from encumbrances and that he would not face any problems at a later stage due to any other pre-existing encumbrance.