A Guide to Buying Land in India

Purchasing land in India is a lot more than a simple exchange of cash and property. It is an elaborate process that requires great attention to detail and caution to avoid legal troubles and unexpected expenditures. Corruption and fraud are not new to the real estate market.

Here we will be covering details on what you need to know and do before buying your plot so that it can be a smooth, hassle-free journey for you.

Checklist to Avoid Real Estate Fraud & Mishaps

Identity of the Seller

This is to answer the most basic question – does the person selling the property to you actually own the property? It is important to check the documents regarding the seller’s identity and their legal right to own and sell the property. If the property is under joint ownership, this should be done for all members.

Legal Documents

The seller’s possession and authenticity of all the following documents in association with the land must be ensured:

1. Title/Deed: This document proves the clear ownership and rights to the property. It is advised to get the original copy checked by a legal expert and also to check ownerships that the land has had in the past decade or so.
2. Encumbrance Certificate: This can be acquired from the sub-registrar’s office where the deed is registered to find out about any legal complications or unpaid dues connected to the property.
3. Tax Bills & Receipts: You must ask for the original copies of the tax receipts for the past months and ensure that the payments have been cleared on time.
4. Release Certificate: It is obtained from the bank when the complete repayment of the loan acquired for the property is done.
5. NA Order: In India, all lands are classified as agricultural land. To use a property for any non-agricultural purpose, an NA order is required. Ensure that the land can be legally used for your purpose.
6. Floor Space Index (FSI): There is a specific amount of area in a property within which construction is allowed. You must check the FSI of the property you are buying so that you are indeed able to build a structure of your requirement in it. If the FSI for a plot of 1000 sq. ft is 2.5, you can build up to 2500 sq. ft.

Approvals

1. Converting the property from agricultural to non-agricultural use is important. Ensure that the property can be used following the zoning plans of the city. 
2. Building and layout plans and amenities like water, electricity, sewage treatment etc. must be checked for approval by the authorities.

Verifications

1. It is always best to get the property measured by a surveyor to see if the documentations are accurate.
2. Verify the documents in person, ideally with the help of a legal expert.
3. Ensure that there is adequate availability of water and electricity in the area.
4. Check if the area is prone to flooding, considering the recent trend of floods in different parts of the country.

Connectivity & Maintenance

1. Ensure existing and proposed means of access to the property and facilities available in the neighbourhood to understand the current and future value of the property.
2. Know the maintenance charges that come with the property beforehand so that it does not become a sudden burden later.

General Information Regarding Land in India

There are 3 classifications of land in India: Agricultural, Residential and Commercial.

If you want to use previously agricultural land for residential or commercial use, a conversion certificate from the authorities is required.

While investing in commercial land, carefully consider the FSI to know the scope of development. It is also important to study the local zoning laws of the city to ensure that the commercial structure you are planning is possible in the plot you are going to buy. Taxes are generally higher for this type of land. 

Institutional Plots: properties set aside to build schools, colleges etc., are authorised by the local government authority and permit their sale or transfer as per norms.

Industrial Plots require special permission for their acquisition.

Land in India is divided into colour-coded zones to indicate their specific use:

• Red: Land meant for Schools, hospitals, places of worship and other social infrastructure. These plots cannot be developed into high-rises.
• Green: Land for open and green spaces. They can be used for agricultural and horticultural practices.
• Yellow: Land for mixed-development. Lighter yellow shows the land that can only be used for residential purposes. Darker yellow indicates commercial development only.
• Blue: Commercial and retail spaces. Lighter shade for offices and business centres, and a darker shade for retail and hospitality spaces.
• Grey: Land for the development of heavy industries and manufacturing facilities. 
• Purple/Violet: Factory establishments and general industries.

In Summary

One can never be too careful when it comes to purchasing properties. Along with thoroughness and proper authentication of documents, it is always best to have the advice of real estate developers and lawyers. 

Never go about buying a property in a rush. Take time and make sure you pay attention to every detail at every stage of the process, from deciding which plot to buy to changing the deed to your name.

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