Below is the step-by-step procedure to purchase resale flat”
- Collect the Property Documents
- Document verification
- Sale Agreement
- Sale Agreement franking
- Home loan
- TDS obligation
- POA from Buyer/seller
- Registration of Sale Deed
- MODT
- Khata transfer
- Name change in property tax receipt and utility bill
Let me explain in brief:
1. Collect the documents
As soon as you finalize a property based on your requirements and growth aspects, it is prudent on buyer’s part to collect the following documents from seller for verification.
- Mother Deed
- Sale Deed
- Encumbrance certificate
- Tax Paid receipt
- Khata certificate & Extract
- Occupation Certificate
- Aadhar & PAN
2. Document Verification:
Verify above-listed documents from a real estate lawyer. This is to ascertain the legal ownership of the property, tax liabilities with the property and to ensure that it is complying with the various regulations.
3. Sale Agreement:
Property Sale Agreement is probably the most important document in the whole chain because even sale deed is executed based on terms covered under sale agreement as well as is legally binding. Sale agreement covers various aspects of the sale such as Indemnity Clauses, agreed cost, advance paid, Penalty clause, Right to call-off the deal, the procedure to be followed in case of default by either party, losses or obligations to be covered by buyer or seller etc. In case the agreement is not well drafted, it may allow one of the parties to breach the agreement and still get away with it.
Since even sale deed is executed based on terms & conditions agreed upon in the sale agreement; hence it is all the more important to have an expert drafted and thoroughly vetted sale agreement.
Seller and buyer sign all the pages of sale agreement. Two witnesses signs at last page of sale agreement.
4. Sale Agreement Adjudication:
If you are opting home loan to finance your property purchase, stamp duty for Sale Agreement is 0.5% of buying price or guidance value, whichever is higher.
(Guidance value is the minimum amount for which a property can be registered hence property would not be registered lower than the guidance value fixed by department of stamp & registration of your locality.)
In a separate answer, we wrote the detailed procedure to adjudicate the sale agreement. Here is the link https://www.pgnpropertymanagement.in/what-are-the-franking-charges-for-a-sale-agreement-in-bangalore/
5. Home Loan:
Home loan process can be triggered with the bank. The first step in securing a home loan is to get the loan sanctioned for which bank would need to look at the income proofs, property marketability and the credit score of the buyer including security or guarantor documents (some of this might be bank specific). The cheque or DD of the loan amount is issued in name of seller and once the property is registered original copies would be deposited with bank including registered sale deed.
6. TDS:
The buyer is required to deduct the TDS of mandatory 1% from the sale proceeds (except for agricultural lands) if the property transaction value is more than 50Lacs. The buyer has the responsibility of deducting as well as depositing the amount with govt. before sale deed registration proceeds. Thankfully, buyer need not have a TAN (Tax Deduction Account Number) to pay TDS. TDS needs to be deducted at the time of payment to the seller and not at the time of execution of sale deed registration.
7. POA from Buyer/seller:
Power of Attorney is used to vest authority in another person (known as Agent) to represent oneself (known as Principal) in legal or financial matters. A valid and registered POA can be used to execute registration of a property in a capacity as a buyer or even seller.
In a separate answer, we wrote the detailed procedure to execute POA, here is the link https://www.pgnpropertymanagement.in/what-is-the-procedure-for-giving-a-power-of-attorney-for-a-property-in-india/
8. Registration of Sale Deed:
The sale deed is an instrument in writing that transfers the ownership of the property. Registration of the property is the final step in the process as registration implies that the buyer (in whose name property is registered) is the lawful owner of the property with all rights, obligations, and duties towards the same. The objective of registration is to prevent fraud and dispute at the same time maintaining public records for the same. The immovable property can be registered at sub-registrar’s office within whose jurisdiction the property falls.
The stamp duty payable on sale deed registration is determined from a number of factors and is governed by State Government through Registrar Office. The stamp duty is levied on the value of buying price or guidance value, whichever is higher.
Below is the total government charge for resale property registration (subject to Bangalore)
- Stamp Duty & Surcharge: 5.1% of buying price or guidance value, whichever is higher
- Registration: 1% of buying price or guidance value, whichever is higher
- Cess : 0.5% of buying price or guidance value, whichever is higher
- Scanning: Rs. 35 per page
Please note that 0.5% stamp duty paid for sale agreement is denoted at the time of registration of sale deed, provided you select denotation of stamp duty and upload sale agreement in Kaveri Online Service
Documents required to submit an application on Kaveri Online Service for Sale Deed registration:
- Parent Deed
- Seller’s sale deed
- Encumbrance Certificate
- Tax paid receipt (Current financial year)
- eKhata
- Occupation certificate
- Sale Agreement
- Sale Deed draft (to be registered)
- TDS Challan
- Aadhar and PAN (Seller & Buyer)
- Active mobile phone for OTP Authentication
- Two Witnesses’ Aadhaar
9. MODT:
MODT or Memorandum for deposit of title deed is applicable for all home loan borrowers. It is essentially an undertaking given by you that you are depositing the title documents of the property with the bank at your own free will in return for a loan. For some banks, apart from the loan agreement, the undertaking needs to be registered and the government levies a stamp duty towards registration charges. Stamp duty charges vary from one state to the other.
10. Khata Transfer:
Khata transfer is required when the ownership of property is transferred from one person to another.
Khata has all the property details, such as the owner’s details, property size, location, carpet area, built-up area, tax assessment, and property identification number.
11. Name change in property tax record:
After the sale deed registration, it’s important to change the name in property tax and utility bill. In order to do so you need photo copy of title documents, hence before you hand over the tile documents to bank, take the scan copy of mother deed, sale deed and seller’s khata.
In Bangalore, we provide end-to-end assistance for purchasing resale flat. To opt for our service, please write to us pgnproperties@gmail.com or Whatsapp to + 9 1 – 9 7 4 2 4 7 9 0 2 0.
Thank you for reading…