Buying property is a lifetime decision.
Since you are going to invest your precious money in the property,
you have to be extra careful. The real ordeal begins after
you identify the property of your choice. The road to a possession
certificate is paved with difficulties, tedious legalities
and endless paperwork. As a buyer, the more aware you are
aware of the legalities and paperwork involved, the more likely
it is that you won’t end up as another casualty in the
courts. So, familiarise yourself with terms such as leasehold,
freehold, title deeds, completion/occupation/possession certificates.
As long as you make sure that all the documentation is in
place before you strike the deal, you’ll be home free!
Property Under Construction -
If you are buying a new property, ask for an Allotment Letter
or Development Agreement detailing the agreed price, payment
and construction schedule, house plans, delivery date and
builder’s liability in case of late completion or problems
after possession. Make sure that the developer has clear title
to the land, and that the relevant local authorities have
approved the building plans. Once the construction is over,
ask for the completion and occupation certificates, which
indicate that the building has adhered to municipal requirements.
Some other costs you will incur: Society formation charge,
deposit for electricity meter, stamp duty and registration
charges
.
Constructed property -
Make sure that the seller has the title and possession of
the property as well as the right to transfer the property.
Check that the relevant approvals, if any, have been obtained
from the land development/planning authority. Ensure that
there are no tenants and get a declaration that the property
was purchased from the seller’s funds and is not mortgaged.
Get a ‘No Objection Certificate’ from the builder
or society. Check whether dues such as property tax, society,
water and electricity bills, etc. have been paid in full.
Decide who will pay society transfer charges. Take possession
of all relevant documents and also the original allotment
letter, completion certificate, occupation certificate and
all other documents given by the original builder.
Leasehold vs. Freehold -
Most of the property in Pakistan is freehold, which means
that ownership is transferable. In some specific areas such
as Delhi, the government owns most of the land, some of which
is leased out. This lease is transferable, provided permission
is sought directly from the Central Government. In this case,
you have to pay stamp duty and execute a memorandum of transfer.
In the case of leasehold property, make sure that the ground
rent has been settled up to date. Most transactions are done
through Power of Attorney (POA), which does not confer a clear
title to the buyer and it also ceases on the death of the
seller. If you are entering into such a transaction, ensure
that you have a general as well as special, irrevocable POA,
which will allow you to transfer the property. However, buying
properties involved in multiple POAs is fraught with difficulties.
For more information please contact
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