What are the legal steps to own land in India safely

Purchasing a plot of land in India is all about documentation. The plot may look perfect to own, may have well-defined boundaries, and may even cost less than you were prepared to spend. But in the background, there may be a long-forgotten mortgage, some other heir or co-owner claiming shares in the property, or a land-use restriction that will prevent you from carrying out the building plans you have made for the property.

You might not know about these defects even after a physical site visit. It may take years and hundreds of thousands of rupees to resolve these defects.

A safe transfer of land in India can be structured in three stages of legal requirements: (1) checking a property and the seller before you commit yourself to a purchase, (2) execution of sale documents and payment of necessary stamp duties and registration fees, and (3) recording of the sale in relevant government records after registration.

Many states have implemented their own version of the Indian Stamp Act, 1899, as well as their own revenue laws applicable to property. The Real Estate (Regulation and Development) Act, 2016, also applies to eligible plotted developments, subject to the applicable registration requirements and exemptions. Buyers should verify the relevant state RERA rules and project registration where required. It is therefore advisable to seek the views of a local property lawyer who can provide guidance as to the specific property laws applicable in a particular state.

Phase 1: Check the property before paying

The most important property checks take place in this phase. It identifies the owner of the land, ascertains whether anyone else has any claim to it, identifies any outstanding debts or other restrictions affecting the land, and checks whether it can be put to the intended use.

Get your own property lawyer

This should be one of the first things you do.

Independent lawyers should preferably be paid a fixed fee to advise you, carry out searches and report to you on the documents.

Do not rely on the legal team of the developer or seller. Get your own property lawyer to give you a written title opinion prior to paying a booking amount or other substantial sum.

Check the title and ownership history

A title search is conducted to find out who owns a piece of land and how that person came to own it.

The lawyer will typically trace the title back over 30-50 years, depending on the property and the quantity and quality of the documents. The first document may be referred to as the mother deed. Thereafter, there may be a number of sale deeds, gift deeds, partition deeds and wills.

The lawyer has to establish how the property came into the hands of the seller, for example, if the previous owner died and there were several heirs.

Request the original documents for the title search and verify the seller’s right to sell the land.

Get an Encumbrance Certificate

An Encumbrance Certificate (EC) is a document that lists all the registered transactions (e.g., mortgages, etc.) that have occurred on a particular property within a time frame.

The EC can generally be obtained from the Sub-Registrar’s Office where the property is located. Many states have also introduced online application facilities to obtain an EC.

You need to ask your lawyer how far back a search would need to go - 13 years or 30 years or somewhere in between. It depends on the title history.

A clean EC is fine but does not confirm that everything is alright with a property. There could be unregistered agreements or even certain court cases that do not show up in an EC. Your lawyer should review the EC alongside the title search and litigation checks, rather than relying on it alone.

Compare the land and revenue records

It is also known by different names in different states, like Record of Rights, Khata, Patta, RTC, 7/12 extract, Jamabandi, etc.

Typically, a revenue record contains information such as the name of the owner, survey/Khasra number, area, class, details of cultivation and tax paid by the owner.

A fresh copy of the document must be obtained from the concerned government office or the state portal, and not a copy that has been printed by the seller.

Verify the information contained in the above revenue records against the details mentioned in the title deed. There could be a slight difference in the name, survey number, area, etc. Clarify the same with your lawyer before proceeding further.

Look for disputes, acquisition and restrictions

A title deed alone will not reveal all the information about a property.

Your lawyer will search civil courts, High Courts and other tribunals for any previous cases regarding the property, its sellers and previous owners. In some cases, a public notice will have been placed in the local newspaper inviting any interested parties to object or make a claim.

It is also important to check whether the government has proposed or even notified the acquisition of land or property.

Additionally, there might be other restrictions in place, e.g., by reason of environmental regulations affecting coastal areas, forests and water bodies and the like, and restrictions as to usage.

Confirm land use and zoning

Check the local master plan or zoning map before you buy a piece of land.

Agricultural land cannot be treated as residential land for development without the required land-use conversion and approvals. To build on agricultural land for residential use, the required land-use conversion or approval must be obtained under the applicable state laws.

Please check whether the agricultural conversion order refers to the correct plot and whether it states the permitted use. You should also find out about the approved plan and the relevant building regulations that apply to the property.

Subsequently, if the land is incorrectly zoned, obtaining the required approvals may be impossible.

HOABL's project documents page provides approvals and legal references for selected developments and can give buyers an idea of the type of documentation they should expect.

Visit the property and get it surveyed

Purchasing a property based only on documents and photographs is not advisable.

Travel to the location and get the area measured by a licensed surveyor. Verify the surveyor’s measurements against the details in the title documents and the Revenue Department map to check for any discrepancies.

The survey will also identify the access road to the property as well as other structures within the property boundaries that may be encroaching on the plot.

Make sure that the plot has good boundaries and that a neighbour’s wall, fence or structure has not encroached onto the plot. A plot without legal access can be difficult or impossible to use as intended.

Check the true measurements before agreeing to buy, at which time you may attempt to negotiate a lower price or withdraw from the proposed purchase. Keep a copy of the surveyor’s report with your other property documents.

Phase 2: Prepare the sale and complete registration

After your lawyer completes the initial verification of the property, the transaction then proceeds to the documentation stage.

Prepare the Agreement to Sell

An Agreement to Sell (ATS) sets out the terms and conditions agreed between the seller and the buyer. It is not a document that transfers ownership of a property.

The Agreement to Sell (ATS) to be entered into by the parties must clearly set out the terms and conditions of the parties, particularly, inter alia, the property to be transferred, its survey number, boundaries, the consideration and mode of payment thereof, date of possession, etc., and the terms and conditions to be fulfilled prior to the completion of the sale.

This could, for instance, include a condition which states that until a certain document is provided by the seller (e.g., a missing document or NA conversion order), the buyer is not bound by the terms of the Agreement to Sell.

The provision for failure to complete by either party should be very clearly laid out.

Have your own lawyer prepare or review the Sale Agreement. Payments should be made through banking channels, and records of all transactions should be retained.

Pay stamp duty and registration charges

The amount of stamp duty varies from state to state and sometimes even varies based on the value of the property. In most states, the duty is calculated based on the higher of the circle rate/guidance value and the agreed sale consideration.

Check the applicable rate on the website of the Department of Registration of the state where the property is located to effect payment through the appropriate channel to obtain an e-stamp certificate and payment receipt.

Penalties or interest may apply if stamp duty is underpaid, and documentary evidence of payment will be needed in future years to prove payment of stamp duty.

Register the sale deed

Recording the sale is the final step in transferring property.

The Transfer of Property Act requires a registered deed for a sale of immovable property above Rs. 100. The buyer and seller (or their authorised agents) will have to visit the Sub-Registrar’s Office with all necessary documents.

The required documents may include stamp-duty payment proof, identity documents, photographs and witness details, depending on the applicable requirements.

After the sale deed has been registered, you need to collect the registered copy of the sale deed from the Sub-Registrar’s Office. You must keep the original registered copy safely and also maintain a digital copy of the registered sale deed separately.

An Agreement to Sell does not transfer ownership on its own.

Phase 3: Complete the records after registration

Work to do after the sale deed has been registered.

Apply for mutation

Mutation is the updating of the name of the buyer in the revenue records. The process is called Dakhil Kharij or mutation in some states, Khata transfer in a few states, or Patta transfer in certain states.

After registration of the sale deed, the sale is recorded in the register maintained by the Registrar, but the sale needs to be recorded in the records maintained by the Revenue Department as well. The application is to be filed with the Tehsil, Revenue or Municipal Office, as the case may be.

Keep the mutation order or acknowledgement safely.

Failure to update the revenue records can create future problems when paying land revenue, selling the property or applying for a mortgage.

Update tax and utility records

Also notify any local bodies to whom property tax or service charges (e.g., for water or electricity) are payable and update the records with your name.

Pay future taxes on time and keep the receipts as proof of payment.

It is also wise to verify whether any outstanding property tax and other local charges are left by the seller of the property. Such arrears and how they are dealt with by local authorities need to be clarified prior to completion of the transfer.

Special cases to keep in mind

NRI buyers

Normally, there is no requirement for NRIs/OCIs to obtain permission from the RBI to purchase residential and commercial properties in India. However, NRIs and OCIs generally cannot purchase agricultural land, plantation property or farmhouses in India, although acquisition by inheritance may be permitted under applicable rules. Confirm the position with a lawyer before proceeding.

An NRI can authorise another person to attend the registration on their behalf through a properly executed Power of Attorney. The document should cover the relevant property and transaction. The POA should be specifically created for the said property/transaction.

Our guide to virtual land buying consultations covers the process for remote buyers.

Agricultural and tribal land

State laws regulate the sale of agricultural land by determining who can purchase it.

The additional protection that Scheduled Tribes’ land in these areas gets comes from some states’ restrictions on non-agriculturists buying agricultural land. The land reforms laws of the state of Himachal Pradesh prohibit the sale of agricultural land to non-agriculturists.

Verify the laws applicable to the state where the property is located before paying.

RERA and state land portals

If you are buying a plot, then check if the project was registered under RERA and get the RERA registration number of the project and verify it on the website of the State Authority.

Land records are state-specific and are typically held on online portals such as AnyROR in Gujarat, the IGR website in Maharashtra, Kaveri and Bhoomi in Karnataka, UP Bhulekh and IGRSUP in Uttar Pradesh, and Dharani in Telangana.

Online records can provide useful information, but these should always be checked against the relevant official records by your lawyer.

For those interested in purchasing a plot of land in Ayodhya, our guide to buying land in Ayodhya safely provides a state-specific example of these checks.

Before you sign

To safely own a piece of land in India, follow these steps in the right order: have a lawyer look into the matter, check the title documents, check for any encumbrances and government records, see if there are any disputes going on, verify if the land can be used for the purpose intended, measure the land, draft a document for the transaction, pay applicable duties, register the sale deed with the relevant authority and get the mutation registered.

Don’t compromise on these checks because of the seller’s urgency.

If you are comparing developments, HOABL's projects page lists current options. The same checks should be applied to any project you consider.

Don’t rush to pay a large sum of money until you have had time to do what you feel is necessary.

FAQs

What documents should I check before buying land in India?

Before paying a large sum of money for a property, request the title deeds and other previous owners’ documents, an up-to-date Encumbrance Certificate, current revenue records such as the 7/12 extract or Khata (copy of ROR), NA conversion order (where applicable) and the approved layout plan. Have them checked by your lawyer.

Is registration of the sale deed mandatory?

Yes. As per the Transfer of Property Act, 1882, a sale of immovable property having a value of more than Rs. 100 requires a registered deed. An Agreement to Sell does not transfer ownership and is only a preliminary document.

How many years should an Encumbrance Certificate cover?

The length of time for a search can vary, and it is typically a set number of years (for example, a 13-year search or 30-year search). Your property lawyer will advise on the most appropriate search for your property.

Is mutation necessary after registration?

Yes. After registration, apply for mutation to update the revenue records. However, mutation does not by itself establish legal ownership; the registered sale deed and title documents remain important.

Do the legal steps vary from state to state?

Yes. Local laws pertaining to stamp duty, land records, mutation, etc., and restrictions applying to agricultural or tribal land can vary quite significantly. Advice should be taken from a local property lawyer.