Which Documents Should I Check Before Buying a Land Plot? A Buyer's Guide

For most plot buyers, the brochure or plan is the first thing they look at, while the legal documents are often the last. It is the reverse of how things should be. Documents about a plot of land purchased from a developer that appear to show problems with fraud, other claims to the land or an unauthorised plot layout will rarely be noticed on a site visit. These are the types of issues that need to be identified before a purchase and looked for in a set of documents. They should be read together, ideally with the assistance of a property lawyer. But first, it is also important to understand the role of the developer. The developer is often the seller of the plots, the designer of the layouts and roads, and also often responsible for providing the major utilities to the site. Thus, the documents of the developer are just as important as those relating to the land itself. This guide looks at the developer documents in six areas.

Legal Title and Ownership Documents

Start here because the seller must be able to prove they have the legal right to sell the land. The developer must have papers to prove how they got the land, not just that they do now.

Mother deed (parent deed): This would be the original document that first enabled the land to be transferred. Then ask for each transfer (sale, gift, etc.) subsequently executed down the line, including any splits or devolutions such as by way of inheritance, to be produced to your lawyer’s satisfaction to prove the link. Generally, a 30-year search is standard for most states, but your lawyer will advise on the period required for your specific project.

Registered sale deed in the developer’s name: Verify that the registered sale deed of the current owner contains details of the land in the proposal, including survey numbers and extent of land. A Development Agreement or Agreement to Sell in favour of the developer is not the same as ownership.

Power of Attorney, if used. Where someone has signed on behalf of the owner, it must be produced in its original registered form. It must relate to the sale of this land and must be current. A Power of Attorney generally ceases to operate upon the principal’s death or may be revoked by the principal, subject to applicable legal exceptions.

Verify that all parties transferred ownership of the land (e.g. spouses, parents and children, etc.). A recent sale deed for the land is not enough to establish that the seller’s title was clean; it only shows what recently transpired. The developer’s reluctance to supply prior documents is information you need about the project; it is not something you can dismiss as an inconvenience.

Encumbrance and Financial Liability Documents

Although the title appears clean, one can still have financial liabilities for the said land.

Encumbrance Certificate (EC). This certificate is issued by the Sub-Registrar’s Office and contains details of registered transactions such as mortgages and charges. The Certificate would be issued for a specific period, and it is wise to request a period that covers the entire title chain, say 30 years. However, an EC does not disclose any pending litigation or unregistered transactions, which would need to be searched in the court records by your lawyer.

Property tax receipts and No-Dues Certificates. The recipient must verify receipt of payment of all property taxes and obtain No-Dues Certificates from the local authority as well as from all utility providers where appropriate, since unpaid dues may affect the transaction or create liabilities for the buyer.

Loan or mortgage release certificates. These need to be obtained from the relevant financial institutions if the developer has had a loan against the land. These need to be produced as a No Objection Certificate (or equivalent release document) for the plots that the developer is selling. Again, this would show up in the EC if it were a registered mortgage.

Planning, Zoning and Regulatory Approvals

These documents confirm that land can be used for residential purposes and that the approved layout is authorised for constructing residential units.

Non-Agricultural (NA) or Change of Land Use order. For any land that is presently used for agriculture, insist on being furnished with the actual order(s) that have been issued for change of land use and verify that the survey numbers listed and conditions mentioned in the order(s) have been fully and satisfactorily met.

Master plan zoning and land-use extract. These would confirm that the land is in a zoning category that permits residential use. A plot in a green belt or reserved category may be non-buildable even if the brochure says so.

Approved layout plan. This would have been sanctioned by the Planning Authority (DTCP/HMDA/BDA, etc.). A copy of the same needs to be cross-checked against the plot number, land area, and road widths as depicted in the marketer’s project plan and the approved plan.

No Objection Certificates (NOCs). There are NOCs that are required from departments like the environment, fire, electricity, water, and municipal departments, etc. Find out which NOCs are required for a particular project and get copies of the same, as a lack of these clearances will affect construction or connections to utilities.

Developer-Specific Documents and RERA Compliance

This section is about whether the seller is who they claim to be, and whether the project is on the regulator's record.

RERA registration certificate. Under RERA, projects generally require registration if the land proposed to be developed exceeds 500 sq. metres or the number of apartments exceeds eight, subject to applicable exemptions and state-specific rules. Check the state RERA website for the project's registration details. Check the RERA website of the state where the project is located for the registration number, and then read the sanctioned plans, completion date and other details of the promoter on the RERA website.

Escrow account. RERA generally requires 70% of the amounts realised from allottees to be deposited in a separate bank account for the project, to be used towards land and construction costs, subject to the applicable provisions. Find out the bank details of the promoter for the said project and verify the payment schedule promised by the promoter.

Developer's track record and finances. Check the developer’s past track record and finances by looking up their completed projects, the time taken to complete them, any pending litigation disclosed on the RERA portal and any complaints registered by buyers. Annual reports of listed companies are available in the public domain, whereas for unlisted companies, you can ask for audited financial statements and speak to other buyers who have purchased from the said developer in the past. Ask for project registration documents and verify them independently, as you would with any seller.

Physical Verification and Site Inspection

For each plot, verify the plot number, the boundaries and the approach road as described in the layout plan and sale papers. Verify any encroachments, disputes with neighbours, waterlogging, proximity to utilities, etc. Verify if the approach road has been made and is open. Identify any low-lying areas which may submerge during the monsoon. Verify if internal roads and drainage have been completed as promised in the sale documents. If it is a launch offering plots with little development having taken place yet, verify what has been promised in the sale documents against what exists currently.

It is worth hiring a licensed surveyor to measure the land and provide a written report. Their report will confirm whether the dimensions of your land as shown on the survey correspond with the figures shown in the documents relating to your land and expose any errors in the area or boundary of your land as shown in the documents.

Financial and Transactional Documents

Once the checks are clean, the agreements fix your rights.

Agreement to Sell. The agreement should clearly outline the price to be paid, the plot number and area to be transferred, payment terms, registration date, the developer’s obligations to obtain required approvals and complete basic infrastructure for a plot, and terms which will stipulate both parties’ rights and obligations in case of either party’s default. Such an agreement should clearly spell out the date for registration or handing over of the plot, compensation/refund in case the developer fails to meet the specified date, who will be responsible for maintenance and for what period of time, and what roads, drainage and power connections the developer will be obliged to put in place.

Registered sale deed. The document transferring ownership to you after your stamp duty and registration charges for the sale (which vary from state to state) are paid as you execute the sale deed at the sub-registrar’s office.

Payment receipts. Payments should be made by bank transfer rather than in cash, and receipts should record the amount paid, date and plot number. The payment receipt will show the payment amount, date and the plot number. A mutation application then needs to be submitted to the relevant government office after registration so that the revenue department records can be updated with the name of the buyer.

When to Bring in Professionals

While it is possible to read property documents, some documents require specialist review. It is best that these are checked by someone who is competent to do so. The property lawyer checks the title, searches the court records, and drafts and checks the agreement for you. You choose your own lawyer and do not have to use the lawyer recommended by the developer.

A chartered accountant can provide advice on stamp duty, future sale issues and capital structure. A licensed surveyor will check the plot for you on site and confirm dimensions and boundary features. Each of these professionals is checking for different issues, and their costs are worth considering in relation to the amount you are investing in the plot.

Red Flags and When to Walk Away

Be wary if the seller gives unclear answers about ownership, refuses to produce original documents, incomplete/poor-quality paperwork containing missing/inconsistent information, you being placed under pressure to pay a token amount, the property being undervalued for the location in question, payment by cash only, and the actual property differing from the drawings/plans.

An isolated problem may have a simple explanation and a genuine reason for it. However, a number of problems, along with the developer’s property documents and explanation failing to provide adequate assurance, all add up. In such circumstances, it is better to err on the side of caution and withdraw from the proposed transaction prior to completion, rather than risk attempting to reverse a property purchase afterwards.

Documents to Check Before Buying a Land Plot: Quick Checklist

Before You Pay

While no single document reveals all the pros and cons of a plot, reviewing the documents listed above in sequence can help you build a clearer picture. If any of the documents are missing, ask for them instead of relying on the salespersons’ explanations. Your local property lawyer can then advise you whether the absence of any of the documents above is a trivial matter or not and whether you should pull out of the transaction or not.

These documents are subject to state-specific requirements that can change, so it’s best to have a local property lawyer confirm the currently required documents in your state before you part with any money.

FAQs

What is the most important document to check before buying a plot?

While no single document is sufficient to establish a conclusion, title is key. The mother deed, the chain of documents and the registered sale deed in the name of the seller will establish whether the seller can legally sell the property.

Is an Encumbrance Certificate enough to prove that the land is clear?

No. An Encumbrance Certificate generally lists all the registered transactions that have taken place with respect to a property, such as mortgages or other charges created. However, it may not reflect any pending litigation, unregistered agreements or other defects, such as approval of plans not having been obtained. An EC should therefore be reviewed by a property lawyer on the buyer’s behalf.

How do I verify RERA registration for a plotted project?

Search for the project name or registration number of your plot on the website of the RERA (Real Estate Regulatory Authority) of the state where your plot is situated and read the sanctioned plan, completion date and other details of the promoter.

Do I need a lawyer if I am buying from a well-known developer?

Yes, for the same reasons as above. Even a well-known name carries risks, and a careful review of the documents is required.