What Documents Are Required To Verify The Under Construction Projects

Apr 12, 2019

What Documents Are Required To Verify The Under Construction Projects Before Purchase?

Investing in under construction property is risky and provided how frequently property fraudulent cases take place in cities like Karachi, Lahore and Islamabad; people are quite choosy about the properties they buy. Being a central hub of a number of activities, major cities like the ones mentioned are quite successful in attracting investors and people looking to have a good standard of living. However, there are a number of builders and housing schemes that are illegal and rob hundreds and thousands of people of their hard-earned money.

Population of our country is increasing and to arrange for the housing of this growing population, numerous housing schemes have been started by the government as well as private sectors. So, how will you know if a property or housing scheme is legal? Well, there are a number of ways of finding it out and one such way is to check their legal documents. When visiting the office, ask the builder to show you their documents to prove their legitimacy, which include:

1) Land Record Document

Land record documents include details like the ownership and title of the property; in order to sell the under construction flats and houses, a builder has to buy the property and rights to sell it further. When buying any such property, ask the builder to show you papers like title deed and mother deed. Title deed details the ownership title of the property and mother deed explains the origin of the property, other details include obligations and rights of the builder. Before moving further, cross check the ownership through your city or area’s land records authority and through online portal to confirm the builder’s ownership legitimacy.

2) No Objection Certificate (NOC)

No Object Certificate or NOC is a crucial real estate document and one that must not be ignored when considering a property to invest in. A builder has to acquire several no objection certificates from a number of concerned departments and authorities. Such departments include land records, water, gas and electricity, forest department, agriculture department and local authorities that confirm that the project is legal and does not breech any land development law or regulation. When meeting the builder, make sure that you see the copy of their NOC letter and read it carefully before investing in the respective property.

3) Certificate of Conversion

Our government has posed some bans and regulations on building housing schemes on agricultural land due to which agricultural space is shrinking. Similarly, using commercial or industrial area for residential purpose is also forbidden; therefore, it is mandatory to seek the conversion certificate or land use certificate from the builder to check if the housing scheme is on legal land and is being used for legal purposes. Get the copy of the certificate and check it with the local development authorities to ensure its authenticity. It happened many times that builder used agricultural or commercial land for residential purposes and later, government refused to accept its legal that effected the buyers.


4) Construction Clearance or Commencement Certificate

Construction clearance or the certificate of commencement is legal document, which is given to the builder after the local body do complete survey of the site. The certificate indicates that the project meets the requirements and minimum criteria set by the government and local bodies and is legal. The certificate is mandatory for the builders otherwise, the housing society is considered illegal and not fit for residential purposes. The certificate is issued after gaining approval, construction license and permission by the local and concerned authorities and should be thoroughly and carefully checked before making the investment.

5) Approved Building Plan

Many builders will try to convince you by showing their house building designs and claiming that the approved building plan will be the same as it. However, a plan is submitted to the local concerned building authority, it undergoes several changes and chances are that you end up getting the flat that is unlike anything you wanted or were shown in the layout draft. Therefore, we advise that you do not purchase a flat whose building drafts and layout plans are not approved. Big urban cities like Karachi, Lahore and Islamabad have some restrictions regarding the building floors and area width. If you are planning to buy a property in any such cities make sure that you see the actual approved building layouts.

6) Area’s Master Plan

Did your builder say that there would be a nearby Metro station in the next five years? Good. But don’t believe him unless you see it yourself in the area’s master plan. An area’s master plan is an all inclusive building and development plan that includes all the present and future building plans in it. Builders do have these tactics of creating urgency and raising the prices by claiming that there will be a significant development like a highway or metro bus station after which the worth will increase. Master plans are easily available in a city’s development authority office that you can acquire and check yourself.

7) Encumbrance Certificate

Encumbrance certificate is issued when the property is free from any kinds of disputes, title or ownership encroachments or any other standing utility or tax payments. Many times, people had acquired a land through illegal means and sold it further to builder who use it for residential purposes. You can get all the information through your city’s land records office or via online portal as well or you can simply ask the builder to show you the encumbrance certificate. The builder has to submit some information and details into the concerned office to acquire the certificate and a yearly fee is also charged for its maintenance.

8) Khata Certificate and Extract

Khata certificate and extract details the account of the property’s ownership and is mandatory for the registration of new property and transferring of property. Khata extract is used to get complete details of the property, which is required when buying a property or acquiring trade license. A khata is divided into A and B sections; A section has a list of legal properties while the B section has a list of illegal properties. When buying a flat in an under constriction society, make sure that it is listed in the A khata; please remember that the builder may say that he has applied for the conversion of his property but it is better to steer clear of any such properties.

9) Copy of Buyer Builder Agreement (BBA)

Buyer Builder Agreement is an official agreement between you and the builder; the builder gives the BBA along with the copies of booking form and allotment letter after you have already made 20 to 30 percent of the flat’s price. After paying such significant amount, it is difficult for the buyer to back off or cancel the booking and this is what the builder takes advantage of. Before the booking, ask the builder to provide you a copy of BBA and consult a legal source to read and understand the clauses and terms and conditions. In case the builder refuses, it is better to look for another property.

Besides these documents, there are a number of other clauses and documents that must be considered before buying a property and, hence, it is better to hire a professional source for it.

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