One must assess the land related records for its clear title and to avoid any discrepancies in future. If the land title is not totally clear, even of the previous owners, then legal problems can arise for your property also.

The list may include

a) Full chain of land transfers and owners, with all papers including registered agreements, stamp-duty payments, inheritance etc., advertisements and gazette announcements etc.

b) Complete revenue records of land, i.e. 7/12 extracts (saat-bara utara) etc.

c) Conversion from agricultural to non-agricultural, de-notification of Adivasi land etc.

d) City Survey Plan indicating the boundaries of the plot or plots of land.

e) If any land-owner inherited the land, then Will/Testament & Probate in favour of the inheritor.

f) If there was any dispute about ownership at any point (i.e. present owner or previous owners, then copies of the final court judgment.

g) If land was mortgaged to any bank or financial institution, then all papers of the bank etc. relinquishing the lien in favour of owner.

h) If land was leased by the government, then lease agreement and receipts of lease rent payments i) Registered agreement between the builder / promoter and the land-owner

Depending upon the stages of construction, one should check for following outlines documents from the Builder/Developer

a) Proposal / Letter of Intent (LOI) submitted by builder to licensing authority e.g. MCGM’s Building Proposal Department or MMRDA for Mumbai area. CIDCO for Navi Mumbai Area.

b) Intimation of Disapproval / Intimation of Approval (IOD/IOA) given to builder by the Licensing Authority. Legal conditions that the builder must fulfill are mentioned in this document.

c) No-Objection-Certificates (NOCs). NOCs specified in IOD/IOA must be collected by the builder from several authorities such as police and fire brigade, and submitted to the licensing authority.

d) Commencement Certificate (CC) is received by builder from licensing authority after the IOD/IOA conditions are fulfilled. CC authorizes the builder to commence excavation and foundation work. He can build upto plinth level i.e. ground level, even before getting approval of the plan layouts.

e) Approved plan layouts. The plan layouts submitted by the builder and architect are studied by the licensing authority. After required changes are made, these layouts are approved.

f) Amendments to approved plan layouts. The builders commonly submit amendments after getting plans approved, and thus they add extra floors to the already submitted layouts.

g) Completion Certificate from Project Consultant. Quite often, an “independent” project consultant is appointed by the licensing authority to oversee the architectural, financial and legal aspects of the project. This agency is however paid for by the builder himself.

h) Building Completion Certificate (BCC) from the licensing authority. This is issued after receiving the Project Consultant’s completion certificate.

i) Occupation Certificate (OC). This is the final certificate from the licensing authority. This certificate is crucial for you. Without this certificate, the Municipal Corporation normally will not give a water connection to your new flat. Also, it is necessary for sale or transfer of the flat.

j) Conveyance. This signifies transfer of the plot of land to the cooperative housing society after it is registered. The ownership of the land is transferred in the Revenue records.

It is important and advisable to have the agreement scrutinized by a lawyer or a knowledgeable person, so that the builder does not include clauses that are to his advantage and your disadvantage. This is normally based on model agreement provided under the Maharashtra Ownership of Flats Act (MOFA). Things to watch out for:

a) The agreement must not contain any illegal clauses e.g. sale of parking, terrace, staircase, landing and other common amenities that belongs to the cooperative society collectively, and not to the builder.

b) It should mention all costs and charges up front i.e. no hidden costs. For example, many builders illegally charge exorbitant amounts as “transfer fee” if a flat owner sells his flat before the cooperative housing society (CHS) is formed. The builder is not authorized to charge transfer fees, and only the CHS can charge Rs 25,000 maximum.

c) It must not curtail your legal rights as a Consumer with illegal clauses e.g. “After taking possession of your flat, you have no right to seek redressal against any perceived shortcomings in common amenities provided.”

d) It should mention the actual measurable dimensions of the flat i.e. Carpet Area, excluding non-FSI elements such as flower beds and dry-balcony.

e) The dimensions and specifications of the entire building, its compound and all common amenities must be mentioned, because that is what you are paying for (and not just your flat). The agreement must mention specific details of each and every amenity promised. It cannot just say, “Clubhouse admeasuring 4,000 sq ft.” Insist that specifications of each facility such as central air-conditioning, gymnasium, pool table, swimming pool, children’s playground, parking lot, etc. should be mentioned, with as many details as possible.

Please click here for our sample agreement…..

It is always important to keep a check list when going about the evaluation process. There are a few common check boxes irrespective of location which come first:

1) Conversion/ approval of land for residential development is available.

2) Plans: Approved construction plans are available and they match with the design being promised. Such approved plans must be displayed on the project site at all times.

3) Permits: The list of essential permissions and approvals required for the project is known (importantly urban/ town planning, municipal corporation, environment and forests, airports etc). Find out which of these are obtained and which are pending.

4) Land: The developer has authority/power of attorney to transfer the undivided share of land to each flat owner and the entire plot to the society and/or the project on completion.

5) Ownership: The landowner/promoter/developer has no right on open spaces, terraces etc to provide unrestricted ownership and enjoyment of property by flat buyers.

6) Access: The building has clear and approved road access, right of easement and established pathways

Quite often securing such detailed information, verifying and deciphering it can be quite complicated. Hence preliminary due diligence by the buyer is must and should consider following parameters first

a) IOD/CC: The Municipal Corporation of Greater Mumbai and Thane issue certificates called Intimation of Disapproval (IOD) and then Commencement Certificate (CC) for construction of buildings. Since development cannot commence before CC is obtained, buyers must verify this.

b) Land Rights: Land in Mumbai can either be free hold or lease hold and rights transferred ancestrally (gift/inheritance) or through MHADA (Maharashtra Housing and Area Development Authority), Mumbai Port Trust, Collector of Mumbai, Railways, Airport Authority, National Textile Corporation, Slum Rehabilitation Authority (SRA), Mumbai Metropolitan Regional Development Authority (MMRDA) or other State agencies. It is important to understand the covenants that go with such ownership or rights.

c) Zone and Use: The city master plan has clear demarcated zones. However it is possible to use industrial, coastal regulation zones (CRZ) or even forest zones for residential development provided necessary permissions and approvals have been obtained and the regulations regarding such development followed. Understanding current zoning and conversion to clear residential use is very important

d) Development Regulations: The Development Control Regulations (DCR) governs the construction of buildings in Mumbai. These rules come with their own covenants. The buyer must understand the DCR under which the building has been constructed and the limitations/benefits under these.

e) Computation of area: In Mumbai several terms like built up, super built up, saleable, carpet areas are used to define the floor space being made available to the buyer. The difference between the carpet area (the actual area between walls in a flat) and the area sold (saleable area) is called the loading factor. Maharashtra laws make it mandatory to sell flats on carpet area. Carpet area does not include the area of terraces, flower beds, balconies and car parks which are granted free from FSI computation to each building. It is hence important to understand the stated vs. the actual carpet area and the loading factor being applied. Loading factor  = (Saleable area  – Carpet area)/ Saleable area. This factor should generally not exceed 30%. Obviously the lower the better. The term built up area is used for the entire floor area including the wall thickness whereas super built up apportions the common areas like lift, lobby, staircase etc.

f) Total Cost: While the apartments are usually quoted on basic prices, there are various other costs affiliated with a purchase which can grossly increase the total cost of ownership. Hence it is important to not get mislead with just the advertised or offer price but understand the total composition (all in all costs). Some of the elements of costs include: floor rise, car park, amenities, preferred location, infrastructure charge, and maintenance and club house. Hence it is important to understand the total cost of ownership, with their detailed elements, with taxes, stamp duty, registration and brokerage.

g) Maintenance: Developers usually take lump sum and recurring maintenance charges till such time the building has been fully handed over to the society of owners. It is important to understand the reasons and elements of such charge and the responsibility of the developer therefore. Also understand the total recurring costs that each flat owner will need to bear towards property taxes and maintenance each year.

h) List of promised features: Buildings, projects and flats are often marketed with several features. It is important to get minute details of such features, have them appear in the agreements and question on penalties related to non performance. Documentation usually allows ad hoc and unannounced changes by the developer. Hence purchase decision cannot be based only on promised features.

i) Infrastructure: Projects sell based on proposed road widening, metro rail connectivity, flyover, new airport being announced, social and civil infrastructure being developed. While many of such developments may be on the anvil, being led by the promise of uncertain future projects is not prudent. Only those infrastructure developments where work has commenced or is under the developers control and hence part of the contract can be safely assumed.

j) Safety and Sustainability: The least thought of parameter, but probably the most important for the long term should be the safe and sustainable features of the building. With increasing power and water cuts, green buildings which conserve energy, regenerate waste and create a positive ecosystem are more likely to have better life, utility and lower cost of ownership in the long run. Also having better shock and earthquake resistance buildings, with higher resistance to fire, noise, air pollution along with safety features for elders and children are very important too given Mumbai weather and social environment.

k) Parking: Whether the flat buyer pays separately for dedicated parking space or not, there must be ample parking space for himself and his guests in and around the building. With increasing vehicular traffic, this can become a tipping point between projects.

High level of diligence and information always helps in making sound property decisions. For a discerning home buyer, one must also check and need to understand

  • Other operating agencies like CIDCO/NAINA, Town Planning, District Collector, etc. become nodal approval agencies. Understand the process of buying, selling and transferring flats in each jurisdiction since regulations can be quite complex and expensive.
  • Proper available of public utilities like water, electricity, sewerage lines, drainage, telephones and cables in the project
  • Most often, land outside Mumbai is predominantly agricultural. Clear conversion certification for residential use along with ownership rights of developer is important.
  • The total commute time and available infrastructure to travel to important city/town destinations will determine larger buyers interest and appreciation of the flat
  • Availability of social infrastructure around the property: Projects in areas with established educational, medical, retail and recreational facilities are likely to find more buyers and higher appreciation than an upcoming, underdeveloped location.

Price History: Properties outside Mumbai including Navi Mumbai have experienced extreme price volatility. It is useful to analyze the price and appreciation/volatility trend of the target micro markets to predict their behaviors in the future. Stable and steady growing markets are always preferred.


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