House.Hunting?

Learn the when, from and how to go about it. Here's the legal lowdown on house buying

One tough cookie 

That's what you have to be when house hunting. Because if you're sitting back, working up visions of yourself as a proud owner of a fully furnished house, there's something you need to do: Wake up and smell the coffee! There's a lot or pre-buying problems you might face when buying your 'dream home'.

WHOSE LAND IS IT ANYWAY?

Possibly the first thing you have to check once you've spotted your space is to check on the title or the ownership paper of the property. Who the owner is and how he or she got the property. Check if there are other possible heirs to the land to avoid disputes later. How? Ask if anyone has a claim by putting out advertisements in the papers. In case of ownership by a minor, there should be court approval - minors can't enter into contract. 

STAMP DUTY

Stamp duty has to be paid. The rates differ for each state, but  in Maharashtra, for residential premises there is a duty of eight percent of market value of the property. And if it's commercial property it's a flat 10 percent. 

YOU NEED A SOCIETY

So you've got past the title and stamp duty but there is no way you can escape that absolute essential - a building society. A building society could be formed by the builder, and the flat purchasers become the members. Or people come together and form one without the builder. The land and the ownership is in the society's name, therefore, the municipal corporation will submit one bill to the society who collects the money and pays it. 

WHY YOU NEED MUNICIPAL CORPORATIONS

Before buying a house there are several certificates you have to obtain from this esteem organization. To begin with, Floor Space Index (FSI) is the ceiling that the municipal corporation has set for builders depending on the space available in each city. So, you need to get a commencement of Intimation of Disapproval (IOD) certificate an occupation certificate (so you that you can occupy the flat) and a completion certificate issued by the municipal corporation. This will keep you safe from buildings collapsing over you head! If you are buying a place near the sea check the Coastal regulation zone (CRZ) which is the distance one can build from the high tide line. 

MAKE SURE YOU AND YOUR BUILDER AGREE!

You've made it to the agreement phase! You're nearly there. Though there are certain things that you should know. After you agree upon the price, there is a transfer fee that you have to cough up. This varies from building to building, and although the law permits only Rs 25,000 as a maximum payment in a co-operative society, because of low times, at can vary. This is shared by the buyer and seller. While the market practice says it should be a 50-50 share, there is no hard and fast rule on it. You also have to get a society approval called society No Objection Certificate (NOC) 

37 I

It's yet another form... To avoid transaction of black money, the government has introduced the 37 I form. This has to be submitted for houses that cost beyond 75 lakhs in Mumbai, 50 lakhs in Delhi and 25 lakhs in Madras and Bangalore. The form is then submitted to an authority called the "appropriate authority" which is a part of the income tax department. The form must be submitted within 15 days of signing the agreement but it takes up to three months to clear. It is to cross check the value of the property. 

THE GRAND FINALE

You now touch the finishing line by completing the transaction. Pay the price, stamp duty, take possession and submit your forms to the society. You may be asked to submit to the registrar, whereby you incur a registration fee- a maximum of 20,000. This is not compulsory for transactions of co-operative societies. 

MORTGAGE

Taking a loan to buy a house means to mortgaging it. Mortgage is a security against the loan, where one puts down a deposit and pays back the interest and the principal in installments. The conditions differ from loaners like HDFC and other banks. Now check with your advocate to make sure everything is in place.

Well, now that you're a near professional on the do's and don'ts of buying a home, it's time to start dreaming.