Examine the complete title chain to establish how the present owner acquired the property.
The Supreme Court, in Jamnabai and Others v. Vasudev and Others, ruled that revenue-record entries neither create nor extinguish title to immovable property.
Mutation entries mainly serve the purpose of revenue administration.
For buyers, the ruling reinforces the need to establish ownership through proper title documents.
The dispute concerned about 12.41 acres of agricultural land and a house.
After Bhagwansingh died, his sons Ramprasad and Vasudev inherited them and were recorded as co-owners.
In January 2008, after seeing a newspaper notice for a proposed sale, Ramprasad's legal heirs found that his name had disappeared from the revenue records and parts of the property had been mutated in the names of Vasudev and his son.
They went to court where the other side claimed Ramprasad had surrendered his share.
The Supreme Court held that a claimant alleging surrender must prove the underlying transaction, and that changing names in revenue records cannot itself lead to transfer or surrender of ownership.
It restored the heirs' property rights.
A revenue or mutation entry alone does not establish ownership conclusively.
"Mutation in the revenue records merely follows title and does not create it," says Prashant Thakur, executive director & head - research & advisory, Anarock Group.
Ownership arises through inheritance or a transfer by a valid owner.
"A transfer should be recorded in a written, stamped and registered document, which must be traceable back through an unbroken chain to an earlier owner whose title is sound," says Avnish Sharma, partner, Khaitan & Co.
Examine the complete title chain to establish how the present owner acquired the property.
According to Thakur, a registered sale deed is the most important formal proof of the buyer's ownership of property.
Conveyance is the wider term covering registered instruments that transfer ownership, including a deed of gift, exchange, release and assignment of leasehold rights.
Engage an independent lawyer to prepare a title report.
"The report should verify the complete chain of title deeds against certified copies from the sub-registrar," says Sharma.
Thakur adds that the title search is usually carried out for 30 years.
The lawyer should obtain an encumbrance certificate from the registration authorities.
"The sub-registrar search should cover registered sales, mortgages, releases, gifts, attachments and other encumbrances," says Anirudha Khopade, head, data science & analytics, Square Yards.
Check revenue records for ownership, mutation, tenancy and land-use issues, and Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI) records for mortgages.
"The title report should check for litigation in civil and revenue courts, consumer forums and tribunals," says Sharma.
Ensure that survey numbers match across title and land records.
Physically inspect and, where required, measure the property.
"Verify possession, boundaries, access, occupation and encroachments," says Heena Chheda, partner, Economic Laws Practice.
For inherited or jointly owned property, establish each person's transferable interest and share.
Obtain the complete title chain and deceased owners' death certificates.
"Legal-heir documentation and all succession or transfer documents should be obtained," says Khopade.
A partition deed is relevant where co-owners have divided their shares.
A relinquishment or release deed is important when a co-owner gives up an existing right.
Both require stamping and registration.
Probate or letters of administration may be required to establish authority under a Will.
All co-owners and legal heirs should be party to the transaction.
"Every person with an existing interest should participate in the transfer or there should be a legally valid document establishing that their interest has been transferred or extinguished," says Sonam Chandwani, managing partner, KS Legal & Associates.
All co-owners, or their duly authorised representative, should execute a registered sale deed.
"Affidavits, consents, indemnities and mutation entries cannot substitute for a duly executed and, where required, registered transfer of an existing ownership interest," says Chheda.
Buying a flat involves an interest in both the land and the constructed unit.
There are risks concerning land, promoter authority, construction approvals, project finance, common areas and the society or association's title to the land and building.
When buying from a developer, verify the developer's authority over the land and development rights.
"If the promoter is not the landowner, verify the landowner's title and the stamped, registered development agreement and power of attorney allowing development and sale of that flat," says Chheda.
Also verify Real Estate (Regulation and Development) Act (Rera) registration, layout approval, building plan sanction, and commencement certificate.
Execute a properly stamped and registered agreement for sale, and obtain payment receipts and the possession letter and occupancy certificate at completion.
Check mortgages and charges on the project or land.
"Where the project or land is mortgaged, obtain a unit-specific lender release or no-objection in a form that permits mortgage-free transfer," says Chheda.
Khopade adds that society or association records, maintenance dues, property-tax dues and the seller's authority to sell should also be verified.
For resale property, verify the original registered sale or conveyance deed.
"Examine the complete documentary trail from the original allotment or conveyance to the present seller," says Chandwani.
No legal mechanism can guarantee an unchallengeable title.
"Due diligence should identify and eliminate foreseeable title defects," says Chandwani.
Address any unexplained gap or competing claim before paying the purchase consideration.
While these checks cannot make ownership airtight, they can materially reduce the risk of a successful challenge.
Disclaimer: This article is meant for information purposes only. This article and information do not constitute a distribution, an endorsement, an investment advice, an offer to buy or sell or the solicitation of an offer to buy or sell any securities/schemes or any other financial products/investment products mentioned in this article to influence the opinion or behaviour of the investors/recipients.
Any use of the information/any investment and investment related decisions of the investors/recipients are at their sole discretion and risk. Any advice herein is made on a general basis and does not take into account the specific investment objectives of the specific person or group of persons. Opinions expressed herein are subject to change without notice.
Feature Presentation: Ashish Narsale/Rediff