Precautions/ points to be considered before buying a plot for construction of house or pruchase of land

This article will be helpful to first time buyer of land/ plot for construction of house, person who want to invest in property, real estate, having surplus funds of invest in property, the person having windfall income from sale of ancestral property and want to further park funds in real estate only to avoid income tax on capital gain etc.



It is everybody's dream to own a house of his/ her own. In India particularly the middle class is living in rented accommodations.  The rising trend of increase in rent, increasing the family size, rise in income level, avenue for extra rental income etc are many reasons for which a common man tries to purchase the plot and construct his own home.

But in the eyes of a common man dealing with revenue records is a tedious job or nearly impossible to understand. considering this knowledge gap a class of middle men or agents crops up, which are distorting the real estate market. The seller of land is not getting the price and buyer has to pay more.

The significant difference in govt price and market price has lead to generation of black money and further making it expensive to afford a piece of land to construct a house. The registration fee and stamps are to be purchased on the basis of government price of land. the seller insists to quote less price to show his less income to avoid income tax and buyer want to pay less to govt in term of registration fee and stamp duty as these costs are to be borne by buyer. This is also forcing a honest person to become criminal in the eyes of law. Whole of mileage is  taken by some unsocial elements and making them milliners  or billionaires overnight.

Even after spending the hard earned money some people were misguided by agents and the buyer remains in metal tension throughout of his life. Keeping in view the experience some key points/ precautions are required to be checked before purchasing of plot/before construction of house. The conditions and rules may very from location to location but the basic idea is to create a general awareness.

1. The most important point before consideration to buy a plot is its access to road or the way. In punjabi it is called raah or rasta. without clearly demarcated road/ rasta in revenue record with the identified path, the plot or agricultural land has no value. other person/ neighbour will not give the way to access your plot. ultimately this plot has to be sold to neighboring plot holder who has access to road/ rasta. some agent manipulate that later on it will be demarcated on map/ revenue record, which will never happen after the sale. so make it clear to have a clear cut road/ rasta access to identified plot in revenue records.

2. Second most important point is the size of plot. after enforcement of town and country planning act, every locality/ area is having criteria for minimum purchase of land. eg. in Himachal where bigha/ biswa system is there minimum land required is 7 biswas or in kanal marla system minimum land is required 10 marlas. the requirement may vary from location to location. any plot having less than minimum specification can not be used for construction of house. The Map of house will not be approved by TCP (Town and country planning)deptt. and if any person build his house, there will be no connection of electricity, water, and other utilities. So before purchasing any land/ plot minimum prescribed area should be confirmed from TCP officials.  

3. The third most crucial point is the entry of transaction/ takseem/ mutation in revenue record of patwari. In general practice it is assumed that after registration the land is owned by the buyer. but in revenue records terminology the transfer of ownership is complete only when the mutation of sale/purchase has been entered by red ink entry in revenue record of patwari. The common process of entry of sale/purchase follow following procedure:

Registration----Entry in mutation/intkaal register----entry in patwari rojnamcha/ daily diary---entry in jamabandi of patwari.

when the entry has been made in jamabandi of patwari, a copy of jamabandi of that khata be obtained having red ink entry in your favour from concerned patwari. The signature of patwari with seal and date and description like "Nakal Mutabik asal Hai"should be obtained. This copy of jamabandi should be attached with the registration available with you. then the transaction is complete.

The risk behind is that in some case frauds are happening that same piece of land is sold twice or thrice to different parties between the time of registration and its entry in jamabandi. To avoid this risk copy of jamabandi having red ink entry should be obtained and in any case there is fraud, the responsibility lies with the patwari if you have copy of red ink jamabandi with signature and date.

There are many other  points which will be elaborated later on keeping in view the feedback and instances which come through.

You can share your views/ experiences/ information on anil.chauhan2@gmail.com which can be further analyzed and posted on this blog.

PURCHASING AGRICULTURAL LAND

PURCHASING 
AGRICULTURAL LAND

Purchasing of land is always considered a safe avenue of investment. Generally purchase of land is made for speculation as investment point of view and in some cases for cultivation of agricultural and horticultural crops. As land is scarce resource hence its demand always exists, the price range may vary with the flow of cash in economy.

In the present cycle of economy there is great slump in real estate market. The prices of property already corrected a lot. Investment in land for speculation point of view is not a profitable business from last two years. Hence investors are thinking on investment in agricultural land for cultivation point of view , in which agri farms can be developed and which can be sold in future on high premium.

While purchasing the agriculture land for cultivation purpose following revenue and non-revenue related points should be considered.

The location of land is most important. The land should be ideally located near the road so that agri machinery should reach to farm easily. Most crucial point to be considered that land should be connected with road, in revenue terms it is called “Raah”, means there should be raah to land, without the access of raah there is no use of land, and owner cannot use some others land to perform the intercultural operations of agriculture/ horticulture.

The purchaser of land should ensure that there is regular source of irrigation water. This may be either through canal linkage or tubewell in the land. In some areas where water level is very low, the permission to dig deep tubewell or submersible pump is not granted by irrigation department, these areas are marked as red zone. Hence purchasing of land in these areas is of no use.

Prices of agricultural land are always remains a key point while purchasing of land. In states like himachal, government has issued direction regarding circle rates of land in different districts. These are called the average rates or salana ausat of agriculture land, on which registration of sale deed is done. The rates are calculated on the basis of distance of land from connecting road and type of road as well. There are different rates for land upto 25 meters far from road, from 25 to 50m from road and more than 50 meters. The rates are notified be deputy commissioner and are valid for one year. The registration is made on these rates. At present in Himachal stamp duty is 5% registration charges are 2%. Hence the location of land is very crucial in terms of its price. It is pertinent to mention here that non himachali cannot purchase any type of land in himachal. They have to obtain permission under section 118 from government.

While purchasing of land the revenue related issues as mentioned in my previous posts should be considered regarding its type, ownership and possession. One important point to be considered after purchase of land is that the red ink entry of mutation should be ensured in 12^th column of jamabandi. A copy of jamabandi having mutation entry with signature and stamp of concerned patwari should be kept in own record for reference in future.

In addition of above points some other important points should be considered which will be elaborated in my future posts. Your valued suggestions are always welcome. You can also send your queries and suggestions on my mail anil.chauhan2@gmail.com.