Buying a plot is much more complicated than buying a flat in India. The plot has much more legal hurdles and disputes related to the clear titles, ownership, and legal disputes related to the plot. Thus while buying a plot, the buyer should be more careful while making a purchase and should keep a check on the legal disputes more carefully before buying the plot. The home loans are approved only for plots that fall under the municipal jurisdiction or the ones in smaller towns under Nagar-Parishad. Bank does not approve loans for the purchase of the plots at an isolated place and the ones far away from the city. The loans are also approved for the plots at the tourist spots that fall under municipal jurisdiction like Lonavala, major cities in Goa, Darjeeling, Mysore, or Pondicherry. Etc. The plots should be amongst the non-agricultural NA ones for the approval of loans. Also, the plots should be away from the coastal regulatory zone. The plot should have proper fencing of the ownership of the plotted area only. While purchasing, it is necessary to measure the area of the plot before the purchase.
The prices of the property are far higher than that of the plots. The plots can either be purchased from the individual owner of the plot, from the government authorities or else from the real estate developer who buys a large parcel of land and then creates the NA plots for the buyers to purchase of the smaller size ones either to develop a farmhouse or else to construct a house. The plot price can be decided as per the prevailing rates going on in the markets, or else the government decides the ready-reckoned prices. The ready-reckoned prices are decided by the government as the minimum transaction value, which is decided by the government as per the value of the property. The ready reckoned value is the minimum value that needs to be shown for the property registration. If it is a controversial one, the plot can land the buyer into a major financial mess and may take a long time to fight the court battle and get justice in India. Thus the buyer should be careful while buying the plot at any place across India.
Checklist while purchasing the plot:
- Legal restrictions or barriers while purchasing:
There are some legal restrictions as well which need to be checked while purchasing a property. Like being a citizen of India, the individual is not entitled to buy the plot anywhere across India. To protect the rights of the local people, there have been some restrictions being put on the purchase of land by outsiders. Like in the states of Jammu & Kashmir, Himachal Pradesh & Uttarakhand, only the local citizens of that particular state can buy the properties. Outside state residents are restricted from the purchase of the land in their jurisdictions.
- Loan approval for the plots:
The terms & conditions being applicable for the approval of the home loan are similar to that of the plot purchase. The bank approves the loans for the plots which fall under the municipal jurisdictions only. Also, the places should be free from any disputes amongst the owners who are sellers of the property and should be amongst the non-agricultural land only. The loans can be rejected in case of any legal hurdles being found in the plot. Banks are more cautious about approving loans for the plots compared to the flats as the chances of legal disputes are high in the case of the land.
- Ownership of the land:
The ownership of the plot should be single ownership-based, or else in the case of multiple owners; all the owners should be ready to sell the plot. In case if any of the owners are missing during the sale deed can lead to legal hurdles in the property, which the buyer may have to face. Thus the ownership should be carefully be checked during the purchase of the plot.
- Area of the plot:
The accurate area of the plot should be measured properly, and the same should be mentioned on paper. Sometimes the neighbors of the plots extend their boundary and use land illegally in another person’s premises. So such illegal ownership should be clarified before the purchase of the plot.
We can conclude that there are many legal hurdles or disputes in the case of the property, which can lead to a problem for the buyer. Also, the buyer may face difficulty in getting loans approved for the plot, which has similar conditions to home loans. Thus the buyer should be very careful and alert while buying the property.