How to buy a flat if all original documents are lost !!

How to buy a property when all the original papers are lost

Article source : The Economic Times

A couple of years ago, when a 38-year old IT professional, was looking to
buy a house, he zeroed in on one at Kandivli, Mumbai. "The property agent
had shown me a few houses, but I liked this one because it was in an ideal
location, was well-maintained and, more importantly, fit my budget."
However, HE became suspicious and reluctant when the owner said he
preferred the entire sale proceeds in cash, at one go. He decided to
research and roped in a lawyer to help him out.�

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*Soon, they realised that the owner did not have the original documents
related to the property. "Seller said he had lost the documents some months
ago while travelling. He assured me that it was completely safe to buy the
house as he had the relevant photocopies," says Chapke. While he was
agreeable, all the banks that he approached for a loan refused to give him
one.*
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*So, Chapke cancelled the deal. Though house owners are careful while
storing property documents, they may still lose them. Misplacing original
documents doesn't mean that you cannot sell or buy a property. While you
can settle the deal in such a case, it will require additional paperwork
and result in higher costs.*
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*How to get duplicate documents*
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*When you lose such important documents, the first step is to file a police
complaint. "The owner should file an FIR stating that the documents have
been lost, misplaced or stolen, and get a copy of the complaint. If the
house is mortgaged and the documents have been misplaced by the bank, the
FIR will still have to be filed by you." Buyers should ask for a copy of
the FIR from the seller.*
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*The owner will also have to place an advertisement, stating the loss of
the documents, in an English daily newspaper, as well as a
regional/vernacular one. "Even the buyer can place such an advertisement
and, through it, call for any claimant to the property within 15 days of
the advertisement being printed," *
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*Based on the police complaint, the owner can apply for a duplicate share
certificate from the housing society, which can put up the application at
its society meeting. If the application is approved, the housing society
will issue a copy of the share certificate after charging a fee. Another
document that owners and buyers need from the housing society is the
no-objection certificate, without which no lender will be willing to
provide a loan. So, ensure you get this too.*
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*After this, the owner will need to get an undertaking on a stamp paper,
stating that he has lost his original documents. "The undertaking should
outline the details of the property, the text of advertisement published in
the newspaper, and the police complaint number. It should also clearly
state that all the details declared in the undertaking are true," . This
document should then be attested, notarised and registered with a notary.*
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*The next step is to get a duplicate of the original sale deed, which can
be obtained from the registrar's office as it maintains the records of all
transactions in its jurisdiction. "The owner will have to submit copies of
the police complaint, share certificate from the housing society, the
newspaper advertisement, and the undertaking, at the deputy registrar's
office and pay the required charges. He will then be issued a copy of the
sale deed," .*
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*"If it is an old property, it is also advisable to get a title report of
the document to ascertain that the property is free of encumbrances. As the
deputy registrar's office will have all the details of the property, you
can easily get this document from there." He advises the hiring of a
property surveyor or legal consultant to conduct due diligence for the
property concerned.*
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*If the buyer wants to take a loan*
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*Though banks are typically wary of providing loans to buyers if the
original property documents are missing, it isn't always true. Says Ram
Sangapure, general manager, Central Bank of India: "The decision to lend
money in such situations is decided on a case-to-case basis. Usually, the
result will be more favourable if the borrower and seller have enjoyed
a long-term relationship with the bank."*
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*Banks will conduct additional due diligence in the case of such
properties. "The bank's legal team will first verify all the documents
associated with the property, including the police complaint records. Then
it will check whether all duplicate documents are genuine, not forgeries,"
he adds.*
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*Of course, any charges that result due to additional paperwork or legwork
will have to be borne by the borrower. The bank will also ask both the
seller and buyer to give separate undertakings that if and when the
original documents are found, they would be handed over to the bank. After
this, it will offer the loan.*
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*Source : Economic Times *