“When you invest, you’re buying a day that you do not have to work”

• Property investments are extremely capital intensive, and any mistakes created throughout the method will cause high trouble for the customer when not considering the things to check before buying a plot.
• With correct legal advice, proper documents, and verification of relevant information of the property, makes every buyer invests and brings peace of mind as a sense of security and happiness.
• This article is an very important and ’TO BE KNOW’ things for every reader who is planning to own a plot. 
• You must keep in mind that you should check on certain factors before owning a plot.

Things to look for Before owning a Plot

1. Are you completely aware of the ‘Location’?

• It is important that you just confirm the location of the plot by considering its proximity to the vital areas inside the town.
• Don’t get tempt by less-priced land in faraway areas with the smallest amount of development.
• Ensure you do not get the plot by low-cost deals at faraway locations on things to check before buying a plot.
• This is an extremely important reason before you own a plot. First and foremost, it should have access to all areas of the town.
• The location could be a serious issue once it involves obtaining nice returns on your investment too.

2. Have you checked all ‘Approvals and licenses’?

• Paperwork, most important protocol to be followed by all investors.
• Check and make sure that the necessary approvals and licenses for the plots are in hands of the issuer with a help of a qualified legal consultant.

3. Is the land on the name of the builder?

The first question you should ask the builder or promoters, is that if the builder has legal rights to sell the land or not. Find out who is the current owner of the land? Is it a builder himself or not?

A lot of builders either buy the entire land from the previous owner or enter into a joint agreement with the owners to sell or develop the land and sell the plot scheme. No matter what, make sure that this part is clear. Ask for the documents which clearly show the builder has legal rights on the plot himself.

4. Has the developer taken a loan from Bank for the project?

Builders often take a bank loan for the Plot schemes and even residential schemes. It’s a sign that the builder is more serious about the project and it’s also a positive sign, because if there is the money with builder which will be specifically used for the project development.

The builder is not dependent fully on the advance money the home buyers. It shows that there is a cash flow dedicated to the project and the issue of cash crunch will be minimised.

It’s not always the case the scheme has a bank loan, but still enquire about it. If bank loan is there, it’s proof that the bank has done thorough verification from their side on the legalities and only then granted a big amount (often in crores)

5. Where is the NA order?

By default, all the land in India is ” AGRICULTURE LAND”, unless it’s defined for some other purpose by the govt. A piece of land is either agricultural or non-agricultural (usually called as NA in real estate industry)

Agricultural land can be used for Agricultural purpose, whereas if you want to do any other thing other than agriculture then one has to first convert that Agricultural land to non-agricultural (NA)

However just because a land has got NA status, does not mean that one can start using it for residential purpose, because there are various types of NA like

• NA – Commercial
• NA – Warehouses
• NA – Resort
• NA – IT
• NA – Residential (this is the one where one can build a residential house)

So if a plot of land is type NA – Resort, that means that that one can build a resort there, but can’t make a residential scheme. If a plot is NA – warehouse, then one can build a warehouse there for commercial purposes, but can’t make residential schemes and sell to the common man.

you need to look for “NA – Residential” Plot

So, the point is that you need to ask the builder/promoter, if the plot of land you are planning to buy is “NA-Residential” or not? Ask them for a copy of that. A lot of other kinds of NA plots are sold as “NA plot, collector approved” which is a misleading thing.

Another thing you have to be very cautious is “Proposed NA” schemes. A lot of builders try to sell a non-NA land telling you that its a proposed NA land, means he has initiated the process of converting a land into NA scheme, and the papers are already in process and “very soon”, the land will become NA-residential and how you will then reap the benefits of the high prices.

While there are chances that the conversion happens, but in most of the cases, it’s a gimmick to sell a cheap land at high prices and often buyers are stuck in the project, because the land is nothing more than a piece of crap later.

Don’t fall for it, because converting an Agricultural land to NA-residential is a very lengthy process in which a lot of approvals needs to be taken for it. There are cases where it’s been 10-15 yrs and it’s “still in process”

So, ask the salesperson to show you the NA order papers. Have a look at it yourself and do not fall for the promises like its coming in 2 months or next week or anything like that. Don’t get stuck into those kinds of deals.

Understand one thing very clearly, NA plots with clear title are limited and scarce, & often you will have to pay good price for it, If the land price is dirt cheap and it’s promised as NA-residential, there is a good chance that it’s fake or very very far away from the city limits.

6. What is the FSI for the plot?

Suppose you bought a plot of size 2000 sqft for building the house on it.

How much construction can you do?

Here comes the concept of the FSI or Floor space index. FSI simply means how much construction can be done on a piece of land and it depends on the location of the plot.

FSI of 100% means if you have a plot of size 2000 sqft, you can build a house of 2000 sqft on that. If the FSI is 75 %, then you can only build 1500 sqft of house on that 2000 sqft land.

Why FSI is very important?

So understand that FSI has a very important role to play when you will construct something or even when you will sell the plot to someone else. Imagine 2 plots which are of the same size (2000 sqft), but with different FSI like 50% and 100%

• Plot A (50% FSI) – You can make just 1000 sqft home on that, which will be like a 2 BHK)
• Plot B (100% FSI) – You can make a 2000 sqft home, which will be like a 4-5 bedroom Bungalow.

But then it might happen that Plot A is selling at 10 lacs and Plot B is selling at 15 lacs, and you might say – “Plot A is cheaper because its less priced and the size is same (2000 sqft)

One important thing you should know is that FSI for agricultural land is very small generally. In Maharashtra, it’s just 4 %, which means even if you buy a 10,000 sqft Agri plot, you can only do the construction of 400 sqft on that land.

You should definitely ask the builder/salesperson to share the document which mentions the FSI on it. Judge the price of land only after learning about FSI, not just the area.

7. What are the other projects completed by the builder/promoters?

You should ask the salesperson about the other projects done by the builder. Check if they have done other similar projects in the past? What was the response to it? What is the quality of those projects? Were there any legal issues with those schemes? Are the buyers happy with the builder work there?

You can often get some clue about all this on the internet or the online forums. Just go to the website of the builder and find out what are the other schemes he has done. Search with the other project names and see what others are talking about?

If you get a chance, I suggest paying a visit to past projects once. Spending half a day in this will only help you further to take the decision.

8. When will the Sale Deed happen?

You will often hear about the “agreement to sell” which is executed when you book the flat/plot and clear your initial payments (around 25-30%).  Once the agreement to sale is completed, a lot of buyers think that the flat/plot is registered on their name and now they are legally safe.

However, this is a myth and the “agreement to sell” does not make you a valid buyer. The agreement to the sale (often called ATS) is just the AGREEMENT TO SALE, which means it’s an agreement between buyer and seller on the initial points and terms under which the sale will happen in the future.

It mentions the terms and conditions of the deal, how much initial payments are you making along with cheque number and also the future dates, by when you will clear the payments, etc.

What is the “Sale Deed” document?

“Sale Deed” is the document that needs to be registered in the office of sub-registrar in order to make the sale happen. Unless the sale deed is done, you do not become a legal owner.

Hence, ask the builder or salesperson about the sale deed? When is it going to happen? The sale deed is generally done, only when the builder gets all the dues from your end.

9. When will an individual 9/11A Katha in my name?

Lets first help you understand what is “9/11A Katha”? It’s the document maintained by the revenue department which mentions how the land moved from one owner to another owner. So in a way, its a history of the land and you will find exactly on which date who sold to whom. This way you will find out who is the current owner of the land also.

10. What will be the per annum maintenance after buying the plot?

Once you buy the plot, there is annual maintenance that needs to be paid which goes towards maintaining the basic amenities like security, upkeep of the project, gardens, water, security etc. It should not be a surprise for you later. This maintenance is generally paid on a yearly basis and it’s proportional to the plot size. For example, if it’s Rs 4 per sqft and your plot size is 2000 sqft, then your maintenance per year would be Rs 8000.

11. What are the arrangements for water and other basic amenities?

Always ask how they are going to provide water and other basic amenities. Is it going to come from the municipality or the gram panchayat? Or they are doing their own arrangement for it?

And also ask some other questions like :

1. What about electricity?
2. Are they going to arrange for a individual electricity meter?
3. How much are they charging for it?
4. If the plot/land is too much away from the main road, then what about the access road?
5. Who will develop it?
6. What about fencing of plots?
7. What about security?
8. Ask everything in detail and in points.

Important tips for someone buying a land[

• Make many visits to the plot – Don’t book the plot just after one meeting or without visiting the plot yourself. I would say that one should make at least 3-4 visits before the deal. Just make a surprise visit and ask others on the site about important points and you might find some new information about the plot which was not told to you
• Check the nearby development yourself –  If the salesperson says that a new flyover is coming up nearby or if there are 3 colleges within a 2 km radius, just find it out yourself.
• Talk to people nearby the plot – If you can go a bit further, see if you can talk to people who live nearby the plot. Make a random visit and then ask the shopkeepers nearby, houses nearby on the points which concern you.
• Check for the price – Some offer negotiation or sold at fixed price. Always check the prices in the same locality. If the seller is offering more than similar locality standard then check the reasons for that. If you feel the reason are not worth then so bargain for a better price. Always compare and come to a decision.

12.Beware of small unknown builders for plot projects

By now I think there is no need to tell that land buying is very complicated and one should not attempt it if you do not have the risk appetite for it.

There are many small flies by night people who know how mad people can get to own a plot of land and they come up with schemes where their sole intention is to make money for themselves and cheat customers. 

I would strongly recommend that you involve a good property lawyer for verification of documents and the legality of the project. It would increase your cost a bit, but then it becomes a more secure investment.

Please note that all the points I have mentioned above, are based on my knowledge and understanding. If there is any correction to be done, please share that with us. Also please share your comments and views in the comments section below.

13. Check, Is there any GST applied?

Usually in plotted development, a NA land has to be developed. So builder will usually come access GST for development charges. Note: GST is applicable only above Guideline value. If GST is applicable then check who is bering this GST. Is GST includes in the price said to you or it’s a hidden cost. Always take a write investment breakups from builder/ promotors on land which your owning.

14. Have you gone through the ‘Title Deed’?

If you wish undisputed legal possession towards an available vacant land, you want to impose a transparent title of purchase land. Whether it’s a residential plot, commercial plot, or investment plot, continually confirm that there aren’t any unclear deeds. Any deeds wherever the transfer of the land to you is questionable should be addressed, well earlier. It might facilitate if you’ll be able to consult a professional person over the deed of conveyance by things to check before buying a plot.

15. Is ‘Local Approvals’ received?

Check and make sure that the native authorities have given all-clear titles of any deeds for the purchase of land of commercial/residential  property. Check the necessary approval documents for the plots and make sure it is verified by a lawyer and things to check before buying a plot. Whether the builder has any plans to develop the plot, ensure that the planning permission and building approval has been obtained from the local authorities. For real property, the key to massive capital gains through land purchase is to induce a plot available with proper papers for your peace of mind.

16. Builder Verification for Things to Check Before Buying a Plot

There are many judiciary problems in plots. This can be why it’s steered to cross-verify the vendor valuation.You need to additionally verify their past and current projects for your queries and references for things to check before buying a plot.

17. Have you Check the Potential of the Plot?

In addition to plot location and its growth prospects, another important issue in mind is, whether the plot is located with potential or not while occupying the acres of land. For instance, if you wish to create a villa within the plot you’re getting, the land contract should be set in a neighbourhood that’s appropriate for villa construction. Similarly, check if the plot is on flat land or a slope. Also, check for arrangements like water and alternative basic amenities. Therefore, it’s necessary to judge the potential of the plot before buying it.

18. Has all Property Tax Receipts and Bills paid & also is loan available?

To free yourself from any taxation problems, it’s counselled that you simply raise to the vendor (of the plot) for previous capital levy receipts.

This could have been paid in conjunction with alternative bills associated with the plot. The receipts can make sure that you don’t need to upset any taxation-related problems with the vendor.

Covenant Banks and monetary institutes provide “Land loan” or “Land purchase loan”. A land loan may be a funding choice that’s meant to be used only for the purchase of land. Banks sometimes insist that the land you’re shopping for, whether or not it’s for your house or for business purposes. Ought to be from a development authority or from society, implying that it ought to be a lawfully safe land for things to check before buying a plot.

Conclusion

• So the best thing would be to understand the things to check before buying a plot.
• If you are merely looking to invest your funds in plots in Bengaluru or a good location that will see appreciation in the future, Avenue Nest would be a good choice.
• Avenue Nest offers you residential plots, Farm-Land, and Construction & Apartments.
• Our Projects are the right areas for you to invest in to get a high profit in the future. Have a look once.
• Hope this article would be more insightful for every reader to have a checklist on the things to understand before buying a plot.