There are three categories of property purchase that produce the most preventable legal disasters in Indian real estate.
Not because buyers are careless. Because the specific legal requirements for each category are either unknown to most buyers or presented to them in incomplete and misleading ways by sellers, brokers, and sometimes their own advocates.
Dr. Sravan Kumar, Founder of Aneesh Associates and author of The Indian Law of Property Due Diligence and Title Examination, addresses each category with the depth that the frequency and severity of resulting disputes demands.
Category One: The developer project and the RERA verification that most buyers skip:
Section 3 of the Real Estate (Regulation and Development) Act, 2016 makes it mandatory for every promoter of a real estate project to register the project with the relevant State Real Estate Regulatory Authority before advertising, marketing, booking, selling, or offering for sale any plot, apartment, or building.
This is not optional. It is a prerequisite. An unregistered project cannot lawfully be sold. Any agreement entered into by the promoter for an unregistered project is unenforceable and creates significant legal risk for the buyer who paid without verifying registration.
But RERA registration is only the beginning of what a developer project requires.
A building constructed without approved plans has never received the foundational regulatory clearance that legitimate construction requires. A Commencement Certificate authorizes the start of construction and confirms that pre-construction requirements have been met. Without it, the developer has built in violation of approval conditions from the point of groundbreaking.
The Occupancy Certificate is issued when the building has been inspected and found to have been constructed in accordance with approved plans and to be fit for occupation. A building without an Occupancy Certificate cannot be legally occupied. Municipal water and electricity connections may be affected. The buyer who purchases in a building without an OC is purchasing a property that may face regulatory action and that a future buyer with a home loan requirement may be unable to purchase from them.
Category Two: Minor’s property and the court permission that cannot be skipped:
Where property belongs wholly or partly to a minor, a guardian’s signature on a sale deed is not sufficient authority for the transfer.
Section 8 of the Hindu Minority and Guardianship Act, 1956 restricts a natural guardian from mortgaging, charging, selling, gifting, exchanging, or otherwise transferring any part of a minor’s immovable property without the previous permission of the court. A disposal made in contravention of this requirement is voidable at the instance of the minor upon attaining majority.
Dr. Sravan Kumar is specific about what this means for due diligence. The advocate must verify the court permission order, the property schedule mentioned in that order, the necessity or evident advantage shown to the court, the permitted sale consideration, and any direction regarding deposit of sale proceeds for the minor’s benefit. An order permitting sale of one property cannot be stretched to cover a different property, a different survey number, or a materially different transaction.
A buyer who proceeds without this scrutiny creates a future title risk because the minor may challenge the alienation after turning eighteen. The transaction may look clean at the time of purchase. It may unravel years later.
Category Three: Agricultural land and the restrictions that urban buyers miss:
In India’s rapidly urbanizing periphery, the distinction between agricultural land and land that has been legally converted for residential development is a distinction that buyers consistently fail to verify.
State land ceiling laws restrict the maximum area of agricultural land any person or family can hold. A purchase of ceiling-surplus land is void. Agricultural land in most states cannot be purchased by a person who is not an agriculturist under the applicable state law, and a purchase made in violation of this restriction is void from inception.
Gram Sabha land is public land vested in the Gram Sabha that cannot be transferred to private parties without lawful alienation through established processes. Scheduled Tribe protections under the Panchayats Extension to Scheduled Areas Act restrict the alienation of tribal land in scheduled areas without consent of the Gram Sabha, and in many states require state government permission.
A buyer who purchases agricultural land on the outskirts of a city without verifying land ceiling compliance, conversion from agricultural to residential use through proper government order, and the absence of Gram Sabha or tribal protections, has purchased a legal risk that no subsequent development can cure.
The Indian Law of Property Due Diligence and Title Examination by Dr. Sravan Kumar is available on Amazon, Flipkart, Kindle, and Google Books. Buy now and verify what the specific category of your property purchase actually requires before signing any agreement.
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