Due diligence and verification of title
Due diligence and verification of title in a property law means assessing the risks associated with the property you are planning to buy and checking the validity of the title of the seller and pervious owners of the property. It is a step before buying a new property which every individual should take. This is usually done by a property lawyer in which he/she review all the documents and ensures that there are no legal encumbrances. This step safeguards the buyer from potential future litigations.
Things to check while conducting due diligence and title verification are-
- Ownership details – it is necessary to check whether the seller of the property is really the owner of the property or not. If he is not really the owner of the property it will lead to unnecessary legal disputes in the future.
- Chain of title – chain of title means the historical record of title of the property. In this title of all the previous owners is checked and is traced back to the original owner. If the link is broken in between then it advisable to not buy the property.
- Derivation of title – in this it is checked from where the seller of the property derived the title. The title is usually derived by sale or purchase, gift, will or inheritance, lease and partition.
- Nature of the right of the seller – in this it checked whether the seller is the absolute owner of the property or not. If his right is limited in the property then he cannot sell the property.
- Legal competency of the seller – in this it is checked whether the seller of the property is a major and of sound mind or not. If he is not a major or of sound mind then you will have to get the permission from the competent authority before buying the property.
- Nature of property and land use – in this the nature of the property is checked i.e., whether the property is government owned or privately owned, whether the property is agriculture land or non-agriculture land and whether the property is for residential purpose or for commercial purpose.
- Development and construction – if any construction or development was taken place in the property it must be checked whether that development and construction was done in accordance with all local construction rules or not.
- Encumbrances – the property should be free of all encumbrances such as mortgage, lien etc.
- Litigation – it is also important to check that there are no pending cases against the property in any court.
We here at Chaklan and Associates provide assistance in property disputes and ensure protection of your ownership / enjoyment rights over a property.
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