Prevention is better than cure is a good health-care concept that has been widely accepted. I would borrow the concept and would like my friends to consider for acceptance in legal matters too. Here are some important tips:
I. CHEQUE TRANSANCTIONS
1. Bouncing of cheque and non-payment of the cheque amount when demanded within the stipulated time would expose you to criminal prosecution for an offence under S.138 of the Negotiable Instruments Act. Simultaneously, the drawee of the cheque can prosecute you for recovery of the amount in a civil court. There is a statutory presumption against the drawer of the cheque that the cheque has been executed towards the discharge of a debt or legally enforceable liability.
2. You cannot present a cheque after six months of its valid execution.
3. Even if the cheque is dishonoured on its first presentment, it can be re-presented any time during the validity of the instrument.
4. If there are several bounced cheques issued by the same drawer and you are going to file complaints in a court or different courts, please mention the details of the similar complaints you have filed against the opposite party. As per the latest Supreme Court ruling, this information should be given by the Complainant as a mandatory requirement.
II. FLAT PURCHASE
1. Ask for certified copies of the original title deed and three prior title deeds from the owner of the land.
2. Ask for an authenticated sketch of the land having clear demarcation of boundaries.
3. Ask for non-encumbrance certificate of the land for the past 31 years (This is so, as the limitation period for the recovery of any debt due to the Government as land revenue is 30 years).
4. Ask for certified copy of the agreement between the owner of the land and the builder/developer.
5. Ask for certified copy of the building permission from the competent authority along with approved sketch and plan of the building.
6. Ask for the land revenue tax receipts.
7. Ask for completion and fitness certificate issued by competent engineer/authority.
8. Ask for the copy of the agreement the vendor wants you to execute and read the terms and conditions carefully.
9. Verify the descriptions such as the "plinth area"/"carpet area" of the built up space and the common area earmarked for all occupants and compare them with your particular requirements/necessity. Verify whether you have to pay additional sum for car/scooter parking facilities.
10. Verify whether the very same land/property is already under a mortgage to any financial institution/bank or offered as a security for any financial arrangement by owner/builder.
11. Verify the construction of the building has been done in compliance with all regulatory specifications and safety standards.
12. Make sure that the agreement contains that not only the building portion but also the undivided share of interest in the property is also conveyed to the buyer.
III. IMMOVABLE PROPERTY PURCHASE
Obtain and verify the following documents:
1. Three prior title deeds (including jenmom purchase deed)
2. Title deed
3. Authenticated sketch having clear boundary demarcations.
4. Non-encumbrance certificate. (For 31 years preferably)
5. Latest land revenue tax receipts.
6. If there is a building on the land, all the relevant documents (such as building permit, building tax receipt, sketch/plan, etc. along with the latest building tax receipts).
Examine whether
1. The buyer has road/pathway access for ingress and egress.
2. If there is a pathway, whether it can be used by the buyer as his/her own private right or easment right along with others.
3. If the pathway is to bought seperately from a third party, what is the amount that has to be paid and whether the third party is willing to transfer the property.
4. If the property is belonging to a particular person's share in the joint family property, whether all other co-sharers are willing to execute the sale deed transferring the piece of land to the buyer.
5. It is important to verify that the property does not belong to ecologically fragile area and the person who offers to sell the property is not barred by any law from transferring the property.
6. How much amount has to be paid as stamp duty and registration charges by the buyer?
III. OBTAINING LOANS FROM BANKS
1. Negotiate with at least 10 banks.
2. Request in writing the formalities to be complied by you for obtaining a loan.
3. Obtain the copies of the agreements you have to execute and read them.
4. Keep all documents in original and keep a recent valuation of the property prepared by a certified Chartered Engineer/Qualified/Approved Valuer.
5. Offer the security only necessary to cover your debt. (Banker's always try to secure more collateral securities than necessary to cover the debts)
6. Give full and correct cash flow statement to convince the banker how you are going to pay your debt.
7. Negotiate on fixed interest/floating interest with an eye on your short-term, mid-term, and long-term interest. (You can avail the help of a retired bank manager if needed).
8. Remember always that the SECURITIZATION AND DEBT RECOVERY LAWS give ample powers the banks and financial institutions and it is very easy for them to take possession of the properties and sell them and your options are very very limited in case of default in payment of your debt.
9. Guarantors must be doubly cautious that in case of any default by the borrower, they shall be proceeded against for the recovery of the amounts due to the banks/FIs as in the eye of law there is no distinction between the borrower and his guarantors.
10. Always keep a tab on your financial transactions with your creditors.
11. Always keep in mind your re-payment capacity.
Courtesy : www.mfgglobal.org
