The greatest investment people choose to make in their whole life is to owe their dream home. However, a little ignorance while buying your house could entangle you in a life-long legal battle. To avoid any such dispute that you might get into in future, know about the two most important documents you must obtain from your seller before paying them the complete amount.
In the process of buying a leased property, the No Objection Certificate and the Transfer Memorandum are two most important legal documents. The NOC and TM prevent you from getting caught into any dishonest transaction and ensure safety as well as provide complete ownership of the property.
WHAT IS NOC?
It is a No Objection Certificate that certifies that there are no dues on the property and that the property is marketable. The sub-registrar's office provides the NOC to the seller when the sale deed is registered.
WHAT IS TRANSFER MEMORANDUM?
In simple words, TM acts as the official permission granted by the development authorities to the seller to transfer his ownership rights to the buyer and get the property registered.
WHY ARE TM & NOC NECESSARY?
Let us understand the concept of a leased property. There are two parts of a property: the land and the asset built on the land. In India, the development authorities hold the permanent ownership of the land. However, they provide land development rights to the developers permitting them to construct and sell residential units for a lease of 99 years.
So, if a person buys a flat in a residential or a commercial project, he holds the ownership of the flat only for 99 years while the authority continues to remain its permanent owner. However, the property usually gets renewed once the term is over and practically the person becomes its owner yet again.
Therefore, while purchasing a leasehold property, it is of utmost importance to get the property registered in your name. This is to establish your interest/ownership in the property. The application of TM Charges seem to be an additional expense while buying a property whereas this little additional expense could be of great advantage in a long run. The availability of Transfer Memorandum before the registry ensures that you are safe from any kind of fraud involved. Multiple Duplicate Registries could be done for the same property but by retaining the TM and the NOC, you get the ownership of flat verified through a reliable source i.e. the Development Authority.
WHAT IS THE PROCESS TO OBTAIN TM?
Once the negotiation for a property is done with the buyer, the seller needs to file an application to the revenue officer in the development authority office requesting permission to sell or transfer the property. He needs to submit copies of the Registry and a no-objection certificate from the residents’ welfare association along with the application form. The application will also mention the name of the buyer of his property, address of the property, his current address and the most probable transfer date.
APPLICATION CHARGES
To process the permission, the seller needs to deposit a sum of Rupees 1,000 as a processing fee. Meanwhile, if the seller doesn’t want to go through the process himself, he can take help of a property lawyer or the broker. However, for this he needs to spend an amount of Rupees 2,000-5,000.
TIME TAKEN
Around 10-15 days are taken by the authority to verify details and authenticity of the seller and the buyer. After verification, the officer grants permission to the seller to sell the property. It is to be noted that the transfer should be conducted within 60 days from the date the authority permits the sale/transfer. If the party involved fails to complete the transaction within this time frame, the seller will have to file a fresh application.
TM CHARGES