Considering buying a flat in Bangalore? Read this blog post to learn about the key points to consider, such as location, builder reputation, legal documentation, amenities, budget, future development plans, resale value, quality of construction, reputation of the neighborhood, and the importance of legal assistance. Make an informed decision and find the perfect flat that meets your requirements and preferences in Bangalore’s booming real estate market.
Buying a flat in Bangalore can be an exciting yet overwhelming experience. With its booming real estate market and numerous options available, it’s important to be well-informed before making such a significant investment. Whether you’re a first-time buyer or an experienced investor, here are some key points to consider when purchasing a flat in Bangalore.
In general, flats are bought under two circumstances
- Under construction property
- Ready to move in property
The buying procedure is slightly different for under-construction and ready-to-move-in properties. Let me explain the procedure in a systematic way from under construction to ready to move-in.
Under construction property:
It’s very important to verify the land document before we make a booking amount for the under-construction property. Generally, the booking amount ranges from 5–20%.
Some unethical builders or sellers support document verification only after the booking amount is paid. Kindly hold and never initiate transactions unless the documents are verified.
General land verification goes as below
- RTC Extract: (Land record) RTC stands for Record of Rights, Tenancy, and Crop Information. RTC contains the details of,
- Survey number
- Landowners details
- Type of land
- Area of measurement
- Water rate
- Soil type
- Agricultural, commercial, and nonagricultural residential flood area
- Land conversion details
- Nature of Possession of the Land
- Liabilities
- Tenancy
- Crops grown
Extract the RTC from Bhoomi Online service https://rtc.karnataka.gov.in/Service78/, it costs you Rs. 10/- to download an RTC extract.
Please note: It’s advisable to extract a few important documents directly from the government server instead of depending on the seller or builder. Chances that a few unprofessional sellers or builders may tamper or duplicate the document. Do your extract of important documents,
An RTC looks like the below image,
2. Encumbrance certificate (for land): An encumbrance certificate is a certificate issued by the sub-register office of the revenue department. An encumbrance certificate is popularly known as EC. An EC helps to verify,
- Mortgage liability
- Court attachment
- Ownership
- Property schedule
- Registration date and allotment number
- Market price and consideration price
- Deed type (Acquired through a sale deed, gift deed, or inherited)
- History of registered transactions & ownerships
If the land has been encumbered with court attachment, the property has no marketing title and cannot be entitled to sell.
If the property has not been encumbered, it has a clear marketing title to sell, buy, and build an apartment.
The encumbrance certificate is usually issued in 2 forms: Form 15 or Form 16
Form 15: is issued when the property has any encumbrance during the said period, The Nature of encumbrance could be gift, partition, loan, lease, legality, and parties involved in dispute.
Form 16: is issued when the property doesn’t have any encumbrance during the said period. Also, known as NIL ENCUMBRANCE CERTIFICATE (NEC). Having a clear marketing title to build.
An encumbrance certificate looks like the below image,
An EC consists of 9 columns, refer to the below image for the description of each column
You can extract the EC from Kaveri Online Services https://kaverionline.karnataka.gov.in/ at the cost of Rs. 40/- per EC.
3. Property Tax receipt: A property tax receipt, contain the details of,
- Tax payment (Amount and date of payment)
- Ownership details
- Property schedule
- Application Number
- Ward number
- Khata number
The property tax receipt looks like the below image.
We can extract the property tax receipt from https://bbmptax.karnataka.gov.in/ at no cost. It’s free to extract property tax. You need a PID number or application number to extract tax-paid receipts.
4. Khata Certificate & extract: Khata is the recording of one’s property in the books of the Government (here BBMP).
When one registers a Sale Deed in the sub-register office, it is just an agreement between the seller and the buyer but when the Khata (of the property) is registered/transferred to one’s name, it means the property is in the current owner’s name in the government books.
This also identifies the person/persons (on whose names the Khata is registered or transferred) Registered person(s) are primarily responsible for paying the tax.
- Khata certificate & extract contains the details of,
- Khata Number
- Ownership
- Khata transfer fee
A Khata certificate & extract looks like the below image,
Page 1
Page 2:
Page 3:
Khata can be extracted through Sakala online services Registration Page
5. Landowner and builder agreement (if joint venture): If the project is a joint venture between landowner and builder. It’s important to go through the joint venture agreement to understand the responsibility of landowners and builders.
The main intention of going through the joint venture agreement is to understand the feasibility & possibility of the partnership better for the landowner and builder.
If there is trouble in joining a venture, A project may halt for some duration of time till the issue gets resolved among landowners and builders.
A joint venture agreement must be a registered agreement.
6. Building approval plan: Approval Plan from BIAPPA/BDA is necessary. Approval is provided based on the regulation of residential land, basic utilities, and safety in place. Should not be an issue to construct a residential building here.
7. Floor plan: Helps clearer visuals of the entire property. Buyers can use a floor plan alongside photos to understand the layout and space of the house. A clean floor plan shows the true size and potential of every room
At the time of booking
8. Agreement of SALE: It’s important to execute an “agreement of sale” on or before making the booking amount to the seller or builder. This is the promissory document that the seller or builder has agreed to sell the property in a future date, subject to the terms & conditions mentioned in the sale agreement.
Stamp duty: 0.1% of consideration value or market value, whichever is higher. Paying 0.1% stamp duty is important for loan documentation.
Stamp duty can be paid in the form of e-stamping or franking.
At the time of project completion
9. Completion Certificate: A completion certificate is issued by the Municipal Corporation once the project is completed as per the approved layout plan.
10. Occupancy Certificate: is also issued by the Municipal Corporation after ensuring that basic amenities like Electricity Connection, Water Supply, and Sewage Connection are provided as per the approved plan.
At the time of Possession
11. Sale Deed Registration: Once the project is complete in all respects and has received Completion and Occupancy Certificates from BBMP, the Builder shall transfer the property in your name by executing a Sale Deed that will be registered at the respective sub-register office.
A Sale Deed is an important document of ownership, it should be retained safely. In case, you have taken a home loan, the original copy of the Sale Deed may be retained by Bank till the loan repayment
To boost the real estate sentiment in the State, the Karnataka government has announced a cut in the stamp duty rate on properties priced below Rs 20 lakh and between Rs. 21 -35 lakh.
The announcement was made on 27th May 2020 during the COVID-19 pandemic.
The rate cut is focusing on affordable housing. The rate remains the same as before for premium housing that is valued at more than Rs. 35 Lakh.
The below table describes the latest stamp duty and registration charges,
0.5% cess charge applicable across all the segments of affordable and premium housing.
The stamp duty & registration charge calculation goes as below
Example 1: The purchase price is Rs. 20 Lakh,
- Stamp duty: 20,00,000*2% = Rs.40,000/- (DD on the name of respective sub-register office)
- Registration charge: 20,00,000*1% = Rs.20,000/- (DD on the name of respective sub-register office)
- Cess: 20,00,000*0.5% = Rs.10,000/- (DD on the name of respective sub-register office)
Example 2: The purchase price is Rs. 35 Lakh,
- Stamp duty : 35,00,000*3% = Rs. 1,05,000/- (DD on the name of respective sub-register office)
- Registration charge: 35,00,000*1% = Rs.35,000/- (DD on the name of respective sub-register office)
- Cess: 35,00,000*0.5% = Rs.17500/- (DD on the name of respective sub-register office)
Example 3: The purchase price is Rs. 80 Lakh,
- Stamp duty : 80,00,000*5% = Rs. 4,00,000/- (DD on the name of respective sub-register office)
- Registration charge: 80,00,000*1% = Rs.80,000/- (DD on the name of respective sub-register office)
- Cess: 80,00,000*0.5% = Rs.40000/- (DD on the name of respective sub-register office)
Note: 0.1% of the stamp duty in the sale agreement, can be offset at the time of sale deed registration. Avoid double payment.
You should carry the following documents at the time of sale deed registration.
- Sale agreement
- Property tax receipt
- Khata certificate & extract
- Adhara ( Preferably link your mobile number for digital signing – It’s easy & convenient at the time of registration)
12. Possession Letter: Once the sale Deed is registered in your name, the builder will give you a possession letter after handing over physical possession of the property.
13. Allotment letter: The Builder will provide the allotment letter for parking space.
Below are a few points to be considered while buying a flat in Bangalore.
- Avoid choosing the property next to STP, recycling plant, garbage dumping spot, graveyard, highway, railway track, and polluting industry. Stay away from pollution for cause of your health & well being.
- Visit the project history of the builder and check the quality of the construction
- The flat should have natural light and decent air circulation.
- Avoid 100% self-financing. Prefer bank loan, loan helps to control your cash flow. The bank supports document verification besides offering loans.
- Avoid verbal agreement and verbal promises from the seller. Keep all the possible terms & conditions in the sale agreement till the sale deed execution
- As you know real estate market is not fixed. we need strong negotiation skills to bring down the price.
- Keep the booking amount as low as possible. Release the rest of the amount only after you get confident about the project’s progress. Avoid complete settlement in advance. Make the payment in installments as the project progresses.
- Under-construction properties are paid based on the progress of the project. like on-booking. 10%, Basement 10%, 1st floor, 10%, 5th floor 10%, plastering, finishing and registration. Release the fund slowly as the project progress.
- Keep the record of payment. Avoid cash. Make payment through online, cheque or DD
- Franking of sale agreement is mandatory to opt for bank loan.
- Franking your agreement gives you better legal stand in case fail in delivery of possession, deal cancellation, delay possession by seller.
- If the agreement is signed by the GPA holder, collect the registered GPA from the seller for cross-verification.
- Keep the eye on penalty clause in sale agreement. if delay in payment. Most seller demand at-least 18%.
- What is sale agreement says, if builder delay in delivering the possession.
- What is in sale agreement, if buyer cancels the deal? Most seller deducts at least Rs. 1.5 Lakh or 10% of booking amount as liquidated damage. The Balance amount will be initiated only after the schedule property sold to other prospective buyer. Refund process is time-consuming and losing bank interest for buyer. (Try to modify this clause on your favor)
16.Most seller allows the property registration only after the complete payment that includes consideration price + parking charge + administrative charge if applicable + corpus fund if applicable + 3 years maintenance cost in advance + Utility implementation charges if applicable ( electric meter + bore-well +STP + water recycling + water softener etc..
17. Most seller provides only bore well water facility. At later stage, if owners association decided to access Cauvery water connection, each flat owner may suppose to contribute around Rs. 45,000/- per flat for cauvery water connectivity.
18. Buyer may spend another Rs. 10,000 for property tax application, khata transfer application, name change at electricity bill
19. Additional cost applicable for modification. The modification should be informed well in advance at the time of slab construction. Seller will not permit buyer to do modification on his/her own or modification should be done with permission of builder.
20. Most builders monopolies the interior contractor but you can take a call with price & quality competitive vendor after the sale deed is done.
21. You may not able to choose your parking space. Parking space is allotted by the builder. You should be lucky if no water or STP pipe running just above your parking space or there might be occasional water dripping from pipe. which might spoil the place and vehicle due to constant dripping. (Keep note of this point and inform the seller about your preferred parking spot at the time of paying booking amount itself)
22. Avoid parking space just above the underground water tank or STP. Such parking spot are very dangerous and not authorized to allot such space for parking
23.Hidden charges:
- Most builders charge administrative fees of at least Rs. 50,000/-. I really don’t understand why most builders charge an administrative fees of Rs. 50,000/- when the buyer itself pays for all the paperwork of stamp duty and registration charge.
- Most builders charge the non-refundable corpus fund of at-least Rs. 50,000/-. apart from 1st 3 years of maintenance cost in advance. Maintenance cost roughly around Rs.3.5 per sq.ft.
For example, if your flat size is 1000 Sq.ft. you need to pay Rs. 1,26,000/- as 3 years maintenance cost on or before registering the property
24. Be aware of your taxation. If the consideration value is more than Rs. 50 lakh. Buyer should pay TDS. TDS is 1% of considerable value. Pay TDS on time to avoid late payment fee. Most sellers are least bothered to discuss taxation part. Take interest and clear your tax on-time.
25. Get the property inspected by professional before you get the possession from seller. Make sure the tiles, kitchen granite, piping, wiring, switchboards, and doors are fitted well.
No seepage, no wall cracked and decently painted. Seller may not care to address the issue once after the possession letter is signed by you.
We provide the service of document verification
We provide the service “sale agreement” drafting + execution + arranging seller & buyer signature + franking + home delivered
We provide the service of sale deed drafting + execution + home delivered.
To avail for our service assistance, please whatsapp +91 9380993789
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