Importance of Due Diligence and Title Search before Property Purchase

Importance of Due Diligence and Title Search before Property Purchase

Due Diligence

Property purchase in India require significant amount of due diligence to ensure that what you are buying carries a perfect title and the property is free from any charge. As the cost involved in purchase is high, its always good that all property buyers get due diligence of property done by a qualified expert. We at are expert and have senior experienced professionals to provide you these services completely online and at affordable price.

In the article below we give you brief about the due-diligence and document review process, however, we recommend approaching an expert to get the documentation verified and you take a property title report to avoid any ownership issues at later stage.

due diligence

Due Diligence in respect of property is thorough Research and review of all the property papers before investing/ Buying/Selling/Leasing of a Property. It is a process where you are taking the necessary and reasonable steps and this may include, but is not limited to, conducting search in Registrar Office and reading through various Acts and Regulations.

It is recommended to approach an expert for due diligence

There are different aspects to Due Diligence and can depend upon the Type of Property, i.e, Ready to buy, under construction, Resale, Redeveloped Properties etc. The documents are to be reviews changes according to the property. There are many acts that come into force while buying/Selling of property such as, i.e Transfer Of Property Act, 1882, , Registration Act, 1908 and respective state laws (for example in Maharashtra Maharashtra Apartment Ownership Act, 1970, The MaharashtraƂ Co-Op Society Act, 1960) etc. Personal Laws also come under force in case of death of the owner and succession of the property. Here the documentation review and due diligence process gets complicated by oneself. A common man may not be aware of all these laws, and a transaction which looks simple can be invalid in the eyes of the law.

It is common for property purchaser to take opinion from individuals with vested interest, however, its important that the opinion is based on the documentation and through review of documentation, law and relevant regulations. Any wrong decision can risk the property ownership and loss of money invested in purchase of property.

Not everything that looks simple and fair is actually that way and the same can be trusted with someone who has experience. There are many things from which a legal adviser can protect you, when dealing in real estate transactions.

The type of due diligence of property depends on the following:

(i) the risk profile and objectives of the purchaser;

(ii) the type of property involved;

(iii) nature of the real estate transaction

(iv) the time frame for completion of the transaction; and

(v) whether the purchaser is looking at obtaining loan from Financial Instittution


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The purpose of due diligence and Title Search is to get answer on following questions :

(i) Is the seller is authorised owner and does he / she has rights to sell ?

(ii) Is the property is free from charges ?

(iii) What is the nature and restrictions on the use of the property?


Type of Due Diligence/ Title Search:

Depending upon the nature of the transaction, the property involved and the objective of the participants, a due diligence can be divided into two broad categories:

Full Search: A full search is usually done while giving a title certificate of the property in instances of sale/ resale/ long term lease transactions and for transactions that involve obtaining of financing by mortgaging the property in question. In a full search, the search regarding status of ownership of the property is generally conducted for a period preceding thirteen (30) years (or more) from the date on which the seller in question came to acquire the property.

It also includes a detailed search of all aspects relating to the history of that property such as the status of encumbrances over the property, the status of disputes relating to the property, the applicable regulations and the status of compliance of such applicable regulations relating to the property in question.

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Limited Search: A limited search is generally conducted in transactions where the property is taken on lease for a short term (usually under 13 years). In such instances, the period for which the preceding ownership of the property is traced is generally restricted to fifteen (15) years (or less) from the date on which the current owner of the property came to acquire the property.

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