Before you get into real estate in India
Research is a crucial step in making a wise real estate investment decision. However, if you are a first-time property investor in India, it is imperative that you understand a few important terms to yield the best results out of your research. We have compiled a list of real estate jargons to assist you to understand the nuances of buying a property in India.
It is the primary upfront amount paid to the seller/developer when buying a property. A token of assurance and confirmation from the buyer’s side, the down payment amount is typically 10-15 per cent of the total property value. When buying a property, scrutinise the purchase agreement to ensure that the down payment is refundable if the deal is cancelled or delayed infinitely.
It is essential for any property transaction. A clear title indicates that the property you are looking to buy is free of any kind of legal claims, encumbrances or litigations.
When more than two people own a property, then the property is said to be co-owned, and the status of the property is known as co-ownership.
A property deed is a legal document that specifies the property and lists the previous and present owner of the said property.
The amortisation schedule is an EMI breakdown of principal and interest amount throughout a home loan period of tenure. The schedule varies depending on the payment plan chosen by you at the time of taking the loan.
This term describes the growth in the property value over time, taking appropriate indexation into account. Real Estate appreciation is majorly influenced by the current economy, market scenario, and inflation also.
Common areas are spaces or amenities meant for general use by the property owners or people residing in the society. Initially taken care of by the developer, building societies start collecting a monthly maintenance fee from the owners/residents, eventually.
It is the actual usable area on which a carpet can be laid, and it does not include the cumulative wall thickness of the property.
The built-up area is the actual unit size and is a sum of the carpet area and wall thickness. The common areas are not included under built-up area.
It is good to be careful of benami ownerships when making a property transaction as the actual owner does not hold the title deed of such property. Not only are benami ownerships illegal but are also risky as there are no laws that can safeguard your ownership of the property in India.
Encroachment of property entails any sort of physical intrusion. It could be a gradual or sudden intrusion and takeover by the construction of a structure or crossing over into someone else’s property in India.
Being familiar with the terms listed above can go a long way in helping you make informed decisions regarding real estate and especially buying property in India. As a law firm, we advise our client to take legal assistance from a professional lawyer to understand the terminology of real estate in India.