Legal Due Diligence Checklist
Legal Checks — Every Property Purchase
- Encumbrance Certificate (30 years): No mortgage, litigation, or encumbrances on property
- Title chain: Complete unbroken chain of sale deeds from original owner to current seller
- Mutation/Khata: Municipal records in seller's name — matches sale deed
- Property tax receipts: All paid to date, in seller's name
- Occupancy Certificate: Building has OC — confirms legal occupation and GST exemption on resale
- Building plan approval: Sanctioned plan — confirm actual construction matches approved plan
- CERSAI check: No existing mortgage registered at Central Registry
- Court search: No pending litigation or attachment orders on property
- Land use: Residential zone confirmed — not agricultural or restricted land
RERA and New Project Checklist
For Under-Construction / New Project Purchases
- RERA registration number: Verify on state RERA portal — project must be registered
- Builder track record: Check past projects on RERA portal — delivery history, complaints, penalties
- Escrow bank: Confirm 70% of your payments go to designated escrow account
- Approved plan: Download approved plan from RERA portal — matches brochure?
- RERA possession date: Note registered possession date — basis for delay interest claim
- Financial health of builder: Check for NCLT proceedings, bank NPA declarations
Financial & Tax Checklist
Financial Due Diligence
- Market value verification: Compare registered price with Sub-Registrar data for comparables
- Society dues: No Dues Certificate from society — maintenance, sinking fund, levies all clear
- Outstanding utility bills: Electricity, water, gas — no pending dues to be inherited
- TDS compliance: If price ≥₹50L — plan Form 26QB TDS deduction at time of payment
- PAN of seller: Mandatory for TDS computation — without PAN, 20% TDS applies
- Home loan pre-approval: Get bank sanction letter before committing to purchase
Related Terms
Frequently Asked Questions
Property due diligence is the comprehensive verification process before buying — covering legal title (EC, title chain, OC, mutation), financial aspects (market value, society dues, TDS), regulatory compliance (RERA, layout approval, zoning), and physical condition (home inspection, structural audit). It protects buyers from inheriting title defects, undisclosed debts, and illegal construction.
Essential checks: (1) Encumbrance Certificate for 30 years — no encumbrances, (2) Complete title chain — all sale deeds, (3) Occupancy Certificate — legal occupation proof, (4) Mutation/Khata in seller's name, (5) Property tax receipts — current, (6) CERSAI search — no existing mortgage, (7) Building plan approval — matches actual construction, (8) Court search — no litigation, (9) No Dues Certificate from society.
Thorough due diligence typically takes 2–4 weeks. EC from Sub-Registrar: 3–5 days. Title search by lawyer: 5–10 days. CERSAI search: same day online. Court search: 3–7 days. Society NOC: 7–15 days. Home inspection: 1–2 days. Structural audit report (for older buildings): 1–2 weeks. Budget this time before signing the buyer-seller agreement or making significant payment.
For resale property: Encumbrance Certificate — it reveals all registered encumbrances including mortgages. For new project: RERA registration and builder track record — check on state RERA portal. For plots: land use/zoning verification and revenue record classification. All are critical — but the EC is the single most informative document for resale and the RERA portal is the most informative for new projects.
Yes — strongly recommended. A property lawyer does things you cannot easily do yourself: interpret EC entries and identify ambiguous encumbrances, read court records for pending litigation, verify title chain continuity, interpret building plan approvals, and advise on state-specific legal risks. For a ₹50 lakh+ transaction, a lawyer's fee of ₹10,000–₹30,000 is the best insurance you can buy.