Active in real estate since 2012, I often have the opportunity to observe very common scams that can have harmful consequences for buyers who wish to invest in the property at the best possible conditions.
The sale and purchase of a property, whether it is a villa, a village house or an apartment, is a source of stress, anxiety and concern. And one of the most common fears of an owner who wishes to sell or a buyer wishing to buy a property is the apprehension of being ripped off.
Specially in Pakistan, the number of housing schemes launched in the last decade has given an opportunity to scammers to loot the hard earned money of investors, home owners, and potential buyers. In this blog, I will tell you all the steps on how to verify the documents of a property you’re willing to invest in or buy for your personal use.
Table of Content
- Sales Deed
- Mother Deed
- No Objection Certificate
- Bank Approval Certificates
- Encumbrance Certificates
- Power of Attorney
- Property Tax Receipt
- Project Completion Certificate
- Nugsol Online Property Verification
List of Property Documents/ Papers to be Verified:
Before you take the final decision to invest in the property, or buy your own home, apartment, or land, make sure to verify all the documents listed below of the said property. These documents are important to verify if the seller has the right to sell the property, selling the right property, all documents are present, and the property is not involved in any kind of litigation or dispute.
Sales deed is the most important document and is compulsory for buying any property in Pakistan. It’s an agreement between the seller and buyer of the property and contains all the crucial information and term and conditions regarding the agreement between the two parties. The sale deed is a document that cannot be acquired without a thorough evaluation by the authorities, so it can be used as proof of legitimacy. Many people confuse sales deed with a sales agreement. However, both of these documents differ considerably from each other.
Tracking a property's ownership is crucial when purchasing or selling real estate. Since ownership changes every time a property is bought or sold, a mother deed provides a record of every property transaction and list of owners. In addition, this document will help you identify the original owner of the property. In case a mother deed is missing, the seller needs to acquire certified copies from respective registered authorities.
No Objection Certificate (NOC)
It is extremely important for every investor or buyer of real estate to have a NOC for the property. NOC from the relevant legal authority like Capital Development Authority (CDA), Karachi Development Authority(KDA), Lahore Development Authority (LDA) or Rawalpindi Development Authority (RDA) ensures the safety of the buyer.
Similarly, an investment can be more secure if the layout plans of a commercial or residential project are approved by the relevant development authorities.
Bank Approval Certificate
The bank approval certificate is provided when you apply for a home financing scheme offered by many banks in Pakistan. The certificate, which is one of the most important property documents in Pakistan, is issued by a bank after a property has been scrutinized and checked for legality issues, in accordance with the local construction laws.
In an encumbrance certificate, the history of mortgages and home loans is recorded. A final deal can only be made once all mortgages and home loans have been financed and paid in full. Encumbrance certificates provide information on all due transactions and monetary issues. A sub-registrar's office in Pakistan can provide you with a certificate for the property you are going to buy.
Power of Attorney
A power of attorney gives another person the right to manage or sell a property on your behalf. To address property issues, the owner can transfer these rights to a third party.
The Pakistan embassy and ministry of foreign affairs require a power of attorney before you can buy a property. Pakistanis living overseas are given special rights to manage their properties in Pakistan.
In Pakistan, there are two types of power of attorney: general and special. A general power of attorney permits the owner to appoint a third party to handle all property matters on their behalf. Special powers of attorney, however, grant a person certain privileges to manage a property.
Property Tax Receipts
Clearing all property tax dues is an essential step in the property transaction process, as it relieves you from paying the taxes you owe to the Federal Board of Revenue. If you request all the property tax documents from the seller or owner, you will have all the information at your disposal. Alternatively, you can contact the Federal Board of Revenues (FBR).
Project Completion Certificate
Among the most crucial property documents is the document proving the completion of a project, which is issued by property developers. In this certificate, local city governments and development authorities certify that the property was built in accordance with their principles and standards.
Online Property Verification:
In the digitized era, there are several methods for verifying property online. Punjab and Sindh have implemented online property verification systems, streamlining the process of verifying real estate documents. Additionally, there are a few private companies like Nugsol that provide services for verifying property ownership in newer housing societies.
Nugsol Property Verification
Nugsol is a private company that provides a variety of property solutions. One of the company's most prominent services is the online property verification system, which verifies any property in Pakistan upon request.
With the market for real estate becoming increasingly digital and the internet, a variety of methods to verify the authenticity of property are now accessible online. Provincial governments in Punjab as well as Sindh have introduced the online verification of property that streamline the process of authenticating real estate documents.
Additionally, several private firms offer services for property verification that could be helpful in verifying the status of newly constructed homes and housing societies. The property verification system online was created to assist purchasers make the best choices when navigating the nation's real property market.
The verification system examines the records and registrations for the property including plans for layout, the plot LOP approval status and the final design plan of the property. In light of the increasing amount of frauds within the real estate sector the verification of property has become the top priority. There are a variety of methods available to verify real estate documents easily, from standard ways to digital verification. These verification techniques can help you in navigating the market for real estate in the Pakistan.