Selling property on certified property docs--Risks?

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I am a real estate agent.

Many times we come across properties whose original documents are not with the sellers,they generally say that these are lost & present certified copies of the same.

We treat certified docs as originals and sell such properties but banks generally do not finance such deals.

The seller might be telling a lie, he might have mortgaged the original docs or have indulged in some kind of deal of that property with some one else.

Is it right for us to sell such properties--the seller may be truthful also--what is the best legal way out so that no risk should remain for the hard earned money of the purchasers?

Expert : Parveen Kr. Aggarwal

Posted On

19 January 2011

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It is not right and very risky to enter into such transaction for purchase of properties.

In case it is absolutely necessary to enter into such transactions of purchase then, the seller may be asked to get a DDR recorded at the concerned police station regarding loss of original documents and also to get a public notice published in the newspapers in wide circulation in the area to the effect that the seller has lost the original documents of title of the property and that he selling the property to the buyer owning all the responsibilities for indemnification of losses to the buyer as a result of such transaction.

Expert : Devajyoti Barman

Posted On

19 January 2011

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There is never a fool proof way to counter that possibilitites. The only defence is the recital in deed whereby the seller undertakes to indemnify the purchaser in the event the property under sale does not turn out to be free from all encumbrances. Giving a paper publication before execution of the sale should not be failed to be done.

Expert : malipeddi jaggarao

Posted On

21 January 2011

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Mr.Barman is right in commenting that there is never a fool proof way to counter the difficulties in such deals. Paper Publication also will not come to the buyer's rescue many times. Examination of Encumberance Certificate also of no use as it will reflect only the transactions relating to the transfer of interest in the property by registration. In many cases the title deeds might be lying with some Bank under equitable mortgage. Transactions where title documents are totally not available as in the case agricultural lands coming into the hands of the sellers as ancestral property and his ownership is recorded in the revenue records are less dangerous than the transactions based on certified copies. Hence better to avoid such transactions. Many such cases turn as misreprentations.