Planning to Build a House in India?
A house is permanent. It is a status symbol. It is protection and security. Home is where the heart is. If you have decided to build a house in India, it’s great!
It’s not a surprising fact that almost everyone, when they have saved up a considerable sum of money, chooses to invest it on building or buying a house. It is understood, because a house is an asset. You can turn a house into your home, a sanctuary for your parents, a place of love and dreams for your spouse and the childhood playground for your children. You can turn it into a secondary income by renting it out. The possibilities are many.
Unfortunately, building a house is not as simple as talking (or in my case, writing) about it. There are certain rules and regulations you need to follow. Documents you need to possess, procure or furnish. But it does not have to be quite a hassle. Because we’re here for you.
Are you an NRI? There are a few set of rules that apply to you specifically, when you purchase property in India. Here’s all you need to know: Types of Properties an NRI Is Eligible to Buy in India
This article is going to tell you all the basic requirements to follow when you construct a house in India
We can split down your dream process into the following main sub-processes:
- Buying of the land
- Construction of the house
- Occupation certificate
We have covered a complete list of documents needed to build a house in India in another article in order to keep this process structured. You can find that list here: Documents You Need When Buying a House in India [Complete List]
1. Buying of land to construct a house
If only a house could float on dreams. Step one is buying the land on which to build your house. The documents you need are:
- Mother document: As you have probably guessed it, this is the mamma of all the documents. It consists of details of the original owner of the house i.e. the first official authentic owner of the house.
- Latest RTC: RTC stands for Record of Rights, Tenancy and crops. It contains details of land such as owners’ details, area, assessment, water rate, soil type, nature of possession of the land, liabilities, tenancy and crops grown, etc.
- Encumbrance Certificate: Encumbrance certificate or EC is a certificate of assurance that the property in question is free from any legal or monetary liability such as a mortgage or an un-cleared loan. EC is highly important to ensure high legal title over the property as well as to be eligible to obtain loans from most banks and financial institutions for or against the property.
- Taxes: Property tax is an annual amount paid by a property/land owner to the government. This tax could be paid either to the local state government or Municipal Corporation depending on the government policies. Please ask for the updated corporation tax payments if you do not want to bear the expenses of the previous years’ taxes.
Once you have arranged for and complied to all the above documents, submit them to a civil lawyer and take a legal opinion to clarify any problems that are too random for us to explain here. The civil lawyer waves a green flag if all the norms are met and this will allow you to process the sale deed i.e. registration of the property, involving the payment of registration fees and stamp duty.
2. Construction of a house
Urban Development Corporation (for city limits) and Mandal Panchayat (for rural areas) need to provide an approval for you to construct your “Casa”.
This appeal by you needs to be backed up with a sale deed, khatha (city limits)/ 10*11 (rural limits), conversion certificate… Calm down! I’m gonna tell you what it is. Don’t start worrying just yet.
So, in the mother document, there should be a clear mention if the agricultural land has been converted into residential form. And finally, blue print (layout of the house).
Once these documents have been submitted to the city corporation or mandal panchayat, they will be handed over to the surveyor.
The surveyor will inspect the plot for compatibility (sketch of the site for set-backs as per Urban Development Authority sketch).
If the above is satisfying the norms, a fixed amount of money has to be paid to the concerned authority and they will then issue commencement certificate which is a legal permission to start construction.
3. Occupation certificate
Occupation certificate is mainly an access to electricity and water for your house from the concerned authority.
The following are the criteria to receive an occupation certificate:
- Completion certificate issued by an engineer:
A government representative engineer will visit the house confirming its successful construction.
- The surveyor will again visit to check site management as per Urban Development Authority approval.
If all goes well in the above considerations, the occupation certificate will be awarded to the owner of the house.
Note: If the house is more than 15 meters in height, then a post inspection NOC has to be issued by the Fire Department, towards the owner, stating that its deemed fit for OC. (Set back has to be more in this case since the height of the house is more)
Now that all the formalities have been satisfied, the owner gains total rights over the house and is free to either occupy it for himself or to rent it out.
“Home Sweet Home”. The beauty of home resides, not just in the hours spent on designing and imagining your castle and making sure that every brick is in its place, but more importantly in all the beautiful lives that have lived. Home is where your story begins…
If you are buying flat instead
If you do not want to get involved in the cumbersome process of construction and simply would like to buy an apartment, then most of the formalities will already have been taken care of by the builder. The few pending responsibilities would be:
- Registration of the apartment
- Process of making Khatha
- Acquiring door number and electricity meter
I hope I’ve covered all there is to say. If you feel I have missed a point or made an error, please drop in a message. You can through the form on this page (go all the way to the top). I will make sure to make necessary corrections.
Already own a house in India? If you’re facing issues with managing it, consider hiring a property management company. Here’s a good read to get you started: