Buying an Inherited Property? Take These 8 Precautions
Purchasing property, especially in the resale market, can sometimes turn out to be a tricky deal. One such instance is when buying an inherited property, as it requires a higher level of scrutiny to ensure that everything is in order and to avoid potential fraud. Properties in the resale market often have legal complications, making it essential to double-check how the property passed from one owner to another. This is particularly crucial when buying inherited properties, as there may be unresolved issues surrounding the inheritance.
Here are eight vital safeguards to keep in mind when buying an inherited property:
1. Verify the Original Owner’s Details
- Ownership Confirmation: Ensure that the property’s original ownership is clear. Verify ownership by checking the original title documents through the sub-registrar’s office and any other documents related to how the property was acquired.
- Encumbrance Search: Conduct a thorough encumbrance search for the last 30 years to ensure there are no legal issues tied to the property. This search can be done at the sub-registrar or the concerned revenue authority’s office.
- Tax and Mutation Records: Ensure that property taxes have been paid and check the property’s mutation records to confirm the ownership.
- Death and Legal Heir Certificate: If the property was passed through inheritance, verify the death certificate and legal heir certificate issued by the relevant authority.
2. Check the Authenticity of Succession Documents
- Examine the Succession Certificate: The buyer should validate any succession certificate or related legal documents to avoid falling prey to counterfeit paperwork. It’s crucial to verify the authenticity of these documents and retain the original versions if possible.
- Confirm the Will’s Legitimacy: Ensure that the property was inherited through a legally binding will, and check if there are any challenges or competing wills that could complicate the transfer.
3. Insert an Indemnity Clause in the Sale Deed
- Protection Against Future Disputes: The buyer should consider including an indemnity clause in the sale deed. This clause ensures that in case of any future disputes regarding the inherited property, the seller will cover any potential losses.
- Additional Safeguard: If necessary, an indemnity bond can be executed in the court, providing further legal protection against unforeseen issues.
4. Include All Legal Heirs as Parties or Witnesses
- Ensure All Interested Parties Are Included: It’s important that all legal heirs of the original owner are included in the sale transaction, either as parties or as confirming witnesses to the sale deed.
- Legal Heir and Survivorship Certificates: These documents ensure that all rightful heirs are accounted for, and no one else can later claim a stake in the property.
- Witnessing the Transaction: If all legal heirs are witnesses to the sale, it prevents any future claims or disputes over the property, adding an extra layer of security for the buyer.
5. Pay Only a Minimum Token Money
- Avoid Overpaying: When it comes to token money, it’s essential to keep the amount to a minimum. This protects the buyer from having their money locked in case of any issues with the property title.
- Be Wary of High Token Money Requests: If the seller insists on a large token amount upfront, it may be a red flag. Sellers may rush to close deals if there are underlying issues with the property title.
6. Be Cautious When Paying Multiple Sellers
- Proportional Payment: In cases where multiple heirs are selling a property, it’s crucial to pay each seller according to their share of ownership. This helps avoid conflicts if one seller later claims they were underpaid.
- Check the Succession Certificate: Ensure that the share of each seller is clearly defined in the succession certificate or probate document.
7. Check for Any Pending Court Cases
- Legal Disputes: The buyer should check whether the property is embroiled in any court cases, as disputes could arise long after the transaction. Even if legal heirs are in agreement, other parties, such as creditors or external claimants, may file lawsuits.
- Example of Loan Disputes: There have been cases where deceased property owners had loans against the property, and creditors filed claims after the owner’s death. A buyer should hire a lawyer to verify that no such litigation exists against the property.
8. Consult with Legal Experts
- Legal Advice: Given the complexity of inherited properties, seeking guidance from a legal expert is highly recommended. A real estate lawyer can help review documents, verify ownership, and ensure that the transaction complies with all legal requirements.
In Conclusion When purchasing an inherited property, taking extra precautions is crucial to avoid legal issues or financial losses. By verifying ownership, checking the legitimacy of the inheritance process, and securing the transaction with an indemnity clause, you can protect yourself from future complications. Always ensure all legal heirs are accounted for, and avoid paying excessive token money or dealing with questionable sellers. By following these steps, you can reduce the risk of inheriting more problems than property.
