PLOT Buyers

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Plot Buyer’s Guide

Here are some concerns that should be addressed before making an investment in a plotted development

Establish The Seller’s Identity

It is imperative to establish the identity of the seller before buying a landholding. Also, he nationality and residence certificate of the seller and whether the consent of the concerned authorities is required also needs to be checked. The identity of all the sellers needs to be ascertained if it is a joint property. If the seller is a company, then the it needs to be verified if it can own and sell a property. The necessary paperwork needs to be corroborated to avoid any hassles in the future

Conversion And Land Use Approvals

Although many State laws restrict the practice of the conversion of land from agricultural to non-agricultural use, the buyer must check the master plan of the city to ensure that the land parcel is in accordance with the zoning plans of the city by identifying the R zone / L zone of the finalized property before signing the deal.

Construction Approvals

Approvals issued by the city municipal body regarding the building and layout plans and by the government for amenities like water, electricity, sewage treatment and parks also need to be checked before going ahead with the purchase.

Title Deed

The buyer needs to check for a clear and unambiguous title deed (Article 7/12 in some States), for a smooth transaction. If in any doubt, it is always wise to consult a property attorney. Also make sure all duly stamped and registered at the sub registrar of assurances.

Give Due Consideration To The Locality

A thorough research about the future development plans of the locality is recommended. A sneak peek into the previous price trend of the locale will give a reasonably good idea about the expected gain of the investment you are planning to make. Infrastructure, proximity to nature, transportation – health- educational options available are a few other things to look at.

Have A Quick Checklist Ready Before Inking The Deed

Home buyers absolutely need to look for transparent transactions. Insist on getting the Occupation / completion Certificate from the developer after the project is complete. Also if the project has got the nod from leading home loan companies, it would definitely come in handy in getting quicker home loan approvals.

Release Certificate

Be aware that a plot purchased from the resale market may have been pledged to avail a loan from the bank. When a loan is repaid, the bank gives a release certificate. POrocure a copy of this certificate before going further.

Maintenance Issues

As a fixed yearly amount will go towards the annual maintenance of the basic amenities, make it a point to know these charges beforehand to avoid any surprises in the future.

Do Not Hurry

As buying land is a huge transaction, and an emotional decision too, do not believe whatever the salesperson says blindly. Always try to physically visit the property and then take the final decision.

Connectivity Issues

To enhance the resale value and the livability of the of the property, do enquire about the functional connectivity with buses, metro, and other means of commuting.

Physical Verification

Not just the documents, it is a wise idea to visit the property and carry out a physical inspection before making such a huge investment.

NA Order

In India, every piece of land is classified as agricultural land. So, if you are buying land for non-agricultural use, get hold of a “NA – Residential” order.

FSI Of The Plot

It refers to the floor space index i.e the ratio of the covered area allowed to be constructed to the total area of the plot.

Receipts Of Property Tax

To avoid any tax related issues, ask for tax receipts for the last six months to rule out any pending dues.

Encumbrance Certificate

This certificate verifies that there are no pending dues or litigation on the property and it is free from all legal dues.

Agricultural Land

It is earmarked for the use of agriculture and related activities. The rules and regulations vary for different states and as a substantial population is engaged in agriculture, there are restrictions in place too. State laws determine land ceilings and also how much land can be bought by an individual. Some states even bar outsiders from buying land in their sate.

Residential Plots

These are meant for the construction of houses. If the land was previously designated as agricultural and later changed to residential, the buyer needs necessary approvals from the concerned authorities which varies across states. Loans against residential plots are in fact eligible for relief under section 80C.

Commercial Plots

Are allocated for establishing offices, shops and different trades. Developed through shared ownership models, a group of investors come together to build a a plot. These generally are levied upon with a steeper government fee and taxes. It is imperative to find out whether the land has been zoned as commercial while purchasing a commercial property and also the FSI. As many commercial plots have to be developed as vertical structures, the zoning laws need to be studied thoroughly, especially if the land is in the vicinity of the airport as there might be certain restrictions on the height of the project. As commercial land is expensive, it is advisable to establish the funding requirements early on. Also, an application needs to be submitted to the concerned authorities (the District Collector in most cases) if there is any conversion of land from agricultural to commercial. In terms of taxation, it should be clear that there is no income tax benefit in the case of commercial plot loans. In fact, a fixed rate of 20% will be levied on the seller as capital gains tax at the time of sale of the plot. It is common practice for most local bodies to charge a higher property tax for a commercial property.

Institutional Plots

These are plots that reserved for specific purposes like setting up a college, maybe a school or even a company’s headquarters. A local government authority permits the sale or the transfer of such land pieces as per norms.

Industrial Plots

These are promoted by government bodies to promote industrial corridors in a given region. They mainly cater to logistics, factories, cold storage facilities etc. As industrial units might have an impact on the neighborhood, special permissions are needed to acquire a plot to set up an industry. Certain permissions are also required from an industry specific body to get the licenses to set up an industrial unit. As heavy vehicular movement is expected in such an area, due consideration is also given to the approach roads. What do the different land zones mean

Red Zone –

Are meant for dedicated services like schools, hospitals, places of worship or similar infrastructure developments. They cannot be developed as high rises and are also termed as semi – developmental lands.

Green Zone –

Is marked for open and green spaces. Can be used for horticultural development or for setting up plant nurseries.

Yellow Zone –

This is the land classified for mixed use development, both commercial (darker shade of yellow) and residential (lighter shade of yellow).

Blue Zone –

It indicates the commercial and retail spaces on a map. Darker shade denotes retail and hospitality spaces, the lighter shade marks the places where offices and business centers can be set up.

Grey Zone –

Designates the areas for establishing heavy industries and manufacturing units.

Purple Zone –

Also called violet zone in some places, represents factory establishments and general industries. A darker shade at times specifies technology-oriented industries.

Buying a large plot of land would be a huge financial dent for retail individuals, and therefore, it is not uncommon to see such people who have similar pool together resources to buy plots. When a group of people pool resources in this manner to purchase an asset or a property, it is called fractional ownership. These are passive investors who could not have afforded such a huge investment solely. This model not only helps mitigate risk, but also provides an opportunity to buy shares in various properties.
In India, land is marked into different color themed zones at the time of zoning. The following are the different colors used to denote specific land use in maps and master plans. As per the needs and goals of the investor, plots are divided into residential, commercial, agricultural, institutional and industrial

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Next to Wadeshwar restaurant, Baner Road, Pune 411045

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