Legal Due Diligence: Important Legal Checklist For Buying a Property

Buying a Property

We all dream of owning our own property, with many preferring to invest and purchase inland directly. A Land is actually one of the most major cost components among all real estate purchases, also having higher rates of return compared to different property types. Besides this, land allows you more freedom of choice when constructing your dream home or property, from the layout down to the floor plans and design.

But before you actually purchase your chosen land, there are a lot of things to consider, specifically the legal matters. You have to do thorough due diligence during the purchasing process! But how does legal due diligence work?

Read on as I show you what you need to know on due diligence, as well as the legal checklist before you purchase a land or any property for the matter.

Checklist for Due Diligence When Buying Properties

Legal due diligence is an investigation into businesses and individuals, viewing all documents and interviewing those connected with the property. It’s completed when the investor (that’s you!) is interested to invest in a particular business or property.


Through due diligence, you’re ensuring that what you’re investing in is beneficial and without any legal matters or liabilities in the future. Make sure that during the land purchasing process, you check with all these documents to prove legitimacy:

  1. Sale and Mother Deed

Sale deed is the MAIN legal document which acts as the proof of sale and transfer of ownership. This is registered and should be executed and checked for terms and conditions that both seller and buyer after with. Make sure that the property has a clean title without any extra charges.

Look into the Mower Deed or parent document traces the origin of ownership of the property. This helps in selling the property in the future. It also has a change of ownership, with records of previous ownership and the like.

  • Building Approval Plan

This is sanctioned by the local development authorities, which allows one to construct establishments or houses on that particular property. It includes all details such as how many stories you can build and the overall size, basing it on plot depth, road width, zonal classifications, among other aspects. This ensures that you’re able to build on top of that land.

  • Commencement or Conversion Certificate

A Commencement Certificate is required for properties under construction, which is issued by your local authorities. It states that the land and construction meets their criteria to prevent any levy penalties or eviction notices.

Conversion Certificates are for agricultural lands, to turn into non-agricultural properties. This is issued by the revenue authority for proper property usage.

  • Encumbrance Certificate

This refers to any liabilities or changes in ownership held against lions as security. It includes all registered transactions the property went through, presenting any mortgage or transaction.

The certificate ensures that you, the new owner, will have NO liabilities whatsoever that concerns the property. You can get this by submitting the property’s Sale Deed.

  • Betterment Charges Receipt

This one is also referred to as development and improvement charges paid to BBMP before one can issue a Khata, which is a budget for the building. Developers need to pay fixed amounts for betterment charges to the local municipality. Potential clients should obtain the receipt of the betterment charges paid during the time they’re purchasing the property.

  • Power of Attorney

Also known as a POA, this is a legal procedure giving authority to another person from the property owner. This is what transfers the original owner’s property rights to someone else, which is the new landowner. With this POA and related documents, it proves that the property investor now owns the land without any legal issues.

  • Updated Tax Paid Receipt

Through getting all tax receipts related to the property, you’re assured that all taxed with it are updated. This would prevent any penalty fees you’ll need to pay for due to no tax payments. The buyer will need to ask the seller for all updated and original tax paid bills and receipts, checking for accurate details and to ensure all dues have been paid and cleared out.

  • Completion and Occupancy Certificate

The Completion Certificate is issued by your municipal authorities, proving that the property complies with their standards and rules. This is necessary when looking for a home loan.

Occupancy Certificates are required to ensure that all the constructed meets the specified criteria. It’s obtained during construction, requiring inspection before issuance.

Wrapping It Up

Hopefully, this article on due diligence when purchasing properties helped you out! So if you’re considering getting land or any form of properties, then follow this list and get it checked with companies like Pumped On Property Gold Coast now!

If you have any questions or want to share your own experiences with due diligence, then comment below. Your thoughts are much appreciated.