How to Verify Real Estate Documents?

Real Estate is considered as a safe haven for excess savings and investment mainly because it is a tangible asset and prices are downward sticky. However, the transfer process of buying and selling a real estate property is equally risky. Nonetheless, there are a few sharp edges that one should steer clear of for a smooth and safe transfer of ownership as a buyer. One of the most important aspects is to confirm the legal status of that property. In this article, we will discuss how you can verify the real estate documents of a property.

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How to Verify the Real Estate Documents in Pakistan?

The record of legal ownership of real estate properties is kept at the Local Patwari, Local Development Authority or the Society’s office. Depending on the area’s record maintenance system, you can visit one of the following offices to verify the legal ownership of a property.

Local Patwari
- The traditional way to verify the real documents is to visit the Local Patwari who can provide information about the legal status of a property in his region.
Sub-registrar’s Office
- Another way could be to visit the sub-registrar’s office which can provide with and verify the legal documents for a property.
Local Development Authority
- The development authority of the respective city keeps the record of ownership as well as the approved layout plans of houses and commercial buildings.
Society’s Office
- Housing Societies including DHA Multan, DHA Lahore, Capital Smart City, Lahore Smart City, Park View City and other DHA branches have rigorous transfer procedures to prevent frauds and therefore the verification of most of the documents can be done through their offices.

Online Verification Portals

The modern ways have been introduced lately to verify the real estate document:

Punjab Land Record Authority (PLRA) is a useful website where you can register and verify a property online.
A Property Verification Center was also launched in Islamabad in 2021, which confirms the legal status of a plot within 24 hours.

What Real Estate Documents should be verified before purchase?

Below we have discussed the important documents of an immovable property.

Sales Deed

Sales Deed is a legal document that proves that the property has been transferred in the name of the buyer. This document essentially marks the end of the sale process.

Sales Deed is often mistaken as Sales Agreement which is a document that serves a different purpose. The terms and conditions set by the seller and the buyer for purchase of the property are stated in the Sales agreement while the Sales Deed ensures that the property is now owned by the buyer.

Mother Deed

Mother Deed is a document that shows the past owners of the property, how many times it was sold and to whom. A complete history of sellers and buyers of the property of your interest is provided in the Mother Deed.

Encumbrance Certificate

Before buying a property, you must ensure that all the due amount of this property has been paid already. Encumbrance certificate shows the record of all due transactions and/or related money issues. Also called “Statement of Dues (SOD),” this document can be easily obtained from a sub-registrar’s office in Pakistan. Moreover, the Statement of Dues is obtained from Society’s Office in case the plot or house lies in a housing society.

If such an issue is not dealt with beforehand, it can cause conflict among the parties involved. To save both parties from future inconvenience, it is crucial that you confirm that there are no complications regarding the previously due payment/s of the property.

Project Completion Certificate

This document is issued by the property developers after confirming that the constructed property has been built according to principles and standards defined by the relevant development authorities and municipal corporations such as the Capital Development Authority in Islamabad, Lahore Development Authority in Lahore, etc.

NOC (No Objection Certificate)

Before investing your money in a real estate project, confirm the NOC status of that project. NOC is issued the relevant development authority and it proves that the project is legal and constructed according to the applicable by-laws. Projects with approved layout plans are also safe for investment.

It is strongly advised that an investor verifies the legal documents and legal status of a property before buying it. If you don’t practice this before making an investment, your investment might get stuck with a shady real estate project causing you financial and mental strain.

To know about the NOC of a real estate project, you can visit the websites of regional offices of CDA (Capital Development Authority), RDA (Rawalpindi Development Authority), LDA (Lahore Development Authority), KDA (Karachi Development Authority), and similarly for other cities.

Bank Approval Certificate

If you’re buying a house through a bank loan. The bank would first verify the legal status of the house before approving the loan. The approval document from the bank confirms that the property you’re about to buy is a safe investment.

Power of Attorney

Power of Attorney is a document that proves the right of a person to manage a property. In special circumstances, the owner can transfer these rights to a third person. Often overseas buyers or sellers transfer their power of attorney to a person living in Pakistan.

There are two types of documents when transferring power of attorney:

General power of attorney: The owner would transfer all the property affairs to a third person.
Special power of attorney: The owner would transfer certain rights to a third person for managing the property affairs.

The power of attorney should be verified as being original and fulfilling the applicable legal requirements for a power of attorney.

Summary

It is best for you as an investor to be curious about and investigate the legal status of a property before you decide to buy. If a seller delays or seems reluctant to provide a vital document of a property on sale, you must stay cautious of the affairs. You should invest in a property only after all its legal documents have been verified.

To facilitate the process of obtaining documents from the seller and their verification, hire a good and reputable real estate agent with the right contacts to speed up the process for you.