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Real Estate Due Diligence in Mumbai, India entails a comprehensive and rigorous investigation into a property before the transaction is finalized. This process includes inspecting the property's legal status, assessing the property's value, reviewing zoning laws, ensuring compliance with environmental regulations, and confirming the absence of any liens or encumbrances. Both the buyers and sellers in Mumbai need to be aware of the due diligence process in order to ensure a seamless transaction.
The laws and regulations of the Real Estate sector in Mumbai are complex, often necessitating the expertise of a competent lawyer. Due diligence involves several technical and legal aspects that can be quite challenging for a layperson to comprehend. For instance, identifying title defects, assessing the property’s compliance with municipal and environmental laws, understanding town planning, verifying the authenticity of documents, and ensuring contract validity are tasks best left to a professional. A lawyer can help to prevent legal complications and financial losses in property transactions.
In Mumbai, Real Estate transactions are governed by various laws such as the Transfer of Property Act, 1882, the Indian Registration Act, 1908, and the Maharashtra Ownership of Flats Act, 1963. Specific to Mumbai is the Coastal Regulation Zone (CRZ) norms, which restricts certain activities within 500m from the high-tide line. Maharashtra also has unique laws for the protection of tenants like the Maharashtra Rent Control Act, 1999. In addition, the Real Estate (Regulation and Development) Act, 2016 (RERA) provides a comprehensive legal framework for transactions, including clear guidelines about due diligence.
Due diligence is critical to protect potential buyers from future legal complications and financial losses. It ensures that the property is free of legal disputes, compliance issues, and ensures that you pay a fair price.
Depending on the complexity of the property and the speed of document retrieval, the Due Diligence process can range from 7 days to a month or more.
Poorly conducted Due Diligence can lead to financial losses, legal disputes, property seizure, demolition, and even imprisonment in some severe cases of fraud or encroachment.
While it is possible to conduct Due Diligence yourself, it is advisable to hire a legal expert due to the complex nature of laws and paperwork involved.
The key documents include Deed, Encumbrance Certificate (EC), Tax receipts, Approved building plan, Completion certificate, Commencement certificate, along with various other property-specific documents.
For additional support, the Maharashtra Real Estate Regulatory Authority (MahaRERA) provides resources and guidance. Other notable resources include the Ministry of Housing and Urban Affairs and local municipal corporations. Online portals like the Maharashtra Land Records (Mahabhulekh) portal can also provide valuable information.
If you need legal assistance in the due diligence process, it is recommended to hire a Real Estate lawyer experienced in the Mumbai market. Ensure that the lawyer is well versed with Mumbai’s local laws along with national laws. After hiring, provide all required property-related documents to them and be transparent about your expectations and any information you may have about the property.
