Checks required before Buying a Plot/House in HMDA (Hyderabad, Telangana)

If you are looking to buy a plot or house in gram panchayat layout which is part of HMDA, you are at the right place to know what all things are required to make sure you buy a legally verified property. I have my share of experience with this and I am sharing it for the benefit of bigger audience.

First thing you need to keep in mind while paying any amount to the vendor is to have an agreement on stamp paper. Even if its single rupee, have an agreement signed by the vendor while paying the amount. In the agreement, please make sure you have a clause that amount should be refunded if the required documents are not provided by the vendor within the agreement validity or if the legal verification is failed. And because of any reason, if the agreement is getting lapsed, please make a new agreement within time.

Also, do not pay any extra amount apart from agreed amount till the registration date whatever be the reason or requirement vendor has. You are not obliged to pay balance amount before registration apart from advance amount.

Documents Required:

Approval(GP/HMDA/DTCP): Firstly, please check if the layout has HMDA or DTCP approvals. If the approvals are limited to Gram Panchayat, you have a bigger task at hand on verifying the property documents

Link Document:

For the bank legal verification, they will expect for at least 20 -30 years of links. This will be the primary document that is required for you and as well as bank.

Court Orders:

The first thing that registration office will check is the presence of any prohibited lands in your sale deed. They will check the presence of the survey numbers in either prohibited land list or if there any court orders related to those. So, all the old court orders which are relevant to these survey numbers should be part of the link document. You can check the list in registration site under prohibited lands.

Encumbrance:

This is most common that you can get from e-seva by using the latest registered sale deed document. This gives the list of previous owners which can be verified by the ink Document. This is mandatory for bank loans.

Building Plan:

If you are buying a house either from a developer or a resale house, then this should be collected from seller and submit to the bank.

Building Permission:

If you are buying a house either from a developer or a resale house, then this should be collected from seller and submit to the bank. You can check if permission is given at https://dpms.hmda.gov.in/AutoDCR.Common2/CitizenSearch/publicsearch.aspx?

Property Tax Receipt/Assessment Number:

If the property you are buying has been allotted a Property Tax Identification number, then its receipt is to be provided. If the property is not assigned any PTI number, then there should be assigned number basis the tax paid on self assessment.

Occupancy Certificate: If the house is a newly constructed one, you should ask for the occupancy certificate before buying it. This will make sure, the property is not mortgaged.

Land Conversion:

In most of the gram panchayats, most of the land will be agricultural land. Owner/developer should change the land usage from agricultural to non-agricultural/residential to start any development activity. Gram panchayat permissions might not be recorded in HMDA in some cases. In order to confirm this, land use certificate should be applied in HMDS

Land Use Certificate:

This is to check if the land is under residential zone as per HMDA master plan. This should applied in HMDA website. If someone else applied for the same survey numbers they can be viewed at https://dpms.hmda.gov.in/AutoDCR.Common2/CitizenSearch/publicsearch.aspx?

There are multiple types of land uses based on which banks process the loan. If the land use of the survey numbers shows that it is in Conservation Zone, then non-agricultural activities are not allowed and many banks doesn't process them. The land use information should show residential zone.

LRS(Layout Regularization Scheme): Some of the properties might need LRS as they fall in #HMDA master plan. Do not buy the property if the property doesn't have LRS and will be affected by #HMDA Master Plan

Expenses:

When we are buying a property, we consider the property cost and registration charges as part of the budget, but in practice we incur lot of other hidden charges which no agent/bank reveals on Day 1. And once we are in the loan process, we cannot go back to avoid these charges. Its better to keep all these in mind.

Before getting into the numbers, I will explain different terms that are involved in the transaction.

1. Stamp Duty : This amount is to be paid to the revenue dept. of the state government which is facilitating the transaction and each state will have different rate. In case of Telangana, its 6%. So, if the registration value is 70 lakhs, stamp duty to be paid is 4,20,000
2. TDS: Before the actual transaction, since the seller is earning an income by selling the property, it should be taxed. To avoid the tax defaults after the transactions, IT dept. made it mandatory to deduct the tax before the registration if the transaction value is > 50 lakhs and seller can use the same TDS for while filing returns if its not applicable. This amount should be paid ideally by the vendor, but they might push that to you as you are going for loan instead of paying in cash. The current rate is 0.75% in case of re-sale properties above 50 lakhs.
3. MODT: The full form of MODT is Memorandum of Deposit of Title Deed that is applicable to all home loan borrowers. This fee is charged for an undertaking that you are submitting your property documents with the bank with your own choice. You can consider this as a legal agreement between you and bank and bank enforces this by registering this because of which stamp duty need to be paid by you. Charge varies from state to state it is typically 0.5% of the loan amount.
4. Mutation: These are the newly added charges in registration process which is otherwise a separate process. This fee is to change the name of the owner in the records of government bodies like municipalities where property tax will be coming on the old owner name. This is 1% of the registration value in Telangana state.
5. Bank Processing Charges: These are standard charges across all the home loan providers ranging from 0.5% — 1.5% of loan amount with an upper limit of 20000 and depends on the provider.

Below is the list of them and the costs considering a property at 71 lakhs registration value and actual sale value at 85 lakhs

Major:

1. Stamp Duty : 4,26,200
2. TDS: 53,250(on 71 lakhs paid by vendor), 10500 (on 14 lakhs paid by you)
3. MODT: 34,500
4. Mutation: 7,100
5. Bank Processing Charges: 10000–20000 approx

Minor:

1. Link Documents from e-seva/SRO: 1000
2. Encumbrance (e-seva): 550
3. Original Document Retrieval Charges (if re-sale and loan in another bank) : 1000
4. Bank Agent Charges: 5000
5. Registration Agent Charges: 15000 approx.
6. Advocate Charges: 1000 approx.

Let me know if you have any questions.