Investing in land and buildings require huge sums of money. Therefore,
every purchaser of immovable property has to be very careful and take all
precautions to protect his interest and to make doubly sure that the vendor has
good and marketable title and the property is free from encumbrance.
There are various documents which would provide vital
information as to whether a property in question is free from encumbrance and
the vendor has good and marketable title. Upon going through these publicdocuments available in the Sub-registrar's office, search reports are prepared
and such search reports contain information as to whether the property in
question is encumbered or not and the vendor possesses a clear and marketable
title or not. Search reports are prepared by advocates upon verification and confirmation
from the concerned authorities as to genuineness of the documents.
Search report gives a summary of the ownership details of a
property and changes in ownership that have occurred from time to time
including existing or not of any charge or encumbrance over the property. The search
report discloses if there is any existing mortgage, litigation, or claim which
may adversely affect the title of the property. Search reports are prepared
upon verification of the property documents for the last 30 years. It would be
in the interest of the buyers that they insist on production of search report
before executing the 'agreement to sell' with the property developers or withthe owners of the property.
The search report does not display the defects in the titleto the property or any transactions that have not been recorded in the Sub registrar'soffice. If any document is not registered with the sub-registrar's office it
cannot be mentioned in the search report.
Commercial banks do insist on production of search reportbefore granting any advance or loan for purchase of any property. For availing
a housing loan from a banking institution, it is a per-requirement that the
title of the property of the present owner should be clear and marketable.
Usually banks do not finance any encumbered property or if the property is
under legal dispute, as it would reduce their security and increase their
exposure to risk. This means the seller should be genuine and the actual ownerof the property. The property should not be under any dispute or litigation.
The charges for search report is nominal and is included in the processing and administration
charges by the bank to sanction and disburse the loan.
This process of obtaining the search report gives securityto the buyer. It assures the purchaser that the title of the property which he plans
to buy is good and there won't be any problems at a later stage because of any per-existing charges, encumbrances or legal contentions on the property.
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