Residential | July 2022

Moving into your new home? Know all about due diligence

Moving into your new home? Know all about due diligence

Buying your first home is an exciting phase in life, but overlooking due diligence is something you cannot afford to do as a buyer. Due diligence is nothing but ‘homework’ to be done on your part before making property purchases or real estate investment decisions. A top home-buying tip would be to not solely base your decision on just the verification process conducted by banks during loan processing.

Due diligence is a detailed investigative procedure done to determine if the home or the property is safe to invest in. One of the things to know before buying a house is that the elements of due diligence can vary based on the type of property. The due diligence for a ready-to-occupy home is different from one that is under construction or a redeveloped property.

For a first-time home-buying experience an integral part of due diligence would be to ascertain the property developer’s credibility, especially their delivery track record of past projects. In the case of second-hand property, the ownership transfer and re-registration should be completed before the handover.

The need for due diligence
Due diligence is the most important aspect of any real estate transaction and an unavoidable step in every home-buying guide. The actual purpose of due diligence is to collect all relevant information on the property or home that is to be purchased. During due diligence, a team of specialists such as architects, real estate consultants or lawyers performs a series of inspections on the property and cross-checks all related documents. Due diligence makes sure that the home you are purchasing is free of litigation or debts of any kind.

Ownership documents will be verified and also the title of the property will be analyzed to ensure it is within the scope of the Indian Contract Act and the Transfer of Property Act. In India, the real estate due diligence procedures fall under the regulations of the Registration Act, the Indian Stamp Act and the Indian Easements Act.

Before the pandemic, the focus of due diligence was only on the physical and statutory parameters and checking regulatory and compliance issues. But this has changed now and investors, developers and occupiers are taking steps to improve their management approaches toward environmental and social issues.

Due diligence checklist for your new home
The extent of due diligence that should be done can vary depending on various factors such as asset type, transaction type whether it is a short or long-term lease arrangement or purchase or mortgage, time period available for completing the transaction or if any third-party financing is involved. Here is a basic checklist of due diligence required when you are buying your first home:

  1. Verify the legal capacity of the seller, i.e. the present owner or any other predecessor title holders should not be a minor or a person of unsound mind.
  2. Check the nature of the current owner’s right over the property, whether it is in joint names or in the name of a trust/society/partnership firm.
  3. Ensure that the seller has paid the property tax and check the documents for the same.
  4. Occupation and Completion certificates from the municipal authority should be in place.
  5. Check if the original sale deed is in the name of the seller.
  6. For the registration of a residential flat, apart from the sale deed, there should also be a letter from the society with the number of floors in the building, the year in which the building was constructed, the apartment's built-up area and the number of lifts in the building.
  7. In the case of an NRI seller, the Power of Attorney (PoA) should be notarised before the Indian Consulate and attested by the sub-registrar.
  8. Verify land records of rights, tenancy and cultivation, issued by the registrar of land holdings obtained from the Tehsildar’s office.
  9. A Khata certificate should be issued to the owner of the property, and this is required to apply for water and electricity connection.
  10. Ensure that the property has received a green clearance.


The due diligence exercise that is a must in everyone’s home-buying tips, could not only impact the commercials but also determine the feasibility of the real estate transaction. Colliers India, real estate consultants, noted in their report 'Technical Due Diligence: Risk-proofing Realty', that the cost of conducting due diligence of a property is generally less than 0.3 percent of the project cost.

But the benefits of thorough due diligence are immense as it can save the homebuyer from substantial loss of money, time and legal hassles. When you invest in a home from a reputed builder like the Brigade Group, you can be assured of complete transparency and trust and a hassle-free home-buying experience.

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