An article about " Search Report in property transactions "

Search Report in property transactions

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 public documents 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 with the owners of the property.

The search report does not display the defects in the title to the property or any transactions that have not been recorded in the Sub registrar's office. 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 report before granting any advance or loan for purchase of any property. For availing a housing loan from a banking institution, it is a pre-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 owner of 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 security to 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 pre-existing charges, encumbrances or legal contentions on the property.