Do’s and Don’t Do’s in property Investment

Investment in real estate may yield lucrative returns but any slipshod while observing the ground rules will be a costly affair for an investor. The following list may not be exhaustive but an attempt has been made to highlight the nittygritty involved while investing in immovable property. When you buy property, buy it from the owner and you must become the owner. Ownership means the ability to possess and enjoy it. The difference between perpetual lease and ownership is that in the former you can put a building and you will be able to deal with it.

However, you can't destroy the property whereas ownership gives the right to deal with the property in any manner you like. In perpetual lease, you can surrender the lease. When you are the owner of a property, you have the right to write a Will or leave a Will relating to the property. The owner can be an individual or minor or corporate or society or trust. The procedure for dealing will depend on who the owner of the property is. Rights which will affect the ownership can be created by all these persons which can vary by religion of the person concerned or by execution of documents including certain unregistered documents.

Your right to acquire and occupy the immovable property must be complete. There should not be a third party right. The capacity to deal with the property in toto is an indication of ownership. The requirements will differ on a case to case basis. If you are dealing with a freehold property, on purchase of property you should step into the shoes of the erstwhile owner and be able to exercise all rights subject to legal limitations. If the owner is a minor, you should get a court order. If he is of unsound mind, you have to get the court order; if it is a company, it has to follow certain procedures before the property is sold. When you buy the property, there should be a transfer of ownership free of encumbrances, free of other claims, free of third party interest and you must get the possession and transfer all records to be made in your name, which is called mutation.


You should ensure that a patta is obtained for independent plots. This is because in case the government wants to acquire it, it will go on the basis of patta (revenue record) as the main record to determine the ownership of the property. Above all a word of caution. Even if all the due diligence exercise has been carried, there is always a scope for some error. Go to a professional to scrutinise in its entirety and ensure that things are in order.