Real Estate Due Diligence

Part 5 of our 10-part Home Buying Series for Mumbai Property Buyers

Introduction: Your Shield Against Real Estate Fraud

In the complex landscape of Mumbai Metropolitan Region’s real estate market, due diligence isn’t just a procedural formality—it’s your primary defense against potentially devastating financial losses and legal complications. With real estate scams claiming thousands of victims annually across India, the stakes couldn’t be higher. A property purchase represents one of life’s most significant investments, yet many buyers rush through crucial verification steps, only to face years of litigation, financial strain, and emotional distress. This guide arms you with the precise checks and balances needed to protect your investment in the MMR region.

Essential Legal and Financial Checks: Your Due Diligence Checklist

RERA Registration Verification

• MahaRERA Website Check: Visit maharera.mahaonline.gov.in to verify project registration
• Registration Number Validation: Every legitimate project advertisement must display its MahaRERA registration number—this is non-negotiable
• Project Details Confirmation: Cross-verify project specifications, completion timelines, and developer credentials against MahaRERA records
• Complaint History Review: Check for registered complaints against the project or developer through MahaRERA’s grievance portal

Developer Credibility Assessment

• Verify developer’s track record spanning at least 5-10 years in the MMR region
• Research completed projects for quality, timely delivery, and post-handover service
• Check corporate registrations with Ministry of Corporate Affairs through mca.gov.in
• Review financial stability indicators including debt-to-equity ratio and recent balance sheets
• Search for pending litigation against the developer through court websites and legal databases

Land Title and Ownership Verification

• 7/12 Extract Validation: For properties in undeveloped areas, verify the 7/12 extract (land record document)
• Property Card Examination: For urban properties, obtain and review the property card from the City Survey Office
• Land Use Designation: Confirm zoning permissions align with the development being undertaken
• Ownership Chain: Trace ownership history for at least 30 years to identify potential inheritance disputes

Examining Critical Property Documents

Title Deed Verification

The title deed or “conveyance deed” is the cornerstone document establishing rightful ownership. Your verification should include:

1. Chain of Title: Verify all previous ownership transfers to ensure no breaks in the chain
2. Proper Execution: Confirm proper registration with appropriate stamp duty paid
3. Boundary Description: Check that property boundaries match what’s being offered
4. Restrictions and Encumbrances: Identify any usage limitations or conditions attached to the property

Encumbrance Certificate Analysis

This document confirms whether the property carries any financial or legal liabilities:

1. Certificate Currency: Obtain an encumbrance certificate covering at least the past 13 years
2. Outstanding Loans: Identify any mortgages or loans registered against the property
3. Legal Claims: Check for pending litigation that might affect ownership rights
4. Government Acquisition Notices: Verify no part of the property is under government acquisition

Additional Critical Documents

• Building Approvals: Verify approved building plans match actual construction
• Commencement Certificate: Confirm legal permission to begin construction
• Occupation Certificate: For ready properties, verify legal permission for occupation
• Society Formation Documents: For apartments, review cooperative society registration and bylaws
• Property Tax Records: Check for outstanding property tax liabilities

Professional Legal Support: Your Essential Safeguard

When to Engage a Property Lawyer

Engaging a specialized real estate attorney is strongly recommended for:

• First-time homebuyers navigating the MMR market
• Properties with ownership history complications
• Projects with construction delays or developer disputes
• Resale properties with complex legal histories
• Properties with multiple owners or inherited assets

What Your Lawyer Should Verify

Direct your legal counsel to conduct:

• Comprehensive title search going back 30+ years
• Verification of development permissions and approvals
• Review of builder-buyer agreement for unfair terms
• Assessment of potential legal risks specific to your property
• Authentication of all submitted documents

Expected Costs

Budget ₹25,000-75,000 for comprehensive legal due diligence, depending on property complexity—an investment that can save millions in potential losses.

Developer Credentials: Questions That Demand Answers

Project-Specific Information Requests

Request the following from your developer:

• Approved building plans and sanctioned layout
• Environmental clearances for the project
• Copies of all relevant NOCs (No Objection Certificates)
• Detailed construction timeline with milestone commitments
• Specific amenities list with delivery guarantees

Financial Transparency Requirements

• Project-specific escrow account details as mandated by RERA
• Construction finance arrangements and lender information
• Clear breakdown of all charges beyond the base price
• Written disclosure of any pending litigation affecting the project
• Maintenance deposit and monthly charge calculations

Historical Performance Metrics

Request evidence of:

• On-time delivery percentage for previous projects
• Quality certifications and recognitions
• Customer satisfaction ratings and testimonials
• After-sales service track record
• Defect liability commitments and history

Due Diligence Action Plan: Your 10-Step Program

1. Verify RERA Registration: Confirm active registration on the MahaRERA portal
2. Research Developer History: Investigate past project delivery and quality
3. Visit Completed Projects: Tour finished developments by the same builder
4. Speak with Current Residents: Get feedback from existing customers
5. Review All Legal Documents: Examine title deeds, approvals, and certificates
6. Check Encumbrances: Obtain and verify encumbrance certificate
7. Verify Approvals: Confirm all regulatory permissions are in place
8. Engage Legal Counsel: Hire a specialized real estate attorney
9. Conduct Site Visits: Compare actual construction with promised specifications
10. Document Everything: Maintain records of all communication and promises

Conclusion: Due Diligence as Non-Negotiable Protection

In the MMR real estate market, thorough due diligence isn’t merely advisable—it’s essential. The time and resources invested in these verification processes provide invaluable protection against the devastating consequences of property fraud. Remember that legitimate developers welcome scrutiny, as it differentiates them from questionable operators.

Your due diligence efforts represent the critical foundation upon which your homeownership journey stands. By methodically executing these verification steps, you transform from a vulnerable buyer into an informed investor, dramatically reducing your exposure to the risks that plague unprepared purchasers in one of India’s most dynamic real estate markets.

Your Next Step: Before signing any agreement or making any payment, commit to completing every item on this due diligence checklist. Your financial security and future peace of mind depend on the thoroughness of these preparations.