Property Due Diligence - Checking Whether the Property You’re Planning to Buy is Not Under Acquisition

Explainer Sep 15, 2022

Property due diligence is the process of investigating facts related to a given property, including ownership history, and obligations or encumbrances the property may be under.

It is essential to carry out adequate due diligence of a property before you make a purchase, so as to avoid unforeseen issues - legal or otherwise after the purchase has been complete.

As part of this process, it is essential to consider whether the land pertinent to the transaction is under acquisition. In case the property you are considering has land under the process of acquisition, any transaction made for the property will be considered void.

What is Meant by ‘Land Under Acquisition’?

The government, under Sections of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 is able to acquire land from owners for purposes such as development, and better planning.

The government, in case it is not carrying out the development process through its own bodies, can sell the acquired land to private entities as well.

In case the government decides to acquire land, the existing land owners are duly compensated in accordance with the sections of the Act.

How to Check Whether the Property You Are Buying Has Land Under Acquisition?

The fundamental process of checking whether the property has land under acquisition revolves around obtaining NOC's (or No-Objection Certificates) from government authorities.

In case the property you are planning to purchase is part of a layout plan, or a building plan (in other words, is commissioned by a builder), you can check with the builder for the NOC's already obtained for the property.

In case the property is not part of a layout plan, you would have to check with the local authorities, separately. Below is a list of government authorities that commonly acquire land:

  • The local housing development authority
  • Highway authority
  • Airport authority
  • Municipal corporations or local regional authorities
  • Relevant industrial corporations

It is important to know what bodies you would need to get the NOC's from depends on the state the property is in, as well as its geographical location. For instance, a property located in the centre of the city is likely not to get acquired by the pertinent Airport authority. It should also be noted that the above list is not exhaustive, and takes a general view.

At TEAL, we are building the next generation of property due diligence using big data analytics and machine learning. We provide reliable information about property ownership, registration status, disputes, tax compliance history and all other information that you will need to make a safe and secure property investment. To learn how TEAL can help you in your journey, get in touch with us.

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