Legal tips related to buying & selling real estate in India


What do you look for when you buy a property in India? Land of your required measurement, good locality, updated infrastructure, resale value, and what not! Everything matters, doesn’t it? But your search does not end here. There is always a legal aspect to buying and selling real estate in India. This article briefly discusses the laws that govern Real Estate and later a few tips to pay heed to when involving oneself in the buying and selling of real estate.

Laws governing real estate in India

Following are a few significant laws that regulate the affairs of real estate in India:

  • Indian Contract Act, 1872: The provisions of this Act govern the validity of contracts that are also legally binding, as well as the rights of the parties involved. Since the sale and purchase of the real estate involves multiple deeds, e.g., Sale deed, Conveyance deed, Release Deed, Declaration Deed etc., and agreements, e.g., Sale agreement, Construction agreement, this immediate law is automatically valid to this subject.
  • Transfer of Property Act-1882: The provisions of this piece of legislation generally revolve around the principles of conveying property from one person to one or more individual(s). This law is considered an extension of the Indian Contract Act and Indian Succession Act.
  • The Real Estate (Regulation and Development) Act-2016 (RERA): The scope of this legislation extends to all the properties, be it residential or commercial, and to the new projects and those that have been ongoing. Furthermore, the initial intention of introducing this Act was to secure both seller and buyer’s rights and interests and further promote fair transactions.
  • Foreign Exchange Management Act-1999 (FEMA): The Act intends to consolidate the laws relating to the sale or purchase of the land by the foreign entities, including persons not residing in India/ NRIs, to promote external trade and thereby maintain the foreign exchange.

In addition to the above-mentioned vital legislations, various other laws are relevant to the real estate sector in India, including the Indian Stamp Act, 1899, Indian Easement Act, 1882, Registration Act 1908 Land Revenue Codes (which differs from state to state), etc.

Liabilities of seller

  • The Transfer of Property Act, 1882 makes it obligatory only to transfer the immovable property to be registered if it carries worth of Rs. 100 and above. It further requires the transfer deeds to be duly stamped and the parties to be competent.
  • Section 55 (1)(a) of The Transfer of Property Act, 1882 makes it imperative for the seller to disclose any material defects in the property or its title, to answer all the questions asked by the purchaser to the best of his knowledge concerning the said property and title.
  • A seller is obligated to comply with all the contractual liabilities for executing any sale, conduct a proper and rightful conveyance/sale deed, and transfer peaceful and vacant possession of the said property.

Responsibilities of buyer

Although the seller has certain liabilities, the buyer has responsibilities of his own. First and foremost is to act with due diligence and evaluate the risks before entering into any such transaction and becoming the bona fide purchaser. Legally, the significant responsibility of the buyer is that one must obtain all the necessary (original) documents of the property in question, including but not limited to the sale deed, encumbrance certificate, occupancy certificate, no objection certificate etc.

It is imperative to proceed with the sale only after going through the mentioned terms and conditions under the agreement and the comprehensive study of all the related documents to ensure that the said property is free from encumbrances, lien, mortgages etc. Furthermore, investigating the title of such land to know if the land has any legal restriction(s) of any kind or defaulted title barring any transfer.


It is essential to note here that only after the execution and registration of the sale deed the transfer of rights in the property takes place from the seller in favor of the buyer.