Sabkuch Legal is an online legal portal to cater to all legal requirements of individuals, MSEs, Start-ups as well as corporations. It is a brainchild of Mr. Rajiv Sarin, a renowned name in the field of law having over thirty years of experience working with organizations such as Coca Cola, Unilever and HCL
Due diligence is the process of investigating and considering an action before consummating it. Due diligence can include drilling down on the facts, risks, and opportunities of a transaction and involve business people, lawyers, accountants, financiers, consultants, private investigators, and IT specialists, among others. Due diligence is done in connection with an action significant enough to make the investigation worthwhile. Legal due diligence refers to the legal portion of a due diligence investigation.
Before buying or leasing any property one needs to ascertain some very important factors to avoid any later legal battles. The following factors are to be taken care of –
Basically, due diligence means taking all the precautions and ensuring that investment in a property is safe and secure. After exercising due diligence, the buyer identifies and evaluates all the risks that are involved in the investment and also tries to rule out or minimize those risks.Correct way to Go about It
Scrutiny of Title – the scrutiny of the title or the title search relates to the search of ownership and the rights of the owner to sell the property. There are two kinds of title search reports -
Looking for the right of the owner – the most important aspect to note is that the owner must be capable of transferring ownership. It is to be ensured by the buyer that there is no restriction to the power of alienation of the owner. The limitations might include –
Issuance of a certificate by the Sub -Registrar’s Office. The buyer must inspect the original title deed in case of any loan against the property as it is deposited with the bank.Records to Look into
Helps prevent frauds – Due diligence involves verification of documents, title and ownership rights to ascertain the authenticity of the Risks evaluated identified and minimized – Due diligence requited to safeguard the funds being invested.
Ascertain disputed property - If there is any court case pending concerning the property or the rights of the owner, it can pose hardships later for the buyer. The buyer is bound by the decision of the court, which may or may not be favorable.
Encumbrances affecting the value of a property – The intended property must be free from encumbrances-
Checking for Easement Rights – the interest of the buyer is affected by the process of acquisition. Buyer must check an easement right covered under the acquisition scheme of the government. It affects the returns from investment.
Approvals are granted – the buyer must ensure that all the necessary approvals are granted.
The recommended due diligence period is 30 days from the date your offer is accepted by the seller because of the multiple steps and parties involved when you are in the process of buying a home.What is legal due diligence?
Legal ---- related to Law; Due ---- proper; Diligence ----- any act done meticulously/ scrupulously.What all is included in Title verification? When should I consider property investment due diligence?
Due diligence is advised when you are considering investing in commercial real estate or if you wish to sell your commercial property to a potential buyer.