When conducting a legal due diligence on a property, it's crucial to be aware of the risks associated with each document. Here are some potential risks to consider:
Title Deeds:
- Risk of forged or fraudulent documents, and discrepancies in the chain of ownership.
- These risks can affect the property's marketable title and ownership rights.
Encumbrance Certificate (EC):
- Risk of undisclosed encumbrances, such as mortgages, liens, or attachments.
- Risk of pending litigation or disputes not reflected in the EC.
Sale Agreements:
- Risk of unregistered or improperly executed sale agreements.
- Risk of non-compliance with statutory requirements or contractual obligations.
Building Plan Approvals:
- Risk of unauthorized or illegal construction.
- Risk of deviations from approved plans or violations of building regulations.
Completion/Occupancy Certificates:
- Risk of non-obtained or fake certificates.
- Risk of structural defects or deficiencies not identified during certification.
Property Tax Receipts:
- Risk of unpaid property taxes or pending arrears.
- Risk of incorrect assessment or undervaluation of the property.
Lease Agreements:
- Risk of unauthorized or informal leases.
- Risk of defaulting tenants or disputes regarding rental terms.
Joint Development Agreements:
- Risk of disagreements or conflicts between landowners and developers.
- Risk of non-compliance with terms, such as failure to obtain necessary approvals or deliver promised amenities.
Litigation Documents:
- Risk of unresolved or ongoing litigation.
- Risk of adverse judgments or court orders.
Property Survey and Demarcation:
- Risk of boundary disputes or encroachments.
- Risk of inaccuracies or discrepancies between physical boundaries and documented records.
These risks underline the importance of a thorough legal due diligence process conducted with the assistance of a competent legal professional. By identifying and addressing potential issues, the risks can be mitigated, safeguarding the property transaction and ensuring peace of mind for all parties involved.
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