Introduction
Title due diligence is the backbone of any real estate transaction. While buyers often focus on price, location, and possession timelines, defects in title can render an otherwise lucrative purchase legally vulnerable or commercially unviable. In India, fragmented land records, layered ownership histories, and overlapping statutory regimes make title verification a complex legal exercise rather than a routine checklist. Many disputes that surface years after purchase stem from red flags that were either overlooked or misunderstood at the diligence stage.
This article examines the most common red flags in title due diligence that buyers frequently miss and explains how a structured legal review can mitigate long-term risks.
Understanding Title Due Diligence Under Indian Law
Title due diligence involves verifying whether the seller has a clear, marketable, and transferable title to the property. Unlike some jurisdictions, India does not follow a Torrens system of title registration. Registration of documents under the Registration Act, 1908 does not guarantee title; it merely records transactions.
Courts have repeatedly held that a buyer must trace ownership through valid conveyances. In Suraj Lamp & Industries Pvt. Ltd. v. State of Haryana (2012), the Supreme Court clarified that title cannot pass through GPA, agreement to sell, or will transactions alone, reinforcing the need for documentary scrutiny beyond surface-level registration.
Incomplete Chain of Title Documents
One of the most overlooked red flags is an incomplete or broken chain of title. Buyers often review only the immediate sale deed, without verifying prior conveyances for at least 30 years (or longer, depending on local practice).
Missing links, unregistered transfers, oral partitions, or unexplained gaps in ownership history can invalidate the seller’s claim. In Hardev Singh v. Gurmail Singh (2007), the Supreme Court emphasised that a purchaser must examine the full chain of title and cannot rely solely on the seller’s assertions.
Revenue Record Mismatches and Outdated Entries
Revenue records such as Jamabandi, Khata, Patta, or RTC are frequently treated as proof of ownership, though legally they indicate possession rather than title. Discrepancies between revenue records and registered title documents often signal unresolved inheritance issues, pending mutations, or prior disputes.
Courts have consistently held that revenue entries do not confer ownership rights. In Balwant Singh v. Daulat Singh (1997), the Supreme Court clarified that mutation entries are fiscal in nature and cannot override registered conveyances.
Undisclosed Encumbrances and Prior Charges
Encumbrances extend beyond registered mortgages. Buyers often miss:
Equitable mortgages created by deposit of title deeds
Statutory dues under municipal, tax, or development laws
Pending attachment orders from courts or authorities
An Encumbrance Certificate (EC) alone may not capture all liabilities. In Punjab National Bank v. Union of India (2022), the Supreme Court reaffirmed that secured creditors’ rights can override subsequent purchasers’ interests if due diligence is inadequate.
Pending Litigation and Hidden Claims
A property may appear clear on paper but be subject to ongoing or threatened litigation. Buyers often fail to conduct litigation searches in civil courts, revenue tribunals, or High Courts.
The doctrine of lis pendens under Section 52 of the Transfer of Property Act, 1882 renders transfers during pending litigation subject to the outcome of such proceedings. In Jayaram Mudaliar v. Ayyaswami (1972), the Supreme Court held that purchasers during litigation acquire no independent rights, even if they acted in good faith.
Defective Inheritance and Succession Transfers
Inheritance-based titles frequently conceal defects. Common issues include:
Unprobated wills in mandatory probate jurisdictions
Absence of legal heirship certificates
Improper family settlements or oral partitions
In Clarence Pais v. Union of India (2001), the Supreme Court highlighted that succession laws must be strictly complied with, and informal arrangements cannot substitute statutory requirements.
Land Use, Zoning, and Conversion Violations
Buyers often assume that construction legality equates to title validity. However, properties developed on agricultural land without conversion, or in violation of zoning and development plans, face enforcement risks.
Courts have upheld the power of planning authorities to act against unauthorised developments. In Esha Ekta Apartments v. Municipal Corporation of Mumbai (2013), the Supreme Court ordered demolition despite third-party purchaser interests, underscoring the importance of land use verification.
Authority and Capacity of the Seller
Transactions executed by unauthorised persons are a recurring issue. These include:
Expired or limited powers of attorney
Improperly authorised company signatories
Transfers by minors or persons of unsound mind
In State of Rajasthan v. Basant Nahata (2005), the Supreme Court stressed that powers of attorney must be strictly construed, and transactions beyond authority are void.
Over-Reliance on Developer Assurances
In under-construction or redevelopment projects, buyers often rely on brochures, allotment letters, or assurances without verifying the underlying land title. Disputes frequently arise where developers lack absolute ownership or development rights.
Regulatory regimes such as the Real Estate (Regulation and Development) Act, 2016 (RERA) provide buyer protections, but they do not cure defective land titles. Courts have held that contractual remedies cannot substitute title clarity.
Why Professional Title Due Diligence Is Non-Negotiable
Title due diligence is not a clerical exercise—it requires legal interpretation, cross-verification across statutes, and risk assessment. A qualified property lawyer evaluates not just ownership, but enforceability, marketability, and future risk exposure.
In Church of Christ Charitable Trust v. Ponniamman Educational Trust (2012), the Supreme Court reiterated that purchasers are expected to exercise heightened due diligence, particularly in high-value transactions.
Conclusion
Title defects are rarely obvious at first glance. The most damaging red flags often lie buried in historical records, statutory non-compliances, or unresolved disputes. Buyers who prioritise speed or cost-saving over legal scrutiny expose themselves to long-term litigation and financial loss.
A structured, lawyer-led title due diligence process is essential to safeguard ownership, investment value, and peace of mind in property transactions.