Property Due Diligence in Pakistan: What to Check Before You Buy

Before you buy property in Pakistan, confirm three things: the seller has clear title that can be transferred, nothing is charged against the property or disputed, and the transfer can be completed and registered lawfully. These checks cost a fraction of what a lawsuit over a defective purchase would.

Which checks apply depends on what you are buying (agricultural or urban land, a plot in a housing society, an apartment) and on which province or authority holds the records. The same problems come up again and again. Sellers without full title, the same plot sold twice, forged papers, mortgages nobody mentioned, family quarrels over inherited land. A methodical review deals with each of them before any money moves.

Follow the title back through earlier transfers instead of stopping at the seller's own document. A gap or irregularity further up the chain can still land on the buyer.

• Collect copies of every earlier sale deed, gift deed, inheritance mutation and allotment letter.
• Inspect the originals and compare them with certified copies from the Sub-Registrar's office.
• Confirm that each transfer in the chain was properly executed and registered.
• For inherited property, check that every legal heir is accounted for.

Inherited property needs extra care. If one heir sells without the others agreeing, or a female heir's share was left out of the record, the buyer may face a claim years later. Ask for the succession documents and, where relevant, the consent of every co-owner.

Where land is recorded with the revenue department, the record of rights and its entries show who is recorded as owner. A fard is an extract from that record. A mutation is the entry made when ownership changes.

• Get a current fard and check the recorded owner, share and area.
• Read the mutation history and see that it agrees with the deeds.
• Measure the land and walk the boundaries.
• Where records have been computerised, check that the digital and manual versions match.

Mutation entries exist for revenue purposes and do not by themselves create title. Read them alongside the transfer documents behind them.

For plots and buildings in housing societies or development authority schemes, the society's or authority's own records carry the most weight.

• Check that the relevant authority has approved the society or scheme.
• Verify the seller's membership and allotment directly with the society, not through the seller.
• Obtain the no objection certificate for transfer and confirm all dues are cleared.
• For built property, look at the approved building plans and the completion or occupancy certificate.
• Review land use and zoning restrictions.

Apartments and off-plan purchases need more. Look at the developer's title to the land, the project approvals and the allotment or booking terms. An off-plan buyer is relying on the developer to finish the building, so examine its record and how closely payments are tied to construction progress.

A property may be mortgaged to a bank, let to a tenant, attached by a court or caught up in a pending suit. Search with the Sub-Registrar and the society, check court records where practicable, and ask the seller to confirm the position in writing. Then go and look. Occupants, tenants and neighbours often know about possession or boundary disputes that the paperwork never mentions.

Power of attorney risks

Buying through the seller's attorney adds risk. Confirm that the power of attorney is registered, expressly authorises a sale and has not been revoked. Confirm also that the principal is alive, because an agency generally ends when the principal dies.

The agreement to sell should protect you until title passes. It is often signed when earnest money changes hands, so have it reviewed before you pay anything. Look for:

• An accurate description of the property and the parties.
• A payment schedule tied to verification milestones.
• Warranties from the seller on title, encumbrances and disputes.
• Obligations to hand over original documents and possession.
• What happens on default, including the return of earnest money.
• A clear date for executing and registering the sale deed.

The transfer itself is made by a sale deed under the Transfer of Property Act 1882, stamped under the Stamp Act 1899 at the applicable provincial rate and registered under the Registration Act 1908. Work out the federal and provincial taxes that apply before completion. Once the deed is registered, have the transfer entered in the revenue record by mutation, or in the society's or authority's records, so that the property stands in your name.

Overseas Pakistanis often buy through a relative or an attorney at home. Keep the power of attorney narrow and properly attested, pay through banking channels and have the documents checked independently. Those three habits remove much of the room for fraud or misuse.

• Limit the power of attorney to the specific property and transaction.
• Have it attested by the relevant Pakistani mission and completed as required once it reaches Pakistan.
• Pay the seller directly through a bank, never through an intermediary.
• Ask for scans of every document before paying, and have someone independent verify the originals.
• Formally revoke the power of attorney when the transaction is done.

Sutra Law advises buyers throughout Pakistan, including overseas Pakistanis and businesses, on property transactions. We carry out title and record verification, draft and review sale agreements and powers of attorney, and coordinate stamping and registration.

Ideally, bring us in before the token or earnest money is paid. Copies of the seller's title documents, the fard or society allotment papers, the seller's CNIC and a draft of any agreement already proposed are enough to start. If you have already paid, send us what you signed so we can see where you stand and what still needs checking.