In India’s rural and agricultural areas, land ownership and dealings are organized by specific systems or terms, commonly known as Khasra and Khatauni. These documents allow for the confirmation of ownership and boundaries, which is extremely beneficial to banks when assessing properties for loans. This article aims to explain the terms as well as the ways in which they influence the loan process.
Khasra: The Unique Plot Identifier
A Khasra Number is designated to a plot or parcel of land during the revenue survey and serves as its unique Id. This khasra number acts as the plot number or survey number in land records.
Purpose and Usage:
- Identification: In a revenue village or revenue area the Khasra number is a way of defining and limiting the plot.
- Documentation: The Khasra Number is used in documents relevant to the land like deeds, agreements, and even administrative documents.
- Reference in Transactions: The Khasra number needs to be well-defined in any transaction involving the transfer, purchase, or sale of land. These referential numbers ensure the correct parcel of land is being dealt with.
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Khatauni: The Detailed Record of Land
A Khatauni is an official ledger of land administered by the government’s revenue collecting office. It includes important facts about the land such as:
- Ownership details
- Land measurements
- Crop patterns (for agricultural land)
- Land tax assessments
Purpose and Usage:
- Record of Rights: It specifies the ownership of a particular piece of land and assists in establishing legal possession.
- Revenue Collection: The Khatauni serves as an aid in the collection of revenue by facilitating the determination of land revenue and other payments.
- Agriculture and Rural Development: Khatauni is important for the administration of agricultural land and rural planning.
- Verification in Transactions: In case of a dispute over property ownership or change of title, the Khatauni is presented as proof of ownership along with the Khasra record.
Importance in Property Transactions
1. Verification: In land buying and selling activities, it is important to check both Khasra and Khatauni for:
- Determining Boundaries: To clear measurement of land.
- Confirming Ownership: Maybe reveal current ownership and besides disputes or encumbrances claimants. Show changes can be precisely historical changes in ownership or use of land.
2. Legal Compliance: Availability of correct Khasra and Khatauni documents helps comply with the local land revenue regulations which is important when transferring or registering properties and in the settlement of claims or disputes.
3. Due Diligence: Potential purchasers are expected to obtain these records to ensure compliance with the seller’s documents in regard to the property details, and confirm that there are no existing concerns such as legal issues or unpaid land taxes.
Also Read: Understand what is Loan Against Property?
Banks and Loans on Properties with Khasra and Khatauni Records
Banks often consider properties documented through Khasra and Khatauni records for loan purposes. However, several key factors and requirements are involved in the process:
- Title and Ownership Verification
- Clear Title: It is mandatory for the property to have a marketable title. In clear records and Khasra and Khatauni bases it helps to check disputes/settle boundaries of ownership.
- Proper Documentation: While Khasra and Khatauni are sufficient, banks are likely to possess further paperwork pertaining to mutations, revenues, receipts, and previous sale deeds in order to ensure the legality of the property.
- Property Type and Usage
Agriculture vs. Non-Agricultural Land: A number of properties that bear these records are agriculture in nature. The policies of the bank that offer loans against agricultural land are somehow different from what is obtainable on residential or commercial land.
- Agricultural Land Loans: These types of loans may have varied loan amounts and requirements. In certain cases, the agricultural land may have to be converted to other uses so that the borrower can be given higher amounts.
- Non-Agricultural/Commercial Loans: These types of loans or mortgages may have more stringent location, infrastructural, and commercial requirements for the land being sought after.
Zoning and Land Use Regulations: The lender seeks to ensure that the existing zoning of the property or its potential future zoning meets the jurisdictions and land supported by the intended purpose of the borrower.
- Market Valuation and Loan Value Ratio (LTV) Property Valuation
- Property Valuation: An expert evaluation is done to find out how much the property is worth currently. The Khasra and the Khatauni registers provide specific details which assist in this process.
- Loan Value Ratio: Based on the expert evaluation, the bank defines the LTV ratio. This is the percentage of value of the collateral they are ready to lend. Generally, good record keeping and documentation improves the LTV ratio while poor record keeping lowers it forcing a lower loan limit or even rejection.
- Regulatory and Internal Policies
- Compliance with Local Laws: The Khasra and Khatauni records should be updated and the property should be registered in the government databases so that the banks have this required information before processing a loan. The borrower has to meet government regulations to be able to get the loan.
- Internal Risk Assessment: The risks are gauged differently by each financial institution. This means the property’s title documentation status, its proximity to other important areas, and its selling prospects are determining factors to the lending decision.
Conclusion
There is a great need for anyone working in a region where land transactions or property transactions are made, like in India, to comprehend the significance of Khasra and Khatauni. These records are the most essential in establishing any property transaction and its credibility. In addition, these records are used by banks to ascertain the worthiness of the property for the loan. Clear ownership, proper documentation and adherence to the law are vital in order to be given a loan with these properties as security.
In case you are planning on engaging in property business or seeking to use land as security for money given, then your Khasra and Khatauni forms have to be in order first. Seeking advice from legal practitioners and financial advisors will help you in the preparation of the land documents and also assist you obtain optimum loan conditions.
