How to Buy a Plot in Pakistan

This piece will explain how commercial, agricultural, or residential plots are bought. Buying a plot is of two kinds — first, through a housing society, and second, on a private basis. First, you need to see whether you are buying a plot within a society, or considering the purchase of privately owned land.

If you are buying a plot in a society, whether commercial or residential, in both cases the owner hands you documents. First, verify whether he is actually the owner of the plot or not. Also check whether this plot falls under 'mortgage' [land the development authority holds back], because whenever a society is approved, the development authority (LDA) keeps 25% or 30% of the plots with itself as mortgage. Why does it do this? When LDA approves any society, it keeps a portion as mortgage so that roads get built on time, planning happens on time — once the planning is done and roads are built, 5% is released; once the sewerage system is complete, 5% is released; once electricity poles are installed and power reaches the area, 5% is released; once gas connections and gas piping are complete, 5% is released; a mosque should be built, parks should be built, schools should be built, a graveyard should be built — accordingly they keep releasing the mortgaged plots on this basis. This does not mean that LDA has become the owner. LDA holds these as mortgage merely as assurance. You need to confirm from the society's office whether this plot is a mortgaged plot. If it is a mortgaged plot, under which category does it fall — sewerage, roads, park, market, electricity? Whichever category it falls under as mortgage, you need to see whether that work is close to completion, or has been completed, or whether the process of releasing the mortgage is underway or not. The owner remains the same, but it will be released from mortgage once the remaining work is done. Once you have checked whether it is mortgaged or not, the price fluctuates accordingly.

After that, the most important thing is that you must verify the society itself — is it on the list [of approved societies]? Is it blacklisted with LDA anywhere? Is it a fraudulent society? Does it actually exist — if it does, is it listed as an approved society or a society under process — this is the most important task. Once you have verified this too, you then need to see whether the society operates on a registered-sale basis, a transfer-letter basis, or both. Some societies are cooperative housing societies, some are private societies that have no connection with cooperative housing societies but operate on an independent basis. In this too you need to further check — whether that society, be it cooperative or private, has a proper body, how many annual general meetings it has held, whether it has a president, a secretary, and when elections are held. All of these matters you should verify. Once you have verified all of this before investing, the payment process is the same as I have already explained for agricultural land — there will be an advance (bayana), and after the advance, either a transfer or a registry.