“Search” means to review and inspect either manually or by auto- mated means, agency records for the purpose of locating those records which are responsive to a request.
“Report” means give a spoken or written account of something that one has observed, heard, done, or investigated.
Therefore, a Search Report means inspecting records and providing evidence of the same.
Now-a-days Search Reports have become an integral part of documents by banks while sanctioning loans. Whether it be relating to any property title or any encumbrances created on the same. Banks have become more cautious while providing loans against properties to individuals and/or companies with a view to avoid future consequences. The Banks make sure that the Builders or Firm (including partners) or Company (including Directors) are not disqualified or defaulters under any law.
Here we shall emphasis on both i.e. Property Search Report and ROC Search Report required by banks while providing loans.
1. A property search report means digging down to the history of the Land or Property like who was the original owner and step down series of property till it reached the present owner.
2. The property search is taken over a period of 30 years.
1. The title certificate mentions whether the property is encumbered or not and also whether it has a clear marketable tile.
2. If any court proceedings are carried on and pending in courts, needs to also be mentioned in the Certificate.
3. It is mandatory for the builder to annex the Title Certificate along with “Agreement to Sale” at the time of purchase. It gives a buyer the confidence that he is undertaking a transaction with a genuine party and the same is free from mortgage.
The ROC Search Report are mainly prepared by a Practicing CA/CS/CMA or Advocate after inspection of the document and records of the Company as per ROC records. The Search Report is mainly asked by the Banks while granting Loans to the Companies. It helps the Banks in determining whether the property kept as security is free from encumbrances and no step down charges are created. This keeps banks safe from defaulting companies.
The search report generally contains the following information about a company-
(Details of charges, amount, security pledged, any modification, rate of interest, tenure of earlier charges created, any earlier charges which have been satisfied/paid off etc.)
The Search Report may also include other matters (like Director Disqualified/Defaulters, GST Returns, Income Tax paid, any court matters against the company etc.)
Hence, it can be concluded that the search reports serve the complete purpose of stakeholders to know about the company in which they are going to invest, control, manage, provide loan, enter into a contract etc.
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Disclaimer: This article is written merely for informational purposes and it should not be taken as a legal advice. The readers are advised to consult competent professionals before acting on the basis of any information provided here.