Checklist for buying property in India NRIs and PIOs

Checklist for buying property in India NRIs and PIOs who are contemplating on buying a residential property in India should first and foremost determine the purpose of such a purchase.

Determine whether you will eventually want to live there? or

if you wish to have a place in India for short term visits that you and your friends can use. Is this for a parent? or

is this strictly for investment purposes. Your answers to questions like these should help you get a clear picture of what you really intend to accomplish and help you decide where and what to buy.

Either way, location is an important factor when it comes to buying real estate any where in the world.

Here are a few tips when buying property in India:

1.Land should have a clear title, check with the office of the Sub Registrar.

2.Insist on a completion certificate and a map with the sale deed.

3.f purchasing land. Establish how the land was acquired by the seller.

4.Before buying vacant land a copy of plan approval from the local authorities should be obtained. The seller should be able to provide this. It is up to you to verify these documents.

5.Zoning was not a problem several years back. However things have changed now. Don't buy residential property for commercial use unless the plans are approved. It is not uncommon for the municipal authorities to demolish structures after they have been built and sometimes years after they have been built.

6.Be very careful when buying property from sellers who have a power of attorney status to sell the property. Personally I would NOT buy such property. Ensure that title is clear and the owner is the one actually selling the property and there are no legal disputes for ownership of the property.

7.Get the Agreement of Sale registered as per Registration Act 1908.

8. When buying re-sale properties, don't rush to close deal if price is too low as per market standard. Make proper inquires. Ensure that the property is build legally and abides by all building codes and laws of the municipality and state.

9.When buying a new property from a builder it is important that the builders reputation be checked. Previous developments, Whether delivery is on time etc. are things that can tell you a lot about a builder in India. Even your bank in India should be able to provide information about new housing complexes. If banks are hesitant in approving loans for a project, this should be a red flag.

10.When buying from builders, get everything is writing. Read the contract carefully and delete what you don't like. Several builders publish great brochures but many times don't provide all those amenities that they mention initially. Some time they even increase prices after you buy as they may have some clause in the paperwork that you signed that allows them to do so. Check and recheck sale agreement before buying.

11.Maintenance charges is a big problem these days in India. Some builders will take a one time maintenance charge and say the monthly maintenance will be paid from the interest of the deposited money. Turns out at a later date that they still demand more monthly fees for maintenance.

12.Don't pay cash for any property purchase. Make payments only by legal banking channels. This will help you avoid problems and even repatriate your money when you decide to sell your property in India.

Source: http://nriinformation.com/articles2/buy_property_checklist.htm

Tips for Purchase of Immovable property

Click the link: http://www.hindu.com/pp/2005/08/20/stories/2005082001260300.htm

TRANSFER OF PROPERTY ACT,1882

Click the link: http://dolr.nic.in/Acts&Rules%5CTransferOfPropertyAct(1882).htm

Acquisition of Immovable Property in India - Part - 2

Q.6. Can a foreign national of non-Indian origin resident outside India purchase immovable property in India?

Ans. No. A foreign national of non-Indian origin, resident outside India cannot purchase any immovable property in India unless such property is acquired by way of inheritance from a person who was resident in India. However, he / she can acquire or transfer immovable property in India, on lease, not exceeding five years. In such cases, there is no requirement of taking any permission of /or reporting to the Reserve Bank.
Q.7. Can a foreign national who is a person resident in India purchase immovable property in India?

Ans. Yes, a foreign national who is a 'person resident in India' within the meaning of Section 2(v) of FEMA, 1999 can purchase immovable property in India, but the person concerned would have to obtain the approvals and fulfil the requirements, if any, prescribed by other authorities, such as, the State Government concerned, etc. The onus to prove his/her residential status is on the individual as per the extant FEMA provisions, if required by any authority. However, a foreign national resident in India who is a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan would require prior approval of the Reserve Bank.

Q.8. Can the branch / liaison office of a foreign company purchase immovable property in India?

Ans. A foreign company which has established a Branch Office or other place of business in India, in accordance with the Foreign Exchange Management (Establishment in India of Branch or Office or other Place of Business) Regulations, 2000, can acquire any immovable property in India, which is necessary for or incidental to carrying on such activity. The payment for acquiring such a property should be made by way of foreign inward remittance through the proper banking channels. A declaration in form IPI should be filed with the Reserve Bank within ninety days from the date of acquiring the property. Such a property can also be mortgaged with an Authorised Dealer as a security for the purpose of borrowings. On winding up of the business, the sale proceeds of such property can be repatriated only with the prior approval of the Reserve Bank. Further, acquisition of immovable property by entities incorporated in Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan and who have set up Branch Offices in India and would require prior approval of the Reserve Bank.

However, if the foreign company has established a Liaison Office in India, it cannot acquire immovable property. In such cases, Liaison Offices can acquire property by way of lease not exceeding 5 years.

Q.9. Can a NRI/PIO acquire immovable property in India by way of gift? Cana foreign national acquire immovable property in India by way of gift?

Ans. (a) Yes, NRIs and PIOs can freely acquire immovable property by way of gift either from

i) a person resident in India; or
ii) an NRI; or
iii) a PIO.

However, the property can only be commercial or residential in nature. Agricultural land / plantation property / farm house in India cannot be acquired by way of gift.

(b) A foreign national of non-Indian origin resident outside India cannot acquire any immovable property in India by way of gift.

Q.10. Can a non-resident inherit immovable property in India?

Ans. Yes, a person resident outside India i.e. i) an NRI; ii) a PIO; and iii) a foreign national of non-Indian origin can inherit and hold immovable property in India from a person who was resident in India.

Source: http://www.rbi.org.in/scripts/faqview.aspx?id=33

Acquisition of Immovable Property in India through purchase / gift/ inheritance

A. Acquisition of Immovable Property in India through
purchase / gift/ inheritance

Q.1. Who can purchase immovable property in India ?

Ans. Under the general permission available, the following categories can purchase immovable property in India:

i) Non-Resident Indian (NRI)1[1][1][1]

ii) Person of Indian Origin (PIO)2[2][2]

The general permission, however, covers only purchase of residential and commercial property and is not available for purchase of agricultural land / plantation property / farm house in India.

Q.2. Can NRI/PIO acquire agricultural land/ plantation property / farm house in India?

Ans. No.

Q.3. Are any documents required to be filed with the Reserve Bank after the purchase?

Ans. No. An NRI / PIO who has purchased residential / commercial property under general permission, is not required to file any documents/reports with the Reserve Bank.

Q.4. How many residential / commercial properties can NRI / PIO purchase under the general permission?

Ans. There are no restrictions on the number of residential / commercial properties that can be purchased.

Q.5. Can a foreign national of non-Indian origin be a second holder to immovable property purchased by NRI / PIO?

Ans. No.

Source: http://www.rbi.org.in/scripts/faqview.aspx?id=33

List of National Legal Systems

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