Legal Compliances related to acquisition and ownership of property with respect to Non Resident Indians (NRI).
Most NRIs dream to have a property in their home town. In the 21st Century India, with a number of construction projects coming up in various parts of the country, this dream is becoming a reality for most Indians working abroad. Real Estate prices have skyrocketed over the past century and hence, there is increase in the risk for investors who decide to buy property in India. Being NRIs, the biggest disadvantage would be of credibility of the builders. Most NRIs cannot afford to keep a check on the progress of the projects into which they invest and hence most of them decide to go for the builders with the best track records with respect to customer satisfaction, number of previously successful projects and other criterion that are mostly set by these same companies, in their advertisement campaigns. Some builders with an impressive track record have been involved in some high valued fraud cases in India. Realty fraud is an increasing threat to the investors and possible home owners looking to invest in the country.
NRIs are an easy target for these as they are mostly not aware or are inadequately aware of the current state of affairs of the market place in the country. Most of them are attracted by the various schemes, amenities, financial services and other features that builders and real estate companies offer. It is important for the investor not to shift their attention from basic factors like legitimacy of land, various compliances to be followed while construction, environmental clearances etc. to the more appealing features and the amenities that they are offered. Most people do not bother to enquire into the legality of the construction process and other key factors at the time of purchase and this attitude has led to investors incurring huge losses in the process. Hence before buying a property in your city, it would always make sense to consult an advocate and take proper advice from them. Proper investigation of the property is also an important pre requisite before making an investment. There have been instances in the past in which builders erect multi storey residential buildings on land which they fraudently acquire or erect more floors to an existing structure without taking the required permissions from authorities. Over the last few years, a number of such cases have been reported in the country.
Here are few steps which an investor should consider before making an investment:
Identifying the entity:
Entity is generally the company/firm selling the property. It’s very important to look into the company/firm and its registration details before one could decide to buy the property from them. Identifying the responsible persons is also an essential before deciding to do business with the company/firm. It is essential to ensure the interests of a third party (if any) who could also be the joint owner of the property entitled to benefits out of the sale of the property. It is necessary for the investor to be aware of the company and its track record before making an investment as tracing these companies becomes an almost impossible task due to lack of records.
Verification of the title documents: sale deeds, property cards
Every property has documents related to its ownership. It is very important for an investor to look into these documents and ensure the legitimacy of these documents. In many cases, investors have lost huge amounts of money due to forged documents or improper documentation.
Project compliance of state rules and regulations:
Every state has certain rules and regulations governing property ownership. Various forms and documents need to be updated periodically. Non- compliance with these rules and regulations set by the state, could invite much complications in the future. Various examples could by quoted where due to non-compliance of these rules, huge losses have been incurred. Hence it is very important to ensure that the property is in compliance with all the state rules and regulations.
The environmental clearance certificates also need to be scrutinized before making the investment to ensure that no complications in this regard would arise in the future. The legitimacy of the information in these certificates could be misrepresented and this could bring complication on the long run to the property owner.
Government Reservations and Town planning
The land on which the property stands must be approved by the competent authorities. For example if the land was classified as agricultural land, there is a certain procedure to follow before it could be approved by the authorities for non-agricultural or industrial purposes. Town planning authorities also give certain approvals for projects depending on the nature and planned use of the land. If these certificates are falsely obtained by the developer or builder, it would end up causing trouble for the purchaser of the property on the long run.
Hence it can be concluded that every investor should do adequate research and investigation into various legal aspects of the property in question before making an investment or even signing a contract. But, most of the times these investors do not get the time to do the needful. That’s where we come in. At Astrea Legal, with our extensive and most efficient network across the country, we are dedicated to providing our services to the realty buyers in the country so as to avoid any sort of misfortune in the future.