can freely purchase and sell residential and commercial properties
in India. A foreign citizen of Indian origin does not have to obtain
RBI's permission for purchasing and selling residential and commercial
properties (other than agricultural/plantation land and farm house)
for bonafide purposes provided the purchase is met through foreign
exchange. In such cases, a declaration has to be submitted to RBI
within 90 days of the purchase.Sale proceeds of not more than two
residential properties and any number of commercial properties purchased
by NRIs with foreign exchange funds and sold after at least 3 years
can he repatriated after obtaining RBI's specific permission for
the same up to the purchase amount made with foreign exchange funds.
Permission from RBI will have to be sought within 90 days of the
sale of the property. Giving and receiving gift of properties are
freely permitted for Indian citizens. A foreign citizen of Indian
origin does not have to obtain RBI's permission for acquiring or
disposing off gifts (up to two residential properties for receiving
as gift) from or to a relative. (Charitable trust also for giving
NRIs can freely let out their residential or commercial properties
in India. The rental income should however be routed through the
NRO account. The rental income is freely reparable from 1996-97
and is subjected to production of undertaking/certificate regarding
payment of tax from the Income Tax authorities Non-resident Indians
can avail housing loans from banks and housing finance institutions
for an acquisition of one house/flat which is subjected to prescribed
conditions. At least 25% of the cost of acquisition should be met
with foreign exchange funds. The purchase consideration should be
met either out of inward remittances in foreign exchange through
normal banking channels or out of funds from NRE/FCNR accounts maintained
with banks in India.
are required to file a declaration in form IPI 7 with the Central
Office of Reserve Bank at Mumbai within a period of 90 days from
the date of purchase of immovable property or final payment of purchase
consideration along with a certified copy of the document evidencing
the transaction and bank certificate regarding the consideration
Owning a house is an important thing
in ones life. However, one needs to be careful while buying land/house
to avoid falling into legal hassles. A lot of care is needed from
the beginning- right from site seeing till the registration of the
land. The legal status of the land is one of the first issues that
you should address before confirming a property. The first thing
is to find out the tenure, legal right of the holder of the land
in government records. The tenure or possession right could be freehold,
leasehold or may be held under a government grant or 'sanad'. Freehold
land is always most preferable. The seller should provide all the
necessary documents to the buyer.
1) Property Title deeds.
2) Property Tax receipt and bills.
3) Property Encumbrance Certificate.
4) Pledged Property.
5) More than one Holder.
6) Buying land from NRI/Foreign landowners.
7) Property Agreement.
8) Property Registration.
9) Changing the title in Village office.
10) Measuring the Property.
1) PROPERTY TITLE DEEDS
The first step is to see
the title deed of the land, which you are going to buy. Confirm
whether the land is in the name of the seller and that the full
right to sell the land lies with only him and no other person. Don't
be satisfied with the Xerox copy of the title deed. Insist on seeing
the Original Deed. Sometimes the seller may have taken a loan by
pledging the original deed. It also needs checking whether the seller
has permitted any entry/access to others through this land and whether
any other fact has been suppressed/left undisclosed by the owner
of the land. It is better to get the original deed examined by a
lawyer. Along with the title deed, the buyer can also demand to
see the previous deeds of the land available with the seller.
PROPERTY TAX RECEIPT AND BILLS
Property taxes which are due to the government or municipality are
a first charge on the property and, therefore, enquiries must next
be made in government and municipal offices to ascertain whether
all taxes have been paid up to date. The owner should also possess
the latest tax paid receipts, which you may inspect. Enquiries should
also be made in various departments of the municipality to ascertain
whether any notices or requisitions relating to the property have
been issued and are outstanding and not yet complied with. While
inspecting the property tax receipt, it can be noted that there
are two columns in the tax receipt. Make sure that the name entered
in the owner's column is correct. The second column will be for
the name of the one who paid the tax. Sometime the owner may not
have the tax receipt with him, in such cases, contact the village
office with the survey no. of the land and confirm the original
owner of the land. If you are buying a house along with the property,
then the house tax receipt should also be checked. Also ensure that
the electricity and water bills are up-to-date and if there any
is balance payment to be made, ensure that the seller makes it.
PROPERTY ENCUMBRANCE CERTIFICATE
Before buying any land
or house, it is important to confirm that the land does not have
any legal dues. It is available as a certificate called encumbrance
from the sub registrar office where the deed has been registered,
stating that the said land does not have any legal dues and complaints.
The encumbrance certificate for the past thirteen years should be
taken or for more clarification, you could demand 20 years encumbrance
certificate to be checked. If you still have anymore doubts, you
can take a Possession Certificate of the ownership of the particular
land, which is available from the village office.
Some people may have taken loan from the bank by pledging their
land. Ensure that the seller has paid back all the amounts due.
Don't get satisfied with the receipt of the payment made. A release
certificate from the bank is necessary to release all the debts
over the land legally. You could buy a land without the release
certificate. But if you want to take a loan in future, the release
certificate is a must.
MORE THAN ONE HOLDER
In some cases, the land will be owned by more than one people. So
before registering, check if there is more than one owner, and if
there is, get release certificate from the other people involved.
6) BUYING PROPERTY FROM NRI / FOREIGN
A person staying abroad can also sell his land in India by giving
a Power of Attorney to a third person authorizing him the right
to sell the land on his behalf. But in such cases, the power of
attorney should be witnessed and duly signed by an officer in the
Indian embassy in his province. There is no legal support for Power
of attorney signed by a notary public.
Once all the matters, financial/otherwise
are settled between the parties, it is better to give an advance
and write an agreement. This ensures that the owner does not change
his word regarding the cost as well as make a sale to someone else
who offers more money. The agreement should be written in Rs.50
Govt stamp paper. The agreement should state the actual cost, the
advance amount, and the time span within which the actual sale should
take place and how to proceed in case of any default from either
party, to cover the loss. The agreement can be prepared by a lawyer
and should be signed by both the parties and two witnesses. After
signing the agreement if one of the parties makes a default, the
other party can take legal action against him.
The land can be registered in a sub registrar office, after preparing
the title deed including all the relevant information. You could
get the title deed written by a government licensed Document writer.
Even lawyers can prepare the deed, but the document can only be
computer printed or typed, not handwritten. Only only those who
hold the scribe license can prepare handwritten documents.
draft should be prepared before actually writing the document in
stamp paper. Make sure all the details mentioned are accurate. If
there is incorrectness in the document after registering, a secondary
document with the correct details has to be registered and depending
on the incorrectness, the registration expenses will be repeated.
Make sure that the deed is registered
within the time limit mentioned in the agreement. Original title
deed, previous deeds, Property/House Tax receipts, Torence Plan
(optional) etc plus two witnesses are needed for registering the
property. Torence plan is a detailed plan of the property prepared
by a licensed Surveyor, which will have accurate details of the
measurements including width, length, borders etc. This plan is
needed only in some specific areas. For land costing more than five
lakhs, the seller should submit either his Pan card or Form Number
16 during registration.
expenses involved during registration include Stamp Duty, registration
fees, Document writers/ lawyers' fees etc. The stamp duty will depend
on the cost of the property and varies from Municipality to Corporation
to Panchayat. In Panchayat the stamp duty will be 4% of the cost
of the land whereas in Municipality it is 5% and in Corporation
6%. Two percentages will be charged as the registration fees. A
document writer’s fee also depends on the cost of the property and
varies with individuals. There is a percentage prescribed by the
government as Document writers fee and they cannot charge more than
the prescribed limit.
registration, the registered document will be received after 2-3
weeks, from the registrar office.
CHANGING THE TITLE IN VILLAGE OFFICE
The whole legal procedure of buying the property will be complete
only if the new owners name is added in the village office records.
An application can be made along with the copy of the registered
deed to the Village office to get this done.
MEASURING THE PROPERTY
It is advisable to measure the land
before registering the land in your name. Ensure that the measurements
of the plot and its borders are accurate. You can do this with the
help of a recognized surveyor. This will avoid lots of problems
in the future. You could also take the Survey Sketch of the land
from the Survey Department and compare for accuracy.