Ten years ago just like every aspiring Indian; Sumit too had dreams of owning a plush property in his hometown in India. As luck would have it, he was presented with an interesting opportunity and he headed overseas to live a luxurious and copious life. With a better financial situation, Sumit could not contain his excitement about investing in a property in India within just few years of his shifting abroad. Grabbing an opportunity to invest in a property in India, he assured himself to rely on few of the noted Indian property search portals. On finding an attractive project with great freebies by an upcoming developer, he almost finalized the deal. Since acquiring a property and visiting it in a few days was Sumit’s priority, he reserved some part of the property paperwork to be done later. But just before he could make the final payment, he was aghast to know that the apartment was already sold to another buyer and that it was illegally constructed. Just like Sumit, a large number of other NRIs are framed in such situations by some builders. One such popular incident is the real estate fraud that happened in Kerala in 2011. Off lately, a large number of gullible Indian expatriates have been falling prey to these builders by investing a large amount of money in non-existing projects.
How can a NRI make a safe and secure property investment in India?
Here are few do’s and don’ts :
1. Do a complete research about the realty market, developer and the project.
2. Be particular about the property location and ensure that the property offers multifarious facilities.
3. Hire a professional real estate agent with good track records and ask for samples of his past work.
4. Ensure to plan for a maximum rental yield before investing.
5. Ensure that you have all the required documents such as your visa, employment verification, passport and tax returns.
6. Check for any past litigation against the builder.
7. Check for an authentic ownership of the builder and his past records.
8. Consider the months of inventory before investing (time taken by the developer to sell all available units at prevailing rate).
9. Ensure to make all the property payments through NRE/NRO account.
10. Hire a property lawyer to understand the rules and tax implications.
11. Seek a registered valuer to ensure that the quoted price fuses with the correct market value.
12. Grant POA to a trustworthy person and get help with all the property legal work (in your absence).
13. Ask for all the original property documents and scrutinize them. Seek legal vetting from a lawyer for all the documents.
14. Ask the seller for a copy of permits and approvals from the civic authorities.
15. Ask for a bank release letter to ensure that the property is free from mortgage.
16. Ask for a no dues certificate to ensure that the property is free from utility bill payments.
17. Ask for a no-encumbrance certificate to know if the property is mortgaged.
18. Sale Deed and Agreement to Sell should be executed by the seller and the buyer with complete property details, property title, payment terms and past payments made.
19. Get the title of transfer executed and registered in your name from the local sub-registrar of properties.
20. Obtain a completion certificate from the seller and file it with the RBI within 90 days from property purchase.
21. Seek clearance under the Urban Land (Ceiling and Regulation Act).
22. Get an approved layout plan for a hassle-free sale of the property in future.
23. Get every agreement and minor acknowledgments in written form.
24. Ensure to remit the prevailing stamp duty levied on the land value.
25. Visit the property occasionally to check on encroachments/employ a caretaker.
26. Ensure to be present at the time of making the final payment.
1. Do not be blinded by glossy apartment brochures, unreal returns and attractive offers.
2. Do not invest if the builder is in a hurry to close the deal.
3. Never sign the property documents without reading them carefully.
4. Avoid a property investment based only on currency fluctuation.
5. Do not buy a property in a down payment plan even if there are attractive discounts, as most projects do not complete by the deadline.
6. Do not invest in the property without acquiring its original Mother Deed and Sale Deed.
7. Do not invest in a property before finalizing and strategizing the use of the property.
8. Do not make a property investment based on your emotional attachment.
9. Do not solely rely on the property information available online.
10. Do not solely rely on a realty agent; instead do your own research through your acquaintances.
11. Avoid paying property tax before seeking advice from a consultant.
12. Avoid investing a huge sum in a property; at the same time do not get a cheaper property. Keep a considerable amount as emergency fund.