Laws for Land and Disputed Properties
The real estate market in India has matured of late, with a number of professionally managed established real estate developers working on large residential townships, condominiums, and commercial properties. However, the opportunity is also being used by fly-by-night operators to make a quick buck by some unscrupulous elements.
Home buyers and investors are wary of unprincipled and dishonest operators in the business, and NRIs even more so, who have been victims of fraud and deceit in property matters for obvious reasons.
Cases of deceit and trickery in getting sale deeds of the same piece of land registered twice and thrice abound, thanks to the nexus between revenue officials, the police, property dealers and their lawyers.
State Governments and state judiciaries have made efforts to take up cases of NRIs in the fast Track Courts, as in Punjab, where property cases filed by overseas Indians are among the highest in the country. Land grabbing by impersonation, fake deals, building scams is what an NRI investor needs to be aware of before he signs on the dotted line.
In case of delayed possession of property, an errant builder often gets away lightly in spite of persistent follow-up. He ends up paying only a 10 to 12% penalty on the amount he has received from the investor, which he makes up in any case, citing inflationary costs of construction as the main reason.
Property builders have tried to woo NRIs with false claims of projects, backed by fake videos and information. The National Real Estate Development Council (NAREDCO) has proposed legislation on Real Estate Management. This would bring about transparency and ethical practices in the Indian real estate sector
A few precautions any NRI investor or home buyer should exercise are suggested here:
The real estate developer's track record
Insist on Original Documents
If the land falls under a village survey, the important documents are: Forms 7/12, 2 and 6, which prove the possession and certify whether the land is agricultural or non- agricultural. Permission needs to be taken by the builder from the revenue authorities to convert the land for non-agricultural use and an NOC also needs to be obtained. NRIs are not permitted by law to acquire agricultural property, plantation property and farmhouses in the country, so do not allow any promoter to dupe you.
If the property falls under a city survey, a property card is available which authenticates ownership. The municipal tax assessment is also testimony to the ownership. Certification of these documents ensures a clear title of the seller.
Whether an investor goes in for finance or not, it is prudent to ask for examination of the loan papers. These papers would have complete details of ownership, plans, sale deeds, etc. The investor can go by the legitimacy of these documents because they would all have been scrutinized by a bank or a financial institution.
Some builders appoint a solicitor to determine the title deeds of the property. The solicitor goes through the property records of the last 30 years and issues a certificate of title to the builder. A genuine builder would offer the certificate free of cost to the buyer.
Some real estate developers promise not to construct on land
they have not acquired, or not received permission for. But most
often, they do not stop short of booking and collecting cash,
and closing shop soon after.
In case of a power of attorney, read clauses carefully to check if the attorney holder has the authority to sell it.In addition, doubt if considerations only involve cash documents, are on plain paper, any original documents are missing or documents are only notarized.
Check Approved Plan of Property to be Purchased
The purchaser should insist on an agreement for sale in under-construction schemes, and demand a sale deed on completion of the unit. The sale deed ensures final transfer of the property in the name of the buyer and his name appears in the public records.
Stamp Duty and Registration
In the case of cooperative societies which are promoted by builders, a share certificate is in order, along with an allotment letter. It is essential to check on the owner of the land once the building is completed.
Building Use Permission (BUP)
Confirm that your property/ apartment/office space conforms to all construction laws and bye-laws. Very often the builder gets the building use permission in spite of the construction having violated quality and space rules. The space meant for a parking lot could have been used for some other unauthorized purpose.
Delivery, Maintenance and Associated charges:
This certificate confirms the builder's adherence to the norms laid down by the civic authorities to the approved plan, and protects you from chances of litigation with the local authority. Inquire thoroughly if the property has been mortgaged or attached in any court case and, more importantly, check on encroachments on the property you are buying.