How NRIs Can Save Themselves From Fraud While Buying Or Selling A Property In India
There is a rise in the occurrence of frauds while buying or selling of property. Incorrect information and lack of knowledge on procedures and documentation are the main causes of real estate fraud. The fraud can be avoided by taking precautionary steps while buying and selling property. These precautionary steps become more pertinent to Non-Resident Indians due to their physical absence during the procedure.
Types Of Fraud In Property Buying Or Selling
- Presenting fake documents by the real estate developer. Documents related to ownership or title are mostly misused.
- When there is no permission by appropriate authorities to either sell or buy that property. Or, there is no permission to do any construction on that site and some construction has been done.
- Having multiple mortgages to one property and its knowledge is concealed from NRI buyers.
- There have been many cases of delayed possession. Real estate developers conceal the real date of completion of the project and this creates trouble for owners in possession.
- Impersonating as an owner of the property or as someone authorized to deal with property is another way to fraud the NRIs.
- Misuse of Power of Attorney against the authorization is also considered as a fraud in the eyes of law.
Precautionary Steps For NRIs
- Research And Evaluate
Do extensive research regarding the types of property NRIs can buy or sell. There are some regulations as per the Foreign Exchange Management Act and RBI guidelines. Referring to them will help in legalities also.
- Verification Of Credentials
It is very important to verify the credentials of the person who is either buying or selling the property. Also, verifying if they have the authority to deal with the property and if they are legally eligible to do that.
- Registration With Authorities
NRIs must check if the property is registered with the concerned authority and letting authority know your future deal with that property is one way to safeguard your interest. For instance, if you wish to buy a flat in a society, then you must check if society is registered and if you are eligible to hold a flat in that society. It is important to check eligibility under REAL Estate Regulatory Authority (RERA) Act for the same.
- Records With Authorities
In India, due to multiple authorities, you can always check with various authorities for records, such as with the electricity department for bills and with the revenue department for tax receipts. These records help in identifying and establishing ownership. Keeping a proper record of these documents also helps in selling the property.
- Encumbrance Certificate
It is a very important document as it verifies the title of the property and the name of the previous owner, if any. This helps in maintaining the chronology of the document. This document is registered with the sub-registrar’s office.
The Indian government has simplified laws for buying and selling property for NRIs. Hence, while dealing with the property it makes sense to check for relevant provisions under the FEMA Act, RBI guidelines and RERA Act. Our property lawyers can help in navigating through legalities under various provisions to protect NRIs from various property frauds.
Our team of lawyers at Raj & Kanwar Legal Advisors assists NRIs in the various matters of property buying and selling such as:
- Identification of buyer/seller.
- Identification of a suitable property as per the requirements of the client.
- Establishing title to the property.
- Ensuring that all documents are properly executed and delivered.
- Preparing & evaluating all the documents necessary to complete a transaction efficiently & correctly.
Negotiating, drafting and reviewing sale and purchase agreements.
- A thorough physical inspection of the property in order to negotiate a better purchase price.
- Representation before various authorities such as Sub Divisional Magistrate, Registrar, Courts etc.
- Repatriation advice, tax advice, and any other compliance advice.