INVESTING IN IMMOVABLE PROPERTY IN INDIA

Before you invest in immovable property in India, you must be aware about the checks and balances of this sector. For the Professionals who are engaged in Real Estate Sector, the sale and purchase of immovable property (hereinafter as “property”) is not much of a challenge as they are well acquainted with the transactions in this sector. The real challenge lies for the people who have no prior experience in dealing with immovable properties in their day today affair. Herein we will make an endeavor for such segment of people articulating the basic fundamentals which should be followed or borne in mind while dealing with immovable property.

Laws of Immovable Property in India

There are various laws which deals with immovable property such as the Transfer of Property Act, 1882; the Indian Easements Act, 1882; Registration Act, 1908; Indian Stamp Act, 1889; Specific Relief Act, 1963 and the Real Estate (Regulation and Development) Act, 2016 (RERA).

Checklist – Before you invest in Real Estate Sector

1. RERA registration: The first & foremost thing which one should do before making an investment in immovable property through a Real Estate Project is to check whether such Project is amenable to RERA or not. If the area of land proposed to be used in a Real Estate Project which is to be developed does not exceed 500 square meters or the number of apartments proposed to be developed does not exceed 8 inclusive of all phases then such Project are not required to be registered under RERA. If the said area exceeds 500 square meters or the number of said apartments exceeds 8 then such Project must be registered under RERA. You may demand RERA registration number and details from the Project Owner or Agent. Even Agents are now mandatorily required to be registered under RERA.
2. Check and confirm Title of the Property – Check and confirm the valid title of the property which means in who’s name the property is. One is said to have a clear Title over the Property when it is registered in his own name and it has no dispute over ownership of the property.
3. Type or Nature of the Property – Check the type or nature of the Property i.e. whether it is a free hold or agricultural or residential or commercial.
4. Law Compliant – Ensure that the target property is a law compliant property and not bought in violation of any law. For ex. payment of deficient stamp duty, etc. One can also seek such declaration from the Project Owner that all the relevant licenses have been acquired (Ex – Ground Water, Fire Dept, etc.) and compliances are duly met successfully.
5. No dues – Ensure that there are no dues pending upon the property before any relevant Govt. Department. For the same, the Seller must be asked to give a no dues certificate declaring no pending dues in writing.
6. No Litigation – Ensure that there is no litigation which is pending against the property whether it is out of inheritance or of similar nature. Otherwise even after purchase, the buyer may have to face the loss for purchasing an illegal property.
7. Registration and Stamp duty – Ensure that the property is registered under Registration Act before relevant Registry Office of concerning jurisdiction. The Parties must decide and pay the correct amount of stamp duty applicable upon such immovable property.
8. No encumbrances or charges – Ensure that the property is charge free and is not lying as a mortgage.

The aforesaid examinations can be made by a careful consideration of the Sale Deed, Conveyance Deed, Will(if any), jamabandi(land record), mutation order(order recording change), source of inheritance, property tax and statutory/municipal tax receipts. When the copy of a registered sale deed is submitted, the revenue records i.e. jamabandi are updated accordingly.

CONCLUSION

Growth of any sector broadly depends on its stability and reliability. Real Estate is a long-term investment sector which can be a home or source of income for someone in form of a shop. Acquiring this basic necessity requires a person to invest a significant portion of his savings. Therefore, it is imperative to exercise due care and caution while making an investment into residential or commercial Real Estate sector.

Draftbiz is engaged in providing the Legal Opinions and Due Diligence reports with respect the immovable properties. Our team’s insightful knowledge and dedicated research work is the key factor behind our Clients’ trust in us. You may contact us at draftbiz@outlook.com or reach us out through Call or WhatsApp at +91 – 9821979101 for any queries. We would be glad to help.