Information and Guidelines to Assist NRI Investment
Document Needed by NRI to buy the Property
One of the most important things for an NRI to do before buying any kind of property is running background checks and examining relevant documents. You must check the following documents thoroughly to get clarity on the title of the property.
The title deed is a legal document proving a person’s right to property. As a buyer, you need to check the title deed properly to ensure the authenticity of the transaction.
Things you need to check for:
· The seller should provide you with the original title deed for verification purpose and not a photocopy.
· The title deed needs to be in the name of the seller. You can ask for identification proof as well from the seller to ensure that he is the person who he claims to be.
· Check whether he is the sole owner of the property or not. In case of joint ownership, you will need proper legal approval of all the co-owners of the property.
It is advisable to get the current, as well as previous title deeds properly scrutinized by your lawyer to ensure that there are no loopholes.
The encumbrance certificate is important because it will prove whether the property you are interested in buying is under any kind of loan or mortgage or not. It is best to get the certificate properly scrutinized by your lawyer to ensure smooth functioning. It is available at the office of the sub-registrar where the land has been registered.
In some cases, the seller had previously pledged the land as a mortgage for taking a loan. You should ask the seller to get the ‘release certificate’ from the bank stating that there is no pending debt on the land. You should then get this certificate looked over by your lawyer to be sure that the land is indeed debt free.
Approved Plan of the Building
In case you are buying a flat, you should go over the approved building plan drawings. The Floor Space Index (FSI), which is the ratio of building area to land area, generally lies in the range of 1 to 2. You should also check whether the total number of apartments in the plan match with the number approved in the permit.
Local authorities issue a set of basic standards, called building bylaws that need to be followed in the building construction. For example, there are always setbacks (minimum distance between the building and the road) to be kept in mind. You should find out all such bylaws and make sure that the building sticks to them. This will avoid problems in the future with the local authorities.
NOC for Urban Land Ceiling and Regulation Act
The Urban Land Ceiling and Regulation Act (ULCRA) prevents excessive land hoarding in urban areas. In some states the seller will need to obtain a No Objection Certificate (NOC) before selling the property. You should ask for this NOC and verify it with your lawyer.
It is important to keep the zoning laws in mind. This means that you cannot buy land reserved for residential purpose and build a business on it. There are strict zoning laws according to the Master Plan of the city. A land zoned for a particular purpose cannot be used in any other way.
The Occupancy Certificate (OC) of a property is necessary if you intend to take a loan from the bank. It is the certificate that claims that the building is complete and ready- to-be- occupied. In case of a bank loan taken for buying an under-construction property, you must remember to get the OC after the building is completed; otherwise, you will face difficulties in selling it in the future.
The occupancy certificate will not be issued to you in case of illegal construction or violation of building, society and civic bylaws. Hence, it is also a proof that your property has followed all the necessary rules and regulations properly.
Receipt of Payment of Stamp Duty
You should have a proof that you have paid the stamp duty, either an online receipt or a stamp paper of the same value as the stamp duty amount.
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