Property law in India and its relevance for NRIs

Property law in India and its relevance for NRIs

Property law in India is a vast subject. It is a study under various statutes like The Transfer of Property Act, The Indian Contract Act, Registration Act, Indian Stamp Act, RERA, Land Acquisition laws, etc. Apart from these, for NRIs, special rules and regulations are provided under FEMA by RBI.

Property can be moveable, immovable, tangible or intangible.

There are various property-related activities like an investment in a property through sale and purchase, renting out a property, registration of property documents, updating revenue records and municipal records, exchange and transfer of ownership of property, etc.

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Many top lawyers, including property lawyers and property management companies, offer services to deal with such activities. There are property lawyers in India, assisting in property-related documentation and transactions and settling legal disputes if the need arises.

Property law in India covers a lot of areas. Some of the everyday activities relate to:

  • Under property law in India, real estate investment is a significant area. It has been an attractive option for NRIs and serves the dual purpose of maintaining a connection with roots and profit-making. NRIs are permitted to invest in residential and commercial properties just like any other resident Indian. But for agriculture and plantation, the requirements are different. For promoting the buying and selling of the real estate, the Government provides different loan options through banks and other financial institutions. NRIs have to be aware of the regulations made by RBI under FEMA for the sale and purchase of the real estate, payment as well as repatriation of sale proceeds.
  • For the purchase of property by NRI, money is remitted through proper banking channels. Funds maintained in NRE/NRO/FCNR accounts can also be used. A loan facility is available to buy a house and banks transfer the amount directly to the seller or developer’s account.
  • Intangible property like shares, bonds, and intellectual property rights like patents, copyrights, etc. are also a part of property law in India. NRIs can invest in Mutual funds, Government Securities, Bonds, Equity and Hybrid Funds, etc. Investment in Mutual Funds offers higher returns as compared to investment in Fixed Deposits but is subject to market risk. Mutual Funds Investment is regulated by SEBI (Securities Exchange Board of India).
  • Other property matters concerning NRIs like title search, especially in case of agricultural properties, transfer of ownership in case of inherited properties, settling the issues related to distribution or partition of joint properties or ancestral properties, etc., all come under the purview of property law in India. 
  • Most property-related transactions can be done by NRIs either by personally visiting India or through a power of attorney.

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We have top lawyers, property lawyers, and property management companies taking care of such investments/property matters for NRIs.

The relevance of property law in India for NRIs

The property market in India offers unlimited investment opportunities for NRIs. All investments made in India should abide by the respective laws. There is no doubt that property law in India is relevant for NRIs. Ignorance of the law is no excuse. It is vital to protect and safeguard the huge amount of investments which NRIs make. There has to be clarity of rights and government policies. NRIs need to remain updated on property law in India.

For any investment in property by NRIs, property laws, TDS rules, and tax implications go hand in hand. NRIs must be aware of the tax implications of all the property transactions they wish to undertake. Rules and regulations under FEMA have to be followed. It is imperative to comply with all the legal formalities to avoid any dispute later on.

Property Management Companies help NRIs to manage their property in India while staying in their native place.

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NRIs face many questions when it comes to property-related transactions in India. Some of the most common queries are:

Experts in the legal and financial field, including property lawyers, are available to assist NRIs in understanding the property law in India and helping them sail through the process.

Celebrating Women’s Day: Understanding Property Rights for Women

womens day

Women have been subject to bias in property matters. Woman’s day is an opportunity to ponder over such inequalities and initiate measures for empowering women about their property rights.

Today women are financially independent. Our legal system recognizes their rights in the property as independent owners. The Government has given many relaxations like lower stamp duty rates, to encourage women ownership.  

In India various factors govern the rights of a woman:

  • Marital status
  • Property is ancestral, inherited or self-acquired
  • Property is parental or belongs to her in-laws or husband
  • Personal laws applicable to a woman
  • Rights of woman as a daughter, wife or mother

Read More: Indian Women’s Right to Property

Property Rights of Women as daughter, mother, wife:

Hindu Law:

  • A daughter is a coparcener. She has equal rights in the ancestral property of her father, as her brother, even if she is married.
  • As a wife, a woman has equal right in the property of her husband as other legal heirs.
  • A daughter in law has no right in the property of her father in law till the time her husband is alive. After the husband’s death, she gets a right in the share which her husband is entitled to get.
  • A woman who gets the property by any mode: gift, Will or inheritance, she becomes the absolute owner and is free to deal with it.
  • In the case of intestate succession, a widow has equal right in the property of her husband as her children. A widowed mother also has an equal share in the property of her son as other legal heirs.
  • The wife from the second marriage has the same rights in the property of her husband as the first wife. The second marriage must be valid under the law. 
  • The children (daughter and son) of the second wife are treated at par with the children of the first wife to inherit from the self-acquired property of their father. They do not get right in the ancestral property. 
  • The right of women in agriculture land needs a separate mention. These rights depend upon customary practices and personal laws. After the amendment of 2005 in the Hindu Succession Act, women are at par with men in the inheritance of agriculture land. But some States do not follow the amendment, and the bias continues.

Read More: Property Rights of Women as per Hindu Law

Muslim Law:

Property rights under Muslim Law are based on personal laws and customs. If a Muslim woman inherits property, she becomes the absolute owner of her share. In inheritance, she gets half the share of what male heir gets. 

If a Muslim woman wants to make a Will of her property, she cannot give away more than one-third share of her property, and if her husband is the only heir, she can give two-third share by Will. 

Other faiths:

For faiths other than Muslims and Hindus, the property rights of woman are mostly fair in terms of gender divisions.

Read More: When can or can’t a daughter stake a claim in her fathers’ property

How to cancel Illegal Registration of ancestral property

How to cancel Illegal Registration of ancestral property

Registering a property means recording the ownership of the property and other transactions related to it in a public record.

Ancestral property is a one in which a person has a share which accrues to him by birth. If a person is entitled to get a share in the ancestral property, he cannot be excluded from it. A father cannot exclude his son from the ancestral property although he can gift his self acquired property to anyone. 

Ancestral property can not be divided or gifted or transferred, excluding the descendants/legal heirs having right to it.

For registering ancestral property, share and title of each family member must be clear.  The property is partitioned and transferred in the name of each descendant as per the share. The partition deed is registered, which confirms the ownership of the share.

Illegal registration can occur in numerous ways. Some of the most often used methods are:

  • Forgery – Signatures are forged, or fake documents are prepared
  • Impersonation- Someone else appears before the Registering Authorities as Owner
  • Misuse of POA – People give power of attorney to family members for effecting transactions on their behalf. POA can be misused. POA has to be very specific and clear.
  • Misrepresentation/Suppression of facts

NRIs are easy targets for illegal registration as:

  • They are not present in India physically for every transaction related to their property
  • Regular inspection of the property is not conducted.
  • Family members are generally given POA who misuse the same

Illegal Registration: The way out

The first step is the cancellation of illegal registration. It is advisable to get legal advice on the issue as cancellation requires careful analysis of the documents and filing an appropriate lawsuit in a civil court.

After cancellation, the next step is mutation.  It is essential to update the municipal records or land records so that the name of the owner is reflected correctly in public records.

Also Read: How to save title of your property from illegal occupants?

A police complaint can be filed for cheating and fraud.

A complaint also lies to the Revenue Authorities or concerned local bodies (Sub Registrar) bringing to their notice the illegal registration and requesting for cancellation of illegal registration.

Corruption in the office of registration is also a significant issue which leads to illegal registration of property. A criminal complaint can be filed with the police against the erring official.

How to cancel a registered document:

Once a document is registered, it is cancelled by filing a suit for cancellation in Civil Court.

The court satisfies itself regarding the illegality in the document.  Cancellation is not ordered at the whims and fancies of the party seeking it. The element of fraud, misrepresentation etc. which renders the document illegal must be present. There must be reasonable chances that if the document is not corrected, it will result in harm to the party.

The suit can be filed within three years from the date of knowledge of the fact of the document being illegal.

The court sends a copy of the decree passed in the lawsuit to the Registering Authorities which record the fact of cancellation of the registered documents in the record and correct the record.

Registering Authority is not empowered to cancel the registered document. The cancellation deed is also registered.

All partitions needn’t be sad stories – Partition of Property

partition-of-property

There are times that an NRI is the co-owner with somebody, in a property. By itself this might not be a problem; but sometimes, this leads to property disputes taking place. Usually the scenario would be that the other person would be seeking major control or manage or even try and sell the property as to create problems for the NRI. This clearly goes against the interest of the overseas citizen. It prevents him from taking any action related to his own property.

NRI Legal Services is a professional legal management company which offers advice on all matters related to property disputes. We advise all clients that in such circumstances, filing of a Suit after seeking appropriate advice is the best remedy available under law for an NRI. In all such cases, clarity on individual ownership of any land held jointly is a must. It aids in proper management and control of the NRI’s property.

  • Partition is a process whereby a property that is jointly owned by several persons gets divided into separate portions such that every person then gets a share as per his legal entitlement.
  • Once the division is done, every part would get a new title, and every ‘owner’ then would be giving up his stake in the other portions.
  • That means that there would be complete autonomy to operate in the partitioned holding. Meaning thereby that nobody else can interfere in the holding where you would have stake.
  • The property in question here could be the ancestral land, a house or a commercial establishment that has been inherited along with siblings or other co-owners.
  • Joint ownership does not mean that people lose out on their property because of any confusion and complication.
  • Do remember that a co owner’s stake would be both inheritable and transferable.
  • A prerequisite is that each holder’s investment, undivided share in the interest and title of the property needs to be defined clearly.
  • This would avoid problems in transfer, inheritance and taxation.
  • Partition is two kinds -contested or uncontested.
  1. In a contested scenario, when the involved parties do not agree, a legal suit has to be filed in the courts.
  2. In an uncontested situation, the co-owners mutually agree to the solution. The shares of the people involved would depend on the particular share for each one as mentioned in their purchase or inheritance document.

Sometimes, in the case of some urban commercial or residential properties where individual saleable units cannot be carved out or partitioned, the court orders a sale of the same. After the sale, the proceeds are divided according to the share of each person. Once that is done, each owner is free to take whatever decision he wants to about his individual holding. It is possible for NRIs to file and then be suitably represented in a suit with the help of our team of legal experts without even visiting India during the process. The company has an undeniable advantage of over seventeen years of experience and thousands of clients – it places us at an advantageous position in handling NRI property dispute cases.